Senate BillNo. 743


Introduced by Senators Steinberg and Padilla

February 22, 2013


An act to amend Section 739.1 of the Public Utilities Code, relating to electricity.

LEGISLATIVE COUNSEL’S DIGEST

SB 743, as introduced, Steinberg. Electricity: rates.

Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including electrical corporations, as defined. 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 the commission to designate a baseline quantity of electricity and gas necessary to supply a significant portion of the reasonable energy needs of the average residential customer and requires that electrical and gas corporations file rates and charges, to be approved by the commission, providing baseline rates. Existing law requires the commission to establish a program of assistance to specified low-income electric and gas customers, referred to as the California Alternate Rates for Energy (CARE) program.

Existing law revises certain prohibitions upon raising residential electrical rates adopted during the energy crisis of 2000-01, to authorize the commission to increase the rates in effect for CARE program participants for electricity usage up to 130% of baseline quantities by the annual percentage increase in benefits under the CalWORKs program, as defined, not to exceed 3%, and subject to the limitation that the CARE rates not exceed 80% of the corresponding rates charged to residential customers not participating in the CARE program.

This bill would replace the existing authorization to increase CARE rates based upon the annual percentage increase in benefits under the CalWORKs program and instead authorize the commission to increase the rates in effect for CARE program participants for electricity usage up to 130% of baseline quantities by the annual percentage increase of the Consumer Price Index from the prior year but not to exceed 4% per year, and subject to the limitation that the CARE rates not exceed 80% of the corresponding rates charged to residential customers not participating in the CARE program.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

P2    1

SECTION 1.  

Section 739.1 of the Public Utilities Code is
2amended to read:

3

739.1.  

(a) As used in this section, the following terms have
4the following meanings:

5(1) “Baseline quantity” has the same meaning as defined in
6Section 739.

7(2) “California Solar Initiative” means the program providing
8ratepayer funded incentives for eligible solar energy systems
9adopted by the commission in Decision 05-12-044 and Decision
1006-01-024, as modified by Article 1 (commencing with Section
112851) of Chapter 9 of Part 2 and Chapter 8.8 (commencing with
12Section 25780) of Division 15 of the Public Resources Code.

begin delete

13(3) “CalWORKs program” means the program established
14pursuant to the California Work Opportunity and Responsibility
15to Kids Act (Chapter 2 (commencing with Section 11200) of Part
163 of Division 9 of the Welfare and Institutions Code).

17(4)

end delete

18begin insert(3)end insert “Public goods charge” means the nonbypassable separate
19rate component imposed pursuant to Article 7 (commencing with
20Section 381) of Chapter 2.3 and the nonbypassable system benefits
21charge imposed pursuant to the Reliable Electric Service
22Investments Act (Article 15 (commencing with Section 399) of
23Chapter 2.3).

24(b) (1) The commission shall establish a program of assistance
25to low-income electric and gas customers with annual household
26incomes that are no greater than 200 percent of the federal poverty
P3    1guideline levels, the cost of which shall not be borne solely by any
2single class of customer. The program shall be referred to as the
3California Alternate Rates for Energy or CARE program. The
4commission shall ensure that the level of discount for low-income
5electric and gas customers correctly reflects the level of need.

6(2) The commission may, subject to the limitation in paragraph
7(4), increase the rates in effect for CARE program participants for
8electricity usage up to 130 percent of baseline quantities by the
9annual percentage increase inbegin delete benefits under the CalWORKs
10program as authorized by the Legislature for the fiscal year in
11which the rate increase would take effect,end delete
begin insert the Consumer Price
12Index from the prior yearend insert
but not to exceedbegin delete 3end deletebegin insert 4end insert percent per year.
13begin insert For purposes of this subdivision, the annual percentage change
14in the Consumer Price Index shall be calculated using the same
15formula that was used to determine the annual Social Security
16Cost of Living Adjustment on January 1, 2008.end insert

17(3) Beginning January 1, 2019, the commission may, subject
18to the limitation in paragraph (4), establish rates for CARE program
19participants pursuant to this section and Sections 739 and 739.9,
20subject to both of the following:

21(A) The requirements of subdivision (b) of Section 382 that the
22commission ensure that low-income ratepayers are not jeopardized
23or overburdened by monthly energy expenditures.

