BILL ANALYSIS
SB 580
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Date of Hearing: September 7, 2005
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Judy Chu, Chair
SB 580 (Escutia) - As Amended: September 1, 2005
Policy Committee: UtilitiesVote:7-3
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill, as proposed to be amended :
1)Requires the Secretary of the Health and Human Services (HHS)
Agency, by April 1, 2006, to evaluate how best to use state
and federal benefit programs and databases to facilitate
automatic enrollment of eligible investor-owned utility (IOU)
customers in the California Alternative Rates for Energy
(CARE) program, while complying with state and federal privacy
laws.
2)Requires the Public Utilities Commission (PUC) to cooperate
with other state entities, including the HHS Agency, to ensure
that all gas and electric customers eligible for public
assistance programs and residing within the IOU territories
are enrolled in the CARE program.
3)Expands the PUC's Low-Income Oversight Board (LIOB) purview to
include water utility customer issues in addition to the
existing electric and gas customer issues, and increases the
number of LIOB board members from 9 to 11.
FISCAL EFFECT
1)Minor absorbable costs for the HHS Agency to perform the
required evaluation.
2)Minor absorbable costs to the PUC to work with other state
entities to increase CARE participation and for additional
staff support associated with the board's expanded purview.
3)To the extent that automatic enrollment of public benefit
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program enrollees to the CARE program is effectuated by this
bill, the increased CARE enrollment will increase the total
ratepayer subsidy for the CARE program. According to the
author's office, current CARE enrollment is in the range of 3
million customers and an estimated 800,000 CARE-eligible
customers remain un-enrolled. The author's office estimates
that, if all of these eligible customers were enrolled, the
additional ratepayer subsidy would total about $160 million
per year. This translates into a minute cost to each
ratepayer.
COMMENTS
1)CARE Provisions . The CARE program provides utility rate
reductions for those who earn up to 175% of the federal
poverty guidelines, or up to $34,000 per year for a family of
four. According to the PUC, the penetration rate for the
Southern California Edison territory was 91% in 2002. PUC
benchmarks for some of the other IOUs include 63% for PG&E and
75% for San Diego Gas and Electric. This bill is intended to
help provide the rate relief for ratepayers who qualify for
CARE but are not enrolled in the program by attempting to use
enrollment in other public benefit programs to identify these
CARE-eligible households.
2)LIOB Provisions . Established in 2001, the LIOB advises the PUC
about the California Alternative Rates for Energy (CARE)
program, which provides rate discounts for eligible low-income
customers, and the low-income energy efficiency (LIEE)
programs that seek to reduce customers' energy bills by
reducing demand. Current law also requires the PUC to consider
programs to assist low-income water ratepayers. This bill adds
water issues to the LIOB's advisory role. According to the
author, the PUC has unsuccessfully attempted to address water
rate issues for low-income customers in a number of rate
cases.
3)Bill History . The previous version of this bill added water
utilities to the purview of the LIOB and passed this committee
13-5 in July. The bill was recently amended on the Assembly
floor to add the CARE program provisions.
4)Amendments , which were agreed to by the author and the
Assembly Utilities and Commerce Committee, are reflected in
this analysis. The amendments (a) replace Section 2 of the
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bill with the provision described in #1 of the above Summary,
and (b) delete provisions specifying actions that the PUC and
other state entities were to undertake to increase CARE
enrollment.
Analysis Prepared by : Chuck Nicol / APPR. / (916) 319-2081