BILL NUMBER: SB 441 AMENDED
BILL TEXT
AMENDED IN SENATE MAY 3, 2005
AMENDED IN SENATE APRIL 4, 2005
INTRODUCED BY Senator Soto
FEBRUARY 17, 2005
An act to add Section 739.11 to the Public Utilities Code,
relating to electricity.
LEGISLATIVE COUNSEL'S DIGEST
SB 441, as amended, Soto. Electricity: rates : advanced
metering infrastructure .
Under existing law, the Public Utilities Commission has regulatory
authority over public utilities, including electrical corporations.
Existing law authorizes the commission to fix the rates and charges
for every public utility, and requires that those rates and charges
be just and reasonable. Existing law requires electrical corporations
furnishing electricity to an agricultural producer to prepare and
file tariffs providing for optional off-peak demand service,
including the availability of time-differentiating meters or other
measurement devices.
This bill would, with certain exceptions, prohibit the commission
from authorizing or requiring the installation of
advanced metering infrastructure , as defined, for
a residential or small commercial customer of an electrical
corporation any building constructed prior to January
1, 2006 and occupied by a customer with average annual
electricity usage of less than 1,000 kilowatthours per month
and occupying a building that was constructed prior to January 1,
2005 , unless certain findings are made by the commission
based upon evidence presented at a public hearing .
The bill would authorize an electrical corporation to
recover the expenses for advanced metering infrastructure for
residential and small commercial customers, only if, and to the
extent that, those expenses are offset by equal or greater cost
reductions that are passed through in rates to consumers as a result
of the use of advanced metering infrastructure. The bill
would, with certain exceptions, prohibit specified
residential or small commercial customers of an
electrical corporation with average monthly usage of less than 1,000
kilowatthours occupying a building constructed prior to January 1,
2006, from being placed on a default time-differentiated rate
schedule or other rate schedule using advanced metering
infrastructure, without the customer's affirmative written
consent.
Under existing law, a violation of the Public Utilities Act or an
order or direction of the commission is a crime.
Because the provisions of this bill would be a part of the act
and a violation of any of those provisions would be a crime
, the bill would impose a state-mandated local program by
creating a new crime.
The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that no reimbursement is required by this
act for a specified reason.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1.
The Legislature finds and declares all of the following:
(a) The Public Utilities Commission is currently considering
authorizing or requiring electrical corporations to install advanced
metering infrastructure (AMI) for their customers, including all
existing residential and small commercial customers, regardless of
their size or location. One electrical corporation has
requested authority to spend fifty million dollars ($50,000,000) in
2005 in order to prepare to start AMI meter installations in early
2006.
(b) AMI includes the installation of interval data recording
meters as well as two-way communications equipment. AMI technology
requires more advanced and costly equipment than the equipment
necessary to provide time of use billing, to conduct automated meter
reading, or to provide direct load control of customer equipment.
(c) The replacement or retrofit of millions of small customers'
meters statewide with AMI will cost billions of dollars, which
electrical corporations will seek to recover in rates. The investment
in communications equipment may become stranded if electrical
corporations decide to deploy broadband over power lines at a later
date.
(d) The commission has not conducted any evidentiary hearings to
determine whether universal deployment of AMI for small customers
will be cost effective for ratepayers. The claimed benefits of AMI
include operational benefits, including outage detection and reduced
meter reading costs, as well as reduced costs of generation due to
the shifting of peak load periods. The claimed operational benefits
alone have not been sufficient to justify the costs of AMI, and may
be achievable through cheaper technologies. Further, residential peak
load reductions may be achievable in a more cost-effective and
reliable manner through direct load control programs, appliance
efficiency standards, and conservation measures. The commission has
not examined these alternatives in an evidentiary hearing.
