BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 2869
                                                                  Page  1

          ASSEMBLY THIRD READING
          AB 2869 (Levine) 
          As Amended May 25, 2004
          Majority vote 

           UTILITIES AND COMMERCE     11-0                                 
           
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          |Ayes:|Reyes, Campbell, Bogh,    |     |                          |
          |     |Calderon, Canciamilla,    |     |                          |
          |     |Diaz, La Malfa, Levine,   |     |                          |
          |     |Maddox, Ridley-Thomas,    |     |                          |
          |     |Correa                    |     |                          |
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           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 to resolve a fringe area  
            agreement in which there exist a balance of benefit between  
            the customers of the local publicly owned electric utility and  
            electrical corporation.

          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.

           FISCAL EFFECT  :  Unknown

           COMMENTS  :  The sponsor 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  
          others "fringe" customers.  The term "fringe" comes from the  
          fact that these customers are located along the fringes between  








                                                                  AB 2869
                                                                  Page  2

          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.
           

          Analysis Prepared by  :    Daniel Kim / U. & C. / (916) 319-2083 


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