BILL ANALYSIS                                                                                                                                                                                                    



                                                          AB 811
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ASSEMBLY THIRD READING
AB 811 (Keeley)
As Amended April 19, 1999
Majority vote 

  UTILITIES AND COMMERCE          11-0                 
APPROPRIATIONS      21-0        
  
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|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
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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
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