(e) The results of the statewide pricing pilot program in 2003 and
2004, show that California residential customers have the lowest
price responsiveness of any reported in the literature, and lower
than existed in California 25 years ago. This result is consistent
with the fact that California residential customers use only about 61
percent of the national average for residential electricity
consumption, and only residents in hot climate zones with significant
air conditioner use can shift substantial electricity usage in
response to higher prices during hot summer afternoon hours of peak
electricity usage.
(f) The commission should not authorize or require the
installation of AMI on existing buildings occupied by residential or
small commercial customers with an annual average usage of less than
1,000 kilowatthours per month unless it first finds, based on clear
and convincing evidence, that the installation of AMI will result in
average electricity or generation rates for the residential and small
commercial classes that are lower than they otherwise would have
been absent the installation of AMI.
(g) No small customer occupying a building that was constructed
prior to January 1, 2005, should be placed on a default
time-differentiated rate schedule without the customer's informed
written consent.
SEC. 2. Section 739.11 is added to the
Public Utilities Code , to
read:
739.11.
(a) Except as provided in Sections 393 and 353.3, the commission
shall not authorize or require the installation of advanced metering
infrastructure for buildings constructed prior to January 1, 2005,
and occupied by residential or small commercial customers with annual
average usage of less than 1,000 kilowatthours per month, unless it
first finds, based upon clear and convincing evidence, all of the
following:
(1) The installation of advanced metering infrastructure will,
over the following five-year periods, result in average electricity
or generation rates for residential and small commercial customer
classes that are lower than they would be without the installation of
advanced metering infrastructure.
(2) The deployment of advanced metering infrastructure will result
in more cost-effective peak load reduction than other alternatives,
including air conditioner cycling programs and appliance efficiency
standards.
(3) The communications technology proposed to be used in providing
advanced metering infrastructure is the most cost-effective
alternative in comparison with other technologies, including
broadband over power lines.
(4) A program of universal deployment of advanced metering
infrastructure throughout an entire service territory of an
electrical corporation is more cost effective than partial deployment
in selected climate zones.
(b) Expenses for owning, installing, or maintaining advanced
metering infrastructure for residential and small commercial
customers may only be included in the rates of an electrical
corporation if, and to the extent that, those expenses are offset by
equal or greater cost reductions that are passed through in rates to
consumers as a result of the use of advanced metering infrastructure.
(c) Except for customers participating in a pilot program
authorized by Section 393 and customers with distributed energy
resources that participate in a real-time metering and pricing
program pursuant to Section 353.3, no residential or small commercial
customer of an electrical corporation with an average annual usage
of less than 1,000 kilowatthours per month and occupying a building
that was constructed prior to January 1, 2005, shall be placed on a
default time-differentiated rate schedule without that customer's
affirmative written consent
(b) Electrical corporations have already requested over one
hundred and twenty million dollars ($120,000,000) to spend in 2005 in
order to prepare to install AMI in early 2006.
(c) The entire statewide cost of AMI installation is estimated at
several billion dollars.
(d) The commission has not conducted any evidentiary hearings to
determine whether universal installation of AMI for small customers
will be cost-effective for those customers.
SEC. 2. Section 739.11 is added to the
Public Utilities Code , to read:
739.11.
(a) For purposes of this section, "advanced metering
infrastructure" means interval data recording meters, along with
two-way communications and any other equipment necessary for the
installation and operation of the meters.
(b) Except as provided in Sections 353.3 and 393, the commission
shall not require the installation of advanced metering
infrastructure for any building constructed prior to January 1, 2006
and occupied by a customer with annual average usage of less than
1,000 kilowatthours per month, unless it first finds, after a public
hearing, based upon the evidence presented at the public hearing,
that the installation of advanced metering infrastructure will save
each customer class more than it will cost.
(c) Except as provided in Sections 353.3 and 393, no customer of
an electrical corporation with average annual usage of less than
1,000 kilowatthours per month and occupying a building constructed
prior to January 1, 2006, shall be placed on a default
time-differentiated rate schedule or other rate schedule using
advanced metering infrastructure, without the customer's affirmative
consent obtained in writing.
SEC. 3. No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.