BILL ANALYSIS
SB 68 X2
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Date of Hearing: July 2, 2001
ASSEMBLY COMMITTEE ON ENERGY COSTS AND AVAILABILITY
Roderick D. Wright, Chair
SB 68 X2 (Battin) - As Amended: June 7, 2001
SENATE VOTE : 39-0
SUBJECT : Electricity: blackouts.
SUMMARY : Requires the California Public Utilities Commission
(CPUC) to consider, when establishing priorities in a rotating
blackout, the potential effect of extreme temperatures on the
health and safety of residential customers. Specifically, this
bill :
1)Requires CPUC to make a determination 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 corporation, and to do
all of the following:
a) Consult with medical experts;
b) Take into account the potential health, safety, and
reliability effects on other customers resulting from
potentially more frequent and longer blackouts;
c) Only provide additional outage exemptions to those
customers when the temperature is extreme;
d) 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.
EXISTING LAW :
1)Requires 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.
1)Requires CPUC to 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. When establishing those priorities, CPUC
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must include a determination of:
a) The customers and uses of electricity and gas, which
provide the most important public benefits and serve the
greatest public need.
b) The economic, social, and other effects of a temporary
discontinuance in electricity and gas service to those
customers and uses.
FISCAL EFFECT : Unknown.
COMMENTS :
Blackout Exemptions
Last month, CPUC issued a decision revising the list of
"essential customers" who are exempt from rotating outages (D.)
The list includes essential public services such as police,
fire, hospitals, government agencies essential to the national
defense, and specified customers who agree to reduce their usage
during rotating outages. CPUC has also opened a proceeding
which enables customers to request to be added to the list of
essential customers.
The electric grid is divided into distribution circuits. When
an "essential customer" is exempted from a rotating blackout,
every other customer on that circuit is exempted as well. In
the Pacific Gas and Electric service territory, there are
approximately 1,700 essential customers but an additional two
million customers who are exempt from rotating outages simply
because they are located in the same circuit as an essential
customer. Southern California Edison (SCE) and San Diego Gas
and Electric also have a large number of "free riders" within
their respective service territories. Statewide, approximately
50 percent of the load is exempt from rolling blackouts.
Additional Exemptions Would Increase Burden on Non-Exempt
Customers, and Threaten Reliability
This bill requires CPUC to consider, when establishing
priorities in a rotating blackout, the potential effect of
extreme temperatures on the health and safety of residential
customers. CPUC would not be required to exempt these
customers, but simply to consider the effect on the health and
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safety of customers who live in extreme temperatures.
Adding customers to the list of essential customers would
decrease the amount of load available for rotating outages.
This would increase both the frequency and duration of outages
for non-exempt customers. (Currently, rolling blackouts
typically last between one and two hours for most customers.)
Additionally, any of these customers may already have petitioned
CPUC for exemption based on health and safety issues. There has
been a process in place at CPUC to accommodate special needs and
balance these against overall grid reliability and equity among
customers. This bill asks the legislature to effectively
override the policy decision already made at CPUC in this regard
and to require the agency to review policies and exemptions or
special accommodations, when it has already done so in light of
system constraints.
Increasing the number of exempt customers could threaten the
reliability of the grid. The CPUC currently requires utilities
to have 40 percent of their load available to participate in
rolling blackouts. (As noted above, approximately 50 percent of
circuits are presently available for this purpose.) If CPUC,
pursuant to this bill, elected to exempt customers living in
areas of extreme temperatures from rotating outages, the number
of exempt customers could potentially rise above the utilities'
current 40 percent of load requirement. PG&E estimates that
this measure could potentially result in approximately 67
percent of load being exempted from rotating outages within its
service territory, leaving only 33% of its customers available
for rotating outages. While these estimates are of limited
value (insofar as they are based on certain assumptions relating
to extreme temperatures, which in fairness to the author is not
defined in the bill) they nevertheless underscore the potential
adverse impact of exempting customers based on extreme
temperatures.
Most Rolling Blackouts Are One- to Two-Hours Long, Which Limits
Exposure to Extreme Heat
Overexposure to heat can prove deadly, especially for the
elderly. In 1995, Chicago experienced a heat wave which
resulted in 465 deaths. These deaths occurred as a result of
prolonged exposure to heat. Rolling blackouts, on the other
hand, typically last between one- and two-hours. The limited
duration of rotating outages limits a customer's exposure to
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extreme heat.
Disconnection of electric service, on the other hand, poses a
more significant threat to the health of customers in areas of
extreme heat. Legislation enacted in the First Extraordinary
Session (ABX 3, Wright, Chapter --) prohibits utilities from
disconnecting customers that are in compliance with payment
arrangements offered by a gas or electric utility.
Additional Subsidy for Warm-Weather Ratepayers
The CPUC's existing baseline program adjusts a customer's
baseline allotment based on climate. Customers living in warmer
regions have a higher baseline, and therefore have access to
lower-priced electricity as compared with customers in more
temperate climates. Customers in more temperate regions to a
certain extent subsidize the higher baseline areas. This
measure seeks to provide customers living in areas of extreme
temperatures with an additional benefit, and one that would more
or less be subsidized or offset by customers living in more
temperate climates, insofar as this bill could potentially
increase both the frequency and duration of rotating outages for
non-exempt customers.
Staff recommends
The author may wish to explore other options to provide
additional comfort to residents in extreme weather zones that
will not jeopardize the reliability of the existing system of
rotating outages.
REGISTERED SUPPORT / OPPOSITION :
Support
None on file.
Opposition
None on file.
Analysis Prepared by : Joseph Lyons / E. C. & A. / (916)
319-2083
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