BILL ANALYSIS
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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
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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
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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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