BILL ANALYSIS AB 811 Page 1 ASSEMBLY THIRD READING AB 811 (Keeley) As Amended April 19, 1999 Majority vote UTILITIES AND COMMERCE 11-0 APPROPRIATIONS 21-0 ----------------------------------------------------------------- |Ayes:|Wright, Pescetti, |Ayes:|Migden, Brewer, Ashburn, | | |Campbell, Cardenas, | |Campbell, Corbett, Davis, | | |Florez, Frusetta, Kuehl, | |Granlund, Hertzberg, | | |Maddox, Papan, Reyes, | |Kuehl, Ackerman, Papan, | | |Wesson | |Aroner, Runner, Shelley, | | | | |Steinberg, Thomson, | | | | |Wesson, Wiggins, Wright, | | | | |Zettel, Longville | ----------------------------------------------------------------- SUMMARY : Requires the California Public Utilities Commission (CPUC) to establish a Power Exchange (PX) credit based on actual energy usage, as specified. Specifically, this bill: 1)Specifies that the PX credit shall consist of PX energy cost and the actual hourly recorded usage of the customer for each hour in the billing period. 2)Requires CPUC to implement a methodology whereby the PX energy credit for a customer with a meter capable of recording hourly data is calculated based on the actual hourly data for that customer. 3)Prohibits this methodology from resulting in any shifts in cost between customer classes. EXISTING LAW requires: 1)All rules made by a public utility affecting or pertaining to its charges or services to the public shall be just and reasonable. 2)CPUC to recover uneconomic costs associated with electric restructuring, including transition costs, as defined, to be allocated as prescribed. AB 811 Page 2 3)Individual customers not experience rate increases as a result of the allocation of transition costs. FISCAL EFFECT : Minor, absorbable costs to CPUC to staff a proceeding regarding this methodology. COMMENTS : The PX credit is calculated based on the average load profiles of each customer rate class. The statistical load profiles are determined based on average historical data updated on a regular basis. The load profile is an estimate of how much energy is purchased at any given hour by each customer class. This bill would require CPUC to establish a PX credit for customers with real-time meters based on actual hourly data recorded by the customer's meter. This would create a PX credit based on actual usage rather than customer class averages. Real-time, or time-of-use meters, measures energy usage as it is being used, enabling an exact reading of how much energy was used at any given time. More traditional meters, used by the vast majority of customers, indicate total energy consumption but do not indicate when the energy was consumed. According to the California Manufacturers Association (CMA), the existing PX credit adopted by CPUC "creates winner and losers by using a rate class average" which penalizes businesses "that have no option but to operate during peak times of the day." According to Southern California Edison, this bill "appropriately provides for the proper methodology for calculating the PX energy credit for customers with hourly meters." Existing law requires that rates charged to customers must "be just and reasonable." CPUC has broad authority to set rates for customers of public utilities. This bill would establish a rate-making methodology for customers using real-time energy meters. While the Legislature should be at the forefront of setting public policy, a questions remains as to whether it is prudent to statutorily prescribe rate-making methodologies. Analysis Prepared by : Joseph Lyons / U. & C. / (916) 319-2083 AB 811 Page 3 FN: 0000937