BILL ANALYSIS 1
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SENATE ENERGY, UTILITIES AND COMMUNICATIONS COMMITTEE
DEBRA BOWEN, CHAIRWOMAN
SB 68XX - Battin Hearing Date:
May 24, 2001 S
As Proposed to be Amended FISCAL B
X
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6
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DESCRIPTION
Current law requires the California Public Utilities Commission
(CPUC) to establish priorities among the types of customers of
every electric and gas corporation, and among the uses of
electricity or gas by such customers. The CPUC must determine
which customers and uses provide the most important public
benefit and serve the greatest public need, and categorize those
customers and uses in descending priority.
Current law requires the CPUC, when establishing those
priorities, to include at a minimum a determination of:
q the customers and uses of electricity and gas which
provide the most important public benefits and serve the
greatest public need;
q the economic, social, and other effects of a temporary
discontinuance in electricity and gas service to those
customers and uses.
This bill, as proposed to be amended , requires the CPUC to
consider, when establishing the priorities in a rolling
blackout, the effect on the health and safety of customers who
live in areas of extreme temperatures. When looking at
additional outage exemptions the CPUC must:
q consult with medical experts;
q take into account the potential health, safety, and
reliability effects on other customers resulting from
potentially more frequent and longer blackouts;
q only provide additional outage exemptions to those
customers when the temperature is extreme; and,
q consider whether alternatives to a complete
exemption from rolling blackouts, such as a reduced
outage duration or an outage at a different time of day,
are appropriate.
BACKGROUND
California's electricity crisis manifests itself in at least two
ways: extraordinarily high prices and supply shortages. Supply
shortages may be due to withholding of supply by generators and
marketers, drought conditions in the Northwest which vastly
reduce available imports, and inadequate generation capacity.
The consequence of these shortages is blackouts. The ISO has
estimated there will be 55 hours of outages in California this
summer, but a report by the North American Electric Reliability
Council, a non-profit electric industry trade group, estimates
that number to be 260 hours.
As the committee heard at its May 10 hearing on blackout
protocols and procedures, the CPUC recently issued a decision
revising the list of essential customers who are exempt from
blackouts. That list is a long one, including essential public
services such as police, fire, prisons, and national defense
installations, hospitals, specified customers who agree to
reduce their usage during blackouts, and more. With the
exception of that last group, blackout exemptions are limited to
those circumstances where the public health and safety are at
risk - exemptions for economic hardship aren't permitted.
The electric distribution grid is comprised of circuits which
generally serve several thousand customers. When a planned
rolling blackout is instituted, power is cut to the entire
circuit, so exempting an "essential customer" from blackouts
also exempts every other customer on that circuit. For example,
Pacific Gas & Electric (PG&E) has about 1,700 essential
customers, but because the entire circuit serving the essential
customer is exempt from blackout, about 2 million customers are
exempted from blackouts. The result is that 43% of the load
served by PG&E is exempt from blackouts, meaning when a rolling
blackout is called, the remaining 57% of the load has to bear
the inconvenience. The numbers are somewhat inverted for
Southern California Edison (SCE) and San Diego Gas & Electric
(SDG&E), since statewide, about 50% of the load is exempt from
being blacked out.
Adding more people or businesses to the blackout exemption list
will concentrate the inconvenience on fewer customers for longer
periods of time. Historic and current utility practice is to
limit rotating blackouts to one to two hours. The utility shuts
down a particular circuit for a maximum of one hour, but at the
customer end, that shutdown means the power is actually out for
one to two hours.
The CPUC has asked the utilities for suggestions to reduce the
number of "free riders" (non-essential customers who are
exempted from blackouts solely because they happen to be located
on the same circuit as an essential customer) so blackouts can
be more equitably spread. Those reports are due on June 1. The
CPUC is also opening a proceeding to allow customers to ask to
be added to the essential customer list.
PG&E recently stated it may be able to do some amount of circuit
shifting (which doesn't require any capital outlay) that could
add up to 300 megawatts worth of load to the "eligible to be
blacked out" list by June 15. However, according to PG&E, any
reconstruction of circuits to completely eliminate "free riders"
could take six to eight months.
COMMENTS
1.Exposure To Extreme Heat Raises Health and Safety Concerns .
Overexposure to heat can cause illness and death. A 1996
report by the National Oceanic and Atmospheric Administration
noted that in a normal year, 175 Americans die from
overexposure.
A 1995 heat wave in Chicago killed 465 people and the year
before, a Coachella Valley resident died from heat exposure.
However, it must be noted that these deaths occurred from
prolonged exposure to heat. In the Coachella Valley case, the
women died because SCE disconnected her service, not because
she was forced to endure a planned rolling blackout. Since
then, SCE has revised its service disconnection procedures and
the Legislature has passed AB 3X (Wright), which is pending on
the Governor's desk, to make it more difficult for utilities
to disconnect electric customers.
As proposed to be amended, this bill will require the CPUC to
consider, when establishing the priorities in a rolling
blackout, the effect on the health and safety of customers who
live in areas of extreme temperatures. When looking at
additional outage exemptions the CPUC must:
q consult with medical experts;
q take into account the potential health, safety, and
reliability effects on other customers resulting from
potentially more frequent and longer blackouts;
q only provide additional outage exemptions to those
customers when the temperature is extreme; and,
q consider whether alternatives to a complete
exemption from rolling blackouts, such as a reduced
outage duration or an outage at a different time of day,
are appropriate.
