BILL ANALYSIS                                                                                                                                                                                                    



                                                             


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|SENATE RULES COMMITTEE            |                   AB 811|
|Office of Senate Floor Analyses   |                         |
|1020 N Street, Suite 524          |                         |
|(916) 445-6614         Fax: (916) |                         |
|327-4478                          |                         |
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                       THIRD READING
                              

Bill No:  AB 811
Author:   Keeley (D)
Amended:  8/25/99 in Senate
Vote:     21

  
  SENATE ENERGY, U.&C. COMMITTEE  :  7-0, 7/13/99
AYES:  Alarcon, Baca, Brulte, Kelley, Peace, Solis, Speier
NOT VOTING:  Bowen, Hughes, Mountjoy, Vasconcellos

  SENATE APPROPRIATIONS COMMITTEE  :  Senate Rule 28.8

  ASSEMBLY FLOOR  :  76-0, 5/25/99 - See last page for vote
 

  SUBJECT  :    Electrical restructuring

  SOURCE  :     California Retailers Association

 
  DIGEST  :    This bill requires the California Public  
Utilities Commission to establish a Power Exchange credit  
based on actual energy usage, as specified.

  ANALYSIS  :    The value, and price, of electricity varies by  
time of day and season.  Consumption of electricity is much  
lower at 4:00 a.m. than it is at 4:00 p.m. and so is the  
price.  Traditional mechanical meters record the total  
amount of electricity consumed between readings, but do not  
record actual consumption patterns (temporal data).  TOU  
meters measure energy as it is being used, providing an  
exact reading of how much energy was used at any given  
time.

                                                 CONTINUED





                                                      AB 811
                                                       Page  
2

According to the sponsor of this bill, the California  
Retailers Association, retail stores and office buildings  
have above average loads (high usage during the day) and  
little ability to shift loads due to the constraints of  
normal business hours.  Customers exceeding a certain load  
who choose a direct access energy service provider (ESP)  
are required to install a TOU meter.  The meter data is  
used to precisely calculate their bill - actual usage in  
any hour multiplied by the actual energy cost for that  
hour.  Before the ESP can bill the customer, the local  
utility must generate a bill for transmission and  
distribution services, and for the CTC.  AB 1890 requires  
that these charges be determined residually by subtracting  
a credit for the commodity portion of the bill.  This  
credit is referred to as the PX credit.

Currently, the PX credit is calculated based on average  
"load profiles," even for customers with TOU meters.  All  
customers within a given customer class (e.g., residential,  
small commercial, agricultural, industrial) are credited  
for the total energy they consume according to a load  
profile for their customer class, rather than according to  
their own actual hourly usage. The load profile uses  
average historical data to estimate how much energy is  
purchased at any given hour by each customer class.

As a result, customers with a below average load  
(relatively low peak usage) get a higher PX credit relative  
to the actual value of the energy they consume than  
customers with an above average load (relatively high peak  
usage).  Because of the relationship between the PX credit  
and CTC calculations, above average customers also pay  
relatively more CTC.  If customers are allowed to take  
advantage of TOU meter readings in the calculation of the  
PX credit, those with above average loads will get a larger  
PX credit and smaller CTC obligation than they get under  
the current method.

This bill requires the California Public Utilities  
Commission (CPUC) to establish a Power Exchange energy  
credit (PX credit) that is calculated according to actual  
hourly data for customers with time-of-use (TOU) meters  
installed on or after June 30, 2000.








                                                      AB 811
                                                       Page  
3

The bill allows customers with TOU meters installed before  
June 30, 2000 to make a one-time choice, before June 30,  
2000, to have their PX credit calculated according to  
actual hourly data or the average load profile for their  
customer class.

The bill requires additional incremental billing costs  
resulting from the hourly calculation methodology to be  
recoverable from that customer class and prohibits shifting  
any costs between customer classes.

  Comments

Potential Impact on Consumption Patterns and CTC  
Collection  .  The current PX credit methodology effectively  
rewards efficient usage patterns, to the extent that a  
customer can "beat" the average load profile for his or her  
class.  When the PX credit is calculated according to an  
average load profile, customers who are more efficient than  
average receive a higher PX credit and, consequently, pay a  
lower CTC amount than they would if the PX credit is  
calculated according to hourly usage.  By enabling  
customers to collect a PX credit calculated according to  
hourly usage, this bill benefits above average energy  
consumers by increasing their PX credit and, consequently,  
decreasing their relative CTC contribution.  Essentially,  
these customers will be rewarded, compared to the current  
rules, for using an above average energy load.  The bill  
confines the CTC impact by prohibiting cost-shifting  
between customer classes, consistent with existing law.  
  
  FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  Yes    
Local:  No

  SUPPORT  :   (Verified  8/25/99)

California Retailers Association (source)
Agricultural Energy Consumers Association
Association of California Water Agencies 
Building Owners & Managers Association of California
Building Owners & Managers Association of San Francisco
California Cast Metals Association
California Manufacturers Association 
Chemical Industry Council of California







                                                      AB 811
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Green Mountain Energy Resources
New Energy Ventures
Southern California Edison


  ASSEMBLY FLOOR  : 
AYES:  Aanestad, Ackerman, Alquist, Aroner, Ashburn,  
  Baldwin, Bates, Battin, Baugh, Bock, Brewer, Briggs,  
  Calderon, Cardenas, Cardoza, Cedillo, Corbett, Correa,  
  Cox, Cunneen, Davis, Dickerson, Ducheny, Dutra,  
  Firebaugh, Florez, Frusetta, Gallegos, Granlund, Havice,  
  Hertzberg, Honda, House, Jackson, Kaloogian, Keeley,  
  Knox, Kuehl, Leach, Lempert, Leonard, Longville,  
  Lowenthal, Machado, Maddox, Maldonado, Margett, Mazzoni,  
  McClintock, Migden, Nakano, Olberg, Oller, Robert  
  Pacheco, Rod Pacheco, Pescetti, Reyes, Romero, Runner,  
  Scott, Shelley, Steinberg, Strickland, Strom-Martin,  
  Thompson, Thomson, Torlakson, Vincent, Washington, Wayne,  
  Wesson, Wiggins, Wildman, Wright, Zettel, Villaraigosa
NOT VOTING:  Campbell, Floyd, Papan, Soto


NC:cm  8/25/99   Senate Floor Analyses 

               SUPPORT/OPPOSITION:  SEE ABOVE

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