BILL ANALYSIS
AB 2869
Page 1
Date of Hearing: May 3, 2004
ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
Sarah Reyes, Chair
AB 2869 (Levine) - As Amended: April 29, 2004
SUBJECT : Public utilities.
SUMMARY : Exempts customers of a utility from paying specified
charges established by either the board of the local publicly
owned electric utility or the California Public Utilities
Commission (CPUC) as provided in this bill. Specifically, this
bill :
1)Exempts customers affected by a utility completing a mutually
agreeable condemnation process of distribution facilities of
another utility if the following conditions are met:
a) The mutual agreeable condemnation process is related to
a city or county annexation or detachment, and
b) That the condemnation process was initiated prior to
February 1, 2000.
2)Specifies that the customer exemption applies to payment of
severance fees or charges established by either the board of
the local publicly owned electric utility or CPUC.
EXISTING LAW requires CPUC to develop a nonbypassable surcharge
for competition transition charges, historical procurement
charges, electrical corporation undercollections, and Department
of Water Resources (DWR) power procurement and bond charges.
FISCAL EFFECT : Unknown.
COMMENTS : The sponsors of this bill, Los Angeles Department of
Water and Power (LADWP), state that this bill is needed to
prevent customers who are scheduled to be annexed to their
territory from Edison's service territory from paying exit fees.
The reasons for the exemption is that LADWP has an arrangement
with Edison (SCE) that goes back to the 1930's to reciprocally
serve each other's customers in situations where the lack of
existing infrastructure and facilities make such arrangements
more economically feasible. The utilities in turn bill each
other for the combined total electricity consumption of each
AB 2869
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others "fringe" customers. The term "fringe" comes from the
fact that these customers are located along the fringes between
LADWP and SCE service territories.
LADWP is scheduled to annex parts of SCE service territory based
on a mutual condemnation agreement that will result in some
"fringe" customers moving from service with SCE to LADWP. Since
these customers were only serviced by SCE as a result of the
reciprocal agreement between the utilities they should be exempt
from paying any exit fees agreed to between both utilities.
Will this bill result in any other customers in Pacific Gas &
Electric or San Diego Gas & Electric service territory to be
exempt from exit fees? The intent of this bill is to only deal
with the exemption of exit fees for customers serviced by the
distribution system of SCE if the power was procured and paid
for by LADWP through a reciprocal agreement. Will the passage
of this bill result in providing exit fee exemptions to other
investor owned utility customers?
Technical amendment suggested by committee staff. This bill
should be amended to only apply to the provisions of subdivision
(b) of Section 9601, since the intent of this bill is to exempt
charges paid to the electrical corporation versus to charges
paid to a local publicly owned utility.
REGISTERED SUPPORT / OPPOSITION :
Support
Los Angeles Department of Water and Power (sponsor)
Opposition
None on file.
Analysis Prepared by : Daniel Kim / U. & C. / (916) 319-2083