BILL ANALYSIS 1
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SENATE ENERGY, UTILITIES AND COMMUNICATIONS COMMITTEE
MARTHA M. ESCUTIA, CHAIRWOMAN
SB 580 - Escutia Hearing Date:
April 5, 2005 S
As Amended: March 31, 2005 FISCAL B
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8
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DESCRIPTION
Existing law:
1. Establishes the Low-Income Oversight Board (LIOB) for the
purpose of advising the California Public Utilities Commission
(CPUC) on low-income electric and gas customer issues and
serving as a liaison for the CPUC to low-income ratepayers and
representatives.
(SB 2XX (Alarcon), Chapter 11, Statutes of 2001-02 Second
Extraordinary Session)
2. Requires the CPUC to consider and authorizes the CPUC to
implement programs for low-income water ratepayers to provide
rate relief and provide appropriate incentives and
capabilities to achieve water conservation goals.
(AB 2815, Chapter 549, Statutes of 1992)
This bill expands the purview and membership of the LIOB as
follows:
1. The LIOB's purview, which is currently limited to advising
the CPUC regarding low-income electric and gas utility
customer issues, is expanded to include water utility customer
issues.
2. The LIOB's membership is expanded from nine to 11 by the
addition of two members selected by the CPUC - one additional
member with expertise in the low-income community and one
member representing a water utility.
BACKGROUND
When established in 2001, the LIOB was intended to provide input
from the low-income community to the CPUC about the policies and
programs for low-income energy consumers, particularly programs
that support utility bill payments, such as the California
Alternative Rates for Energy (CARE) program that provides rate
discounts for eligible low-income customers, and programs that
reduce bills by reducing energy demand, such as the low-income
energy efficiency (LIEE) programs.
At the time of SB 2XX's enactment, there was a perception that
significant improvement in low-income public purpose programs was
needed to lessen the hardship that high energy bills placed on
low-income consumers. The issue with respect to CARE was the
relatively low rates of enrollment of eligible customers, as
compared with the rates of enrollment for Universal Lifeline
Telephone Service (ULTS), the comparable program for low-income
telephone subscribers. SB2XX directed the LIOB and the CPUC to
work with the ULTS programs to improve CARE enrollment, with the
eventual goal of establishing universal enrollment of eligible
customers for all utility programs.
With respect to LIEE programs, the LIOB was directed to provide
policy and other input to the CPUC from the perspective of the
low-income community, including formal studies, and to provide a
channel of communication for community-based organizations. In
turn, the CPUC was directed to provide staffing, technical
assistance and other forms of support to further the LIOB's
purpose.
The LIOB has functioned relatively effectively for several years.
However, it has not had an in-person meeting for over a year.
Several of its initiatives, notably an attempt to provide for
automatic enrollment in CARE for recipients of other forms of state
economic assistance, have stalled at the CPUC. The LIOB has not
provided the regular and continuous policy input envisioned by
SB2XX.
The LIOB has discussed the importance of water service for
low-income Californians. The Public Utilities Code directs the
CPUC to consider and adopt programs to assure healthful water
service for low income customers (Section 739.8). This bill adds
to the mission of the LIOB consideration of water issues for
low-income customers and adds a representative of the water
industry to the LIOB.
COMMENTS
Can relatively small private water utilities support rate discounts
and other programs for low-income customers? Currently,
CPUC-regulated water utilities don't have low-income rates.
Notwithstanding the policies and requirements in existing law
regarding affordable water for low-income customers, the CPUC has
been unable to develop a low-income water rate design modeled on
CARE (i.e., funded by a surcharge on other customers' bills). The
difficulty is due in large part to the structure of the regulated
water industry. (Relatively small scale entities, with federated
structures based on districts or communities that have historically
not had uniform rates, which makes subsidy issues even more
difficult.) As water quality requirements increasingly impact
costs and rates for small water utilities, the importance of
addressing affordability issues for low-income customers will be
increasingly important. The fundamental impediments to subsidizing
basic water needs will remain, but the LIOB may be able to provide
useful advice to the CPUC on the subject.
POSITIONS
Sponsor:
Author
Support:
Association of California Community and Energy Services
Maravilla Foundation
Southern California Forum
Southland Energy Systems
Oppose:
None on file
Lawrence Lingbloom
SB 580 Analysis
Hearing Date: April 5, 2005