BILL ANALYSIS
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|SENATE RULES COMMITTEE | SB 68XX|
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THIRD READING
Bill No: SB 68XX
Author: Battin (R)
Amended: 6/7/01
Vote: 27 - Urgency
SENATE ENERGY, U.&C. COMMITTEE : 8-0, 5/24/01
AYES: Bowen, Morrow, Alarcon, Battin, Dunn, Poochigian,
Speier, Vincent
SENATE APPROPRIATIONS COMMITTEE : 12-0, 6/7/01
AYES: Alpert, Battin, Burton, Escutia, Johannessen,
Johnson, Karnette, McPherson, Murray, Perata, Poochigian,
Speier
SUBJECT : Electricity: blackouts
SOURCE : Author
DIGEST : This bill requires the California Public
Utilities Commission to make a determination, as
specified, of the potential effect of extreme temperatures
on the health and safety of residential customers when
establishing priorities among the categories of customers
of electrical corporations, for example, which serve the
greatest public benefit.
ANALYSIS : Current law requires the California Public
Utilities Commission (PUC) 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 PUC must determine which customers and
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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 PUC, when establishing those
priorities, to include
at a minimum a determination of:
1.The customers and uses of electricity and gas which
provide the most important public benefits and serve the
greatest public need.
2.The economic, social, and other effects of a temporary
discontinuance in electricity and gas service to those
customers and uses.
This bill requires the PUC 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 PUC must:
1.Consult with medical experts.
2.Take into account the potential health, safety, and
reliability effects on other customers resulting from
potentially more frequent and longer blackouts.
3.Only provide additional outage exemptions to those
customers when the temperature is extreme.
4.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 independent systems operator
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(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 Senate Energy, Utilities and Communications
Committee heard at its May 10, 2001 hearing on blackout
protocols and procedures, the PUC 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 percent of the load
served by PG&E is exempt from blackouts, meaning when a
rolling blackout is called, the remaining 57 percent 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
percent 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.
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The PUC 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 PUC 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.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
The PUC is in the process of examining baseline quantities,
including those of customers living in regions with extreme
temperatures, and recently reviewed residential blackout
protocols. Increased costs are unknown, but potentially
$500,000 to contract out for the medical provisions and for
staff to comply with the other provisions of the bill.
SUPPORT : (Verified 5/24/01)
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 Partnership
Coachella Valley Water District
Coldwell Banker: Sandpiper Realty
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County of Riverside
Del Webb's Sun City Palm Desert
Desert Business Machines
Desert Challenge Merchandising Company
Desert Healthcare District
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 and 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 Specialists
Waste Management
Over 300 Individuals
OPPOSITION : (Verified 5/24/01)
Southern California Edison
NC:cm 6/13/01 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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