1.CPUC Programs & Responsibilities . Ensuring the public's
health and safety has consistently been the driving force
behind the CPUC's outage exemption program.
The CPUC also requires each utility company to have 40% of
their load available for rotating outages. Right now, only
about 50% of the total statewide load is available for
rotating outages. Any increase in the number of people or
groups that are exempt from outages - and the free riders that
come with those exemptions - will drop the amount of load
available for rotating outages.
According to SCE, 51% of its load is already exempt from
blackouts, meaning when rolling blackouts are ordered, they're
rotated among the 49% of the load available to be interrupted.
Should the CPUC, pursuant to this bill, choose to exempt
customers who live in areas of extreme temperatures from
rolling blackouts, that will shrink the pool of load that must
endure the blackouts even further, subjecting them to longer
and/or more frequent outages.
At some point, decisions or mandates to exempt customers from
rolling blackouts will conflict with the CPUC regulation
requiring utilities to have 40% of their load available to
take part in rotating outages.
As proposed to be amended, this bill requires the CPUC to
consider the health, safety, and reliability effect of
granting additional blackout exemptions on remaining
customers.
2.Exemptions or Limitations? As noted in the "Background"
section, the historical and current practice of the utilities
is to limit blackouts from 1 to 2 hours. If the CPUC opts to
exempt people in areas over extreme temperature areas from
blackouts as a result of this bill, it means the utilities
have fewer customers to rotate blackouts among, so either the
duration or the number of blackouts has to increase. If it's
the duration, the question arises as to whether a person in,
for example, 98 degree weather suffering through a five-hour
blackout isn't significantly worse off that a person in 110
degree weather who is subject to a one-hour blackout (as,
absent the CPUC acting as a result of this bill, could occur).
As proposed to be amended, this bill requires the CPUC to
consult with medical experts and to consider whether
alternatives to a complete exemption from rolling blackouts,
such as a reduced outage duration or an outage at a different
time of day, are appropriate for these customers.
4.Another Benefit For Warm Weather Ratepayers . The existing
baseline program adjusts a customer's baseline allotment -
and, by extension, the amount of money a customer spends on
electricity - by climate zone. Those people in the warm areas
of the state have a higher baseline, meaning they have access
to more low-priced electricity than people and businesses in
temperate areas, and the people in the temperate areas are, to
a certain extent, subsidizing that benefit. This bill, by
encouraging the CPUC to exempt many of those same warm weather
customers from blackouts, creates an additional subsidy for
those areas.
5.Related Legislation . AB 30XX (Dutra), formerly AB 57X
(Durtra), proposes to put oil refineries and pipelines "last
in line" on the rotating blackout list.
POSITIONS
Sponsor:
Author
Support:
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|Ace Printing Company |Ageless Reflection, Inc. |
|------------------------------+------------------------------|
|American Leak Detection |Best, Best & Krieger LLP |
|------------------------------+------------------------------|
|Burtronics Business Systems |CB Richard Ellis |
|------------------------------+------------------------------|
|California State University |Castello Cities Internet |
| |Network, Inc. |
|------------------------------+------------------------------|
|City of Blythe |City of Palm Springs |
|------------------------------+------------------------------|
|City of Rancho Mirage |CLK, Inc./CLK New-Star |
|------------------------------+------------------------------|
|Coachella Valley Economic |Coachella Valley Water |
|Partnership |District |
|------------------------------+------------------------------|
|Coldwell Banker: Sandpiper |County of Riverside |
|Realty | |
|------------------------------+------------------------------|
|Del Webb's Sun City Palm |Desert Business Machines |
|Desert | |
|------------------------------+------------------------------|
|Desert Challenge |Desert Healthcare District |
|Merchandising Company | |
|------------------------------+------------------------------|
|Desert Springs Marriott |Digital Internet Services |
| |Corporation |
|------------------------------+------------------------------|
|Eisenhower Memorial Hospital |First Community Bank |
|------------------------------+------------------------------|
|Guy Evans, Inc. |Korek Land Company, Inc. |
|------------------------------+------------------------------|
|KMIR 6 |Lyle Commercial |
|------------------------------+------------------------------|
|Martin Communications |Mission Springs Water |
| |District |
|------------------------------+------------------------------|
|Mizell Senior Center |O'Connor Realty |
|------------------------------+------------------------------|
|Oliphant Enterprises, Inc. |Palm Springs View Estates |
|------------------------------+------------------------------|
|Prorealty & Investments |RBF Consulting |
|------------------------------+------------------------------|
|Rancho Las Palmas Marriott |Selzer, Ealy, Hemphill & |
| |Blasdel, LLP |
|------------------------------+------------------------------|
|Shelter from the Storm |Spherion |
|------------------------------+------------------------------|
|Tenet Health System |Time Warner Cable |
|------------------------------+------------------------------|
|Wilson Johnson Desert Empire |Waste Management |
|Specialists | |
|------------------------------+------------------------------|
|Over 300 Individuals | |
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Oppose:
Southern California Edison
Randy Chinn
SB 68XX Analysis
Hearing Date: May 24, 2001