24(B) The requirement that the level of the discount for
25low-income electricity and gas ratepayers correctly reflects the
26level of need as determined by the needs assessment conducted
27pursuant to subdivision (d) of Section 382.

28(4) Tier 1, tier 2, and tier 3 CARE rates shall not exceed 80
29percent of the corresponding tier 1, tier 2, and tier 3 rates charged
30to residential customers not participating in the CARE program,
31excluding any Department of Water Resources bond charge
32imposed pursuant to Division 27 (commencing with Section 80000)
33of the Water Code, the CARE surcharge portion of the public
34goods charge, any charge imposed pursuant to the California Solar
35Initiative, and any charge imposed to fund any other program that
36exempts CARE participants from paying the charge.

37(5) Rates charged to CARE program participants shall not have
38more than three tiers. An electrical corporation that does not have
39 a tier 3 CARE rate may introduce a tier 3 CARE rate that, in order
40to moderate the impact on program participants whose usage
P4    1exceeds 130 percent of baseline quantities, shall be phased in to
280 percent of the corresponding rates charged to residential
3customers not participating in the CARE program, excluding any
4Department of Water Resources bond charge imposed pursuant to
5Division 27 (commencing with Section 80000) of the Water Code,
6the CARE surcharge portion of the public goods charge, any charge
7imposed pursuant to the California Solar Initiative, and any other
8charge imposed to fund a program that exempts CARE participants
9from paying the charge. For an electrical corporation that does not
10have a tier 3 CARE rate that introduces a tier 3 CARE rate, the
11initial rate shall be no more than 150 percent of the CARE baseline
12rate. Any additional revenues collected by an electrical corporation
13resulting from the adoption of a tier 3 CARE rate shall, until the
14utility’s next periodic general rate case review of cost allocation
15and rate design, be credited to reduce rates of residential ratepayers
16not participating in the CARE program with usage above 130
17percent of baseline quantities.

18(c) The commission shall work with electrical and gas
19corporations to establish penetration goals. The commission shall
20authorize recovery of all administrative costs associated with the
21implementation of the CARE program that the commission
22determines to be reasonable, through a balancing account
23mechanism. Administrative costs shall include, but are not limited
24to, outreach, marketing, regulatory compliance, certification and
25verification, billing, measurement and evaluation, and capital
26improvements and upgrades to communications and processing
27equipment.

28(d) The commission shall examine methods to improve CARE
29enrollment and participation. This examination shall include, but
30need not be limited to, comparing information from CARE and
31the Universal Lifeline Telephone Service (ULTS) to determine
32the most effective means of utilizing that information to increase
33CARE enrollment, automatic enrollment of ULTS customers who
34are eligible for the CARE program, customer privacy issues, and
35alternative mechanisms for outreach to potential enrollees. The
36commission shall ensure that a customer consents prior to
37enrollment. The commission shall consult with interested parties,
38including ULTS providers, to develop the best methods of
39informing ULTS customers about other available low-income
P5    1programs, as well as the best mechanism for telephone providers
2to recover reasonable costs incurred pursuant to this section.

3(e) (1) The commission shall improve the CARE application
4process by cooperating with other entities and representatives of
5California government, including the California Health and Human
6Services Agency and the Secretary of California Health and Human
7Services, to ensure that all gas and electric customers eligible for
8public assistance programs in California that reside within the
9service territory of an electrical corporation or gas corporation,
10are enrolled in the CARE program. To the extent practicable, the
11commission shall develop a CARE application process using the
12existing ULTS application process as a model. The commission
13shall work with public utility electrical and gas corporations and
14the Low-Income Oversight Board established in Section 382.1 to
15meet the low-income objectives in this section.

