BILL ANALYSIS
AB 1889
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Date of Hearing: April 12, 2004
ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
Sarah Reyes, Chair
AB 1889 (Chu) - As Introduced: February 5, 2004
SUBJECT : Electrical restructuring: Power Exchange.
SUMMARY : Deletes the requirement that the California Public
Utilities Commission (CPUC) establish a Power Exchange energy
credit (PX credit) based on time-of-use meters, including
customer options on how to calculate their PX credit.
Specifically, this bill deletes the requirement that PUC
establish a PE credit that is calculated according to actual
hourly data for customers with time-of-use (TOU) meters and
provisions for customers to make a one time choice to have their
PX credit calculated according to hourly data or the average
load profile for their customer class.
EXISTING LAW:
1)Requires CPUC to establish a PX credit that is calculated
according to actual hourly data for customers with TOU meters
installed on or after January 1, 2000.
2)Allows customers with TOU meters installed before January 1,
2000 to make a one-time choice, before January 30, 2000, to
have their PX credit calculated according to actual hourly
data or the average load profile for their customer class.
3)Requires additional billing costs resulting from the hourly
calculation methodology to be recoverable from that customer
class and prohibits shifting any costs between customer
classes.
FISCAL EFFECT : Unknown.
COMMENTS :
According to the author since the power exchange is no longer
administering energy credits for direct access customers the
statute is no longer needed. The author states that this bill
if enacted would become effective on January 1, 2005 and would
be prospective in its application. Furthermore, the author
believes this bill would have no impact on the power exchange
AB 1889
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bankruptcy proceedings and would have no bearing on direct
access customers seeking energy credit payments owed to them
during the operation of the power exchange.
PX Credits: At the time the PX was operating, the utilities
were required to generate a bill for transmission and
distribution services and for the competition transition charge
(CTC). AB 1890 (Chapter 854, Statutes of 1996) required that
these charges be determined residually by subtracting a credit,
or otherwise known as the PX credit, for the commodity portion
of the bill before the energy service provider could bill the
customer. The PX credit was calculated based on the average
load profiles of all consumers within a given customer class.
At the time consumers with below average load profiles got a
higher PX credit than consumers with above average load profiles
which affected how much consumers they paid toward CTC. This
process rewarded consumers who could better the load profiles
within their customer class thereby promoting efficient usage
patterns.
Bankruptcy of the Power Exchange: The Power Exchange was
established as a result the passage of AB 1890 and charged with
organizing a set of competitive auctions, open on a
nondiscriminatory basis to all suppliers. As a result of the
energy crises in California the Power Exchange in January 2001
filed a bankruptcy petition which became formal on March 2001.
The bankruptcy of the Power Exchange left more than $2 billion
worth of claims and $1 billion in collateral that was held by
the Power Exchange from former participants. In addition, the
Power Exchange holds some $1.2 billion in settlement clearing
funds that have yet to be disbursed.
REGISTERED SUPPORT / OPPOSITION :
Support
Southern California Edison
Opposition
None on file
Analysis Prepared by : Daniel Kim / U. & C. / (916) 319-2083