BILL ANALYSIS                                                                                                                                                                                                    



                                                          AB 1421
                                                          Page  1

Date of Hearing:   May 19, 1999

              ASSEMBLY COMMITTEE ON APPROPRIATIONS 
                    Carole Migden, Chairwoman

         AB 1421 (Wright) - As Amended: April 26, 1999 

Policy Committee:                              Utilities and  
Commerce     Vote:                             11-0

Urgency:     No                   State Mandated Local  
Program:YesReimbursable:          No

  SUMMARY  :

This bill, as proposed to be amended, codifies that  
investor-owned utilities are the default providers of gas and  
electrical service.  Specifically, this bill: 

1)Requires the Public Utilities Commission (PUC) to require gas  
  corporations to provide basic service to all of their core  
  customers unless a customer affirmatively chooses another  
  supplier.

2)Requires public utility gas corporations to be the exclusive  
  provider of specified services, including meter reading,  
  billing, leak investigation, pilot relighting, and inspecting  
  customer piping and appliances.

3)Requires the PUC to require electrical corporations to provide  
  basic electrical service-including metering, billing, and  
  collection service-to all customers unless a customer  
  affirmatively chooses another electrical service provider.  If  
  another provider is chosen, that entity may also provide  
  metering, billing, and collection services to the customer.

4)Deletes authorization for the PUC to investigate further  
  restructuring of natural gas services.

5)Deletes authorization for the PUC to investigate a process for  
  establishing default electrical service.

  FISCAL EFFECT  :

Absorbable costs to the PUC.








                                                          AB 1421
                                                          Page  2


  COMMENTS  :

  1)Background  .  By statutorily defining the role of the default  
  provider, this bill limits the role of PUC in setting policy  
  and guidelines.  This bill would repeal the provisions of the  
  Public Utilities Code permitting PUC to exercise its authority  
  to investigate a process for certification and regulation of  
  the rates, charges, terms, and conditions of default service.   
  SB 477 (Peace, Chapter 275, Statutes of 1997) additionally  
  provide that if PUC determines that a process for  
  certification and regulation of default service is in the  
  public interest, the commission shall submit its findings and  
  recommendations to the Legislature for approval. 

 2)Support  .  According to the sponsors, the Coalition of  
  California Utility Employees and the Southern California Gas  
  Workers Council, this bill "will ensure that all residential  
  and small business customers can be assured of continued safe  
  and reliable basic electrical and gas service, including  
  bundled revenue cycle services if they choose to continue to  
  receive electric and gas from their existing investor-owned  
  utility."  

  3)Opposition  .  The Consumers Union and the Clean Power  
  Campaign-a coalition of environmental and public interest  
  groups-oppose the bill due in part to concerns that making the  
  public utilities the default provider of electricity and gas  
  would strengthen their market power under deregulation.  The  
  IBEW Local 47 from Southern California requests amendments to  
  the bill that would (a) convert a customer's meter to an  
  automatic meter only if requested by the customer and (b)  
  include in the Legislative declaration (Section 7 of the bill)  
  language regarding electrical service that the service be  
  provided using "full-time California" employees of the  
  electrical utilities.

  4)Author's Amendments  .  The author proposes amendments to delete  
  portions of the bill that (a) authorize gas corporations to  
  offer competitive rate schedules and (b) authorize electrical  
  corporations to offer rate alternatives to purchasing energy  
  as part of basic electrical service.

  Analysis Prepared by  :    Chuck Nicol / APPR. / (916)319-2081