16(2) The commission shall ensure that an electrical corporation
17or gas corporation with a commission-approved program to provide
18discounts based upon economic need in addition to the CARE
19program, including a Family Electric Rate Assistance program,
20utilize a single application form, to enable an applicant to
21alternatively apply for any assistance program for which the
22applicant may be eligible. It is the intent of the Legislature to allow
23applicants under one program, that may not be eligible under that
24program, but that may be eligible under an alternative assistance
25program based upon economic need, to complete a single
26application for any commission-approved assistance program
27offered by the public utility.

28(f) The commission’s program of assistance to low-income
29electric and gas customers shall, as soon as practicable, include
30nonprofit group living facilities specified by the commission, if
31the commission finds that the residents in these facilities
32substantially meet the commission’s low-income eligibility
33requirements and there is a feasible process for certifying that the
34assistance shall be used for the direct benefit, such as improved
35quality of care or improved food service, of the low-income
36residents in the facilities. The commission shall authorize utilities
37to offer discounts to eligible facilities licensed or permitted by
38appropriate state or local agencies, and to facilities, including
39women’s shelters, hospices, and homeless shelters, that may not
P6    1have a license or permit but provide other proof satisfactory to the
2utility that they are eligible to participate in the program.

3(g) It is the intent of the Legislature that the commission ensure
4CARE program participants are afforded the lowest possible
5electric and gas rates and, to the extent possible, are exempt from
6additional surcharges attributable to the energy crisis of 2000-01.

7(h) (1) In addition to existing assessments of eligibility, an
8electrical corporation may require proof of income eligibility for
9those CARE program participants whose electricity usage, in any
10monthly or other billing period, exceeds 400 percent of baseline
11usage. The authority of an electrical corporation to require proof
12of income eligibility is not limited by the means by which the
13CARE program participant enrolled in the program, including if
14the participant was automatically enrolled in the CARE program
15because of participation in a governmental assistance program. If
16a CARE program participant’s electricity usage exceeds 400
17percent of baseline usage, the electrical corporation may require
18the CARE program participant to participate in the Energy Savings
19Assistance Program (ESAP), which includes a residential energy
20assessment, in order to provide the CARE program participant
21with information and assistance in reducing his or her energy usage.
22Continued participation in the CARE program may be conditioned
23upon the CARE program participant agreeing to participate in
24ESAP within 45 days of notice being given by the electrical
25corporation pursuant to this paragraph. The electrical corporation
26may require the CARE program participant to notify the utility of
27whether the residence is rented, and if so, a means by which to
28contact the landlord, and the electrical corporation may share any
29evaluation and recommendation relative to the residential structure
30that is made as part of an energy assessment, with the landlord of
31the CARE program participant. Requirements imposed pursuant
32to this paragraph shall be consistent with procedures adopted by
33the commission.

34(2) If a CARE program participant’s electricity usage exceeds
35600 percent of baseline usage, the electrical corporation shall
36require the CARE program participant to participate in ESAP,
37which includes a residential energy assessment, in order to provide
38the CARE program participant with information and assistance in
39reducing his or her energy usage. Continued participation in the
40CARE program shall be conditioned upon the CARE program
P7    1participant agreeing to participate in ESAP within 45 days of a
2notice made by the electrical corporation pursuant to this paragraph.
3 The electrical corporation may require the CARE program
4participant to notify the utility of whether the residence is rented,
5and if so, a means by which to contact the landlord, and the
6electrical corporation may share any evaluation and
7recommendation relative to the residential structure that is made
8as part of an energy assessment, with the landlord of the CARE
9program participant. Following the completion of the energy
10assessment, if the CARE program participant’s electricity usage
11continues to exceed 600 percent of baseline usage, the electrical
12corporation may remove the CARE program participant from the
13program if the removal is consistent with procedures adopted by
14the commission. Nothing in this paragraph shall prevent a CARE
15program participant with electricity usage exceeding 600 percent
16of baseline usage from participating in an appeals process with the
17electrical corporation to determine whether the participant’s usage
18levels are legitimate.

19(3) A CARE program participant in a rental residence shall not
20be removed from the program in situations where the landlord is
21nonresponsive when contacted by the electrical corporation or
22does not provide for ESAP participation.



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