BILL ANALYSIS
Appropriations Committee Fiscal Summary
1172 (Kuehl)
Hearing Date: 6/7/01 Amended: 5/24/01
Consultant: Lisa Matocq Policy Vote: E, U & C
5-1
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BILL SUMMARY: SB 1172 allows, until July 1, 2002, any
customer whose property is located within the service area
of Los Angeles Department of Water and Power (LADWP) and
another provider, for example Southern California Edison
(SCE), and who receives service from both providers, to
receive service on the entire property from only one
provider, subject to payment to the Department of Water
Resources (DWR) of its uncollected costs of providing
service to that customer, as specified.
Fiscal Impact (in thousands)
Major Provisions 2001-02 2002-03
2003-04 Fund
DWR Potential unknown costs, probably offset
Special* by fee revenues
PUC Unknown, probably not substantial, costs
Special**
*Electric Power Fund
**Public Utilities' Reimbursement Account
STAFF COMMENTS: Existing law prohibits a municipal
utility from providing service to customers of
investor-owned utilities unless the customer pays a
specified charge. Current law also prohibits a utility
from selling to the customers of another utility unless it
is a reciprocal arrangement. Prior to enactment of AB 1x
(Keeley, Ch. 4, St. of 2001) customers of investor-owned
utilities otherwise had the right to obtain power from
alternate providers. AB 1x provided that, after a period
of time to be determined by the Public Utilities Commission
(PUC), that right would be suspended until DWR no longer
supplied power, in order to ensure a sufficient revenue
stream to satisfy DWR's costs.
"Uncollected costs" is defined in this bill as the
difference between DWR's costs of providing power and the
rates collected. The bill also authorizes the PUC to
restrict a customer's ability to receive service from LADWP
in order to ensure satisfaction of any power purchase or
bond obligation incurred by DWR.
According to the Senate Energy, Utilities, and
Communications Committee's analysis, LADWP has become
popular in recent months because it has surplus power and
relatively low rates. To the extent that large numbers of
customers elect to obtain service from a non-DWR provider
in order to obtain electricity at a lower cost, it is
unknown what impact that would have on power costs for
remaining ratepayers (depends on a number of variables such
as usage, costs of power, date of election, etc.)
According to the author there are about 10-12 customers
that could be impacted by the provisions of this bill.
Presumably, DWR would establish the fee sufficient to cover
its costs and if unable to do so, would direct the PUC to
restrict the customer's ability to receive service from
LADWP.
STAFF RECOMMENDS that the bill be amended to clarify that
the customer who elects to receive service from only one
provider shall be responsible for any necessary costs
related to switching service e.g., wiring, transformers, or
building their own infrastructure to accommodate the
change.
SB 27xx (Bowen), pending on the Senate Floor, allows
customers of electrical corporations also being served by
DWR to use an alternate provider, subject to payment of
DWR's uncollected costs, as specified, and makes related
changes.
AB 11xx (Wright), pending in the Assembly, allows certain
governmental entities that are served by SCE within Los
Angeles County to receive service from LADWP, as specified.