BILL ANALYSIS SB 68 X2 Page 1 Date of Hearing: July 18, 2001 ASSEMBLY COMMITTEE ON APPROPRIATIONS Carole Migden, Chairwoman SB 68 X2 (Battin) - As Amended: June 7, 2001 Policy Committee: EnergyVote:16-0 Urgency: Yes State Mandated Local Program: No Reimbursable: SUMMARY This bill requires the Public Utilities Commission (PUC) 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 electricity customers. To accomplish this end, the PUC would be required to: 1)Take into account the potential health, safety, and reliability effects on other customers resulting from potentially more frequent and longer blackouts. 2)Provide additional outage exemptions only when the temperature is extreme. 3)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. 4)Consult with medical experts. FISCAL EFFECT According to the PUC, to make the determinations proposed by this measure would create a one-time cost of up to $500,000. This figure appears high. Two full-time positions and related expenses to conduct the research and make recommendations would cost no more than $250,000. COMMENTS SB 68 X2 Page 2 1)Rationale . The author contends that additional protection is warranted for individuals susceptible to heat-related infirmities. 2)Current law requires the PUC to establish priorities among customers of every electric and gas corporation, and to determine which customers and uses provide the most important public benefit and serve the greatest public need, categorizing those customers and uses in descending priority. 3)Background Regarding Blackout Exemptions . Last month, the PUC issued a decision revising the list of essential customers exempt from rotating outages. 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. The PUC also has a process that 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. There are about 1,700 essential customers in the PG&E service area, with an additional two million customers exempt from rotating outages because they are located in the same circuit as an essential customer. Southern California Edison 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. This bill requires the PUC to consider, when establishing priorities in a rotating blackout, the potential effect of extreme temperatures on the health and safety of residential customers. The PUC would not be required to exempt these customers, but simply to consider the effect on the health and safety of customers who live in extreme temperatures. 4)Opposition/Concerns . The PUC has a process for accommodating special needs, balancing these needs against overall grid reliability and equity among customers. This bill asks the Legislature to essentially override PUC policy and require the agency to review policies and exemptions or special accommodations, when it has already done so in light of system SB 68 X2 Page 3 constraints. Southern California Edison writes, "This legislation will leave fewer customers subject to outages and will therefore increase both the frequency and the duration of outages for customers that are not exempt. Further, we believe this legislation reduces system reliability and increases the likelihood of an electric distribution grid failure." Analysis Prepared by : Geoff Long / APPR. / (916)319-2081