BILL ANALYSIS
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|SENATE RULES COMMITTEE | AB 1421|
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THIRD READING
Bill No: AB 1421
Author: Wright (D)
Amended: 8/18/99 in Senate
Vote: 21
SENATE ENERGY, U.&C. COMMITTEE : 7-3, 8/25/99
AYES: Alarcon, Baca, Hughes, Kelley, Peace, Solis, Speier
NOES: Bowen, Brulte, Mountjoy
NOT VOTING: Vasconcellos
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
ASSEMBLY FLOOR : 50-17, 5/27/99 - See last page for vote
SUBJECT : Gas and electric service
SOURCE : Author
DIGEST : This bill establishes the incumbent utilities as
the mandatory provider of "default" bundled gas service and
prohibits the Public Utilities Commission from unbundling
distribution-related gas and electric services, such as
metering and billing, for most customers.
ANALYSIS : Existing law authorizes the California Public
Utilities Commission (CPUC) to investigate restructuring of
natural gas services, but requires it to submit its
recommendations to the Legislature, and prohibits it from
enacting any gas restructuring decisions prior to January
1, 2000 (SB 1602 (Peace), Chapter 401, Statutes of 1998).
CONTINUED
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This bill prevents further restructuring of gas services by
designating the incumbent utilities as the mandatory
provider of "default" bundled gas service and prohibiting
the CPUC from unbundling distribution-related gas services,
such as metering and billing, for most customers.
Specifically, the bill :
Requires that gas utilities provide "bundled basic gas
service" (including transmission, storage, distribution,
purchasing, revenue cycle services and after meter
services) to all "core" (residential and small commercial)
customers, unless the customer chooses to purchase gas from
a non-utility provider.
Requires that gas utilities be the exclusive provider of
"revenue cycle services" (meter installation and reading,
billing, collection and related customer services) for all
customers, except that non-core customers and core
customers served by an aggregator may receive billing and
collection services from a non-utility provider.
Requires that, where billing and collection services by
non-utility providers are permitted, the existing "avoided
cost" methodology for calculating credits provided by the
utility in lieu of providing these services must be
maintained.
Requires "after meter services" (leak detection and other
safety-related services) to be included in the distribution
rate and not billed separately.
The bill additionally requires electric utilities to
conduct research to determine the typical simultaneous peak
load of agricultural customers with multiple meters and
report to those customers and the CPUC by July 1, 2001. It
also requires the CPUC to consider the research results in
setting future distribution rates for those customers.
Background
The natural gas commodity market has been opened to
competition for several years in California and customers
have the choice to buy the commodity itself from the
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incumbent utility provider or alternative providers.
However, the appropriate level of competition for the range
of services related to providing the gas has been the
subject of ongoing debate and discussion, both in the
Legislature and at the CPUC. This bill proposes a final
answer to any lingering questions about further
restructuring of gas services.
Pursuant to SB 1602, the CPUC is authorized to investigate
restructuring of gas services, but is required to submit
its recommendations to the Legislature, and prohibited from
enacting any gas restructuring decisions prior to January
1, 2000.
This bill prohibits competition for gas-related revenue
cycle services, including meter installation and reading,
billing, collection and related customer services, by
requiring that utilities be the exclusive provider of these
services for all customers. Only non-core customers and
core customers served by an aggregator may receive billing
and collection services from a non-utility provider. For
these customers, the existing avoided cost methodology
(which favors the incumbent providers) for calculating
credits provided by the utility in lieu of providing these
services must be maintained.
With one exception, this bill's provisions are generally
consistent with the CPUC's July 8, 1999 natural gas
strategy decision (D.99-07-015) which outlines future
options for the gas restructuring. In the decision, the
CPUC recommends that the utility be the provider of default
service, meter installation and reading, and after-meter
services.
The exception to this bill's consistency with the CPUC
decision is on the issue of billing. The CPUC identifies
open competition in billing services for core customers as
a promising option, while this bill prohibits competition
for billing services for most customers.
The CPUC intends to submit its final recommendations on
these matters to the Legislature for review later this
year. Because this bill repeals SB 1602 and definitively
concludes that gas services should not be further
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unbundled, it renders the moratorium, the CPUC
investigation and future review of the findings by the
Legislature moot.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
SUPPORT : (Verified 8/30/99)
Advocates for Consumer Equity, Inc.
Agricultural Energy Consumers Association
California Farm Bureau Federation
California Firefighters
California Labor Federation, AFL-CIO
California Teamsters Public Affairs Council
Coalition of California Utility Employees
Consumer Federation of California
Engineers and Scientists of California, Local 20, IFPTE
(San Francisco)
Eric Lawson, Torrance
International Brotherhood of Electrical Workers, Local 100
(Fresno)
International Brotherhood of Electrical Workers, Local 11
(Pasadena)
International Brotherhood of Electrical Workers, Local
1245 (Walnut Creek)
International Brotherhood of Electrical Workers, Local
1710 (El Monte)
International Brotherhood of Electrical Workers, Local 18
(Los Angeles)
International Brotherhood of Electrical Workers, Local 180
(Vallejo)
International Brotherhood of Electrical Workers, Local
2295 (El Monte)
International Brotherhood of Electrical Workers, Local 234
(Castroville)
International Brotherhood of Electrical Workers, Local 302
(Pleasant Hill)
International Brotherhood of Electrical Workers, Local 332
(San Jose)
International Brotherhood of Electrical Workers, Local 340
(Sacramento, Yolo)
International Brotherhood of Electrical Workers, Local 40
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(North Hollywood)
International Brotherhood of Electrical Workers, Local 413
(Santa Barbara)
International Brotherhood of Electrical Workers, Local 428
(Bakersfield)
International Brotherhood of Electrical Workers, Local 440
(Riverside)
International Brotherhood of Electrical Workers, Local 441
(Orange County)
International Brotherhood of Electrical Workers, Local 45
(Hollywood)
International Brotherhood of Electrical Workers, Local 465
(San Diego)
International Brotherhood of Electrical Workers, Local 477
(San Bernardino)
International Brotherhood of Electrical Workers, Local 551
(Santa Rosa)
International Brotherhood of Electrical Workers, Local 569
(San Diego)
International Brotherhood of Electrical Workers, Local 595
(Dublin)
International Brotherhood of Electrical Workers, Local 6
(San Francisco)
International Brotherhood of Electrical Workers, Local 617
(San Mateo)
International Brotherhood of Electrical Workers, Local 639
(San Luis Obispo)
International Brotherhood of Electrical Workers, Local 684
(Modesto)
International Brotherhood of Electrical Workers, Local 952
(Ventura)
International Chemical Workers Union Conference/United Food
and Commercial Workers Union, Local 350 (Temple City)
International Chemical Workers Union Conference/United Food
and Commercial Workers Union, Local 47 (West Covina)
International Chemical Workers Union Conference/United Food
and Commercial Workers Union, Local 58 (La Verne)
International Chemical Workers Union Conference/United Food
and Commercial Workers Union, Local 78 (Alta Loma)
Los Angeles County Federation of Labor, AFL-CIO
Pacific Gas and Electric Company
Resources for Independent Living, Inc.
San Diego-Imperial Counties Labor Council, AFL-CIO
San Mateo County Central Labor Council
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SEMPRA Energy
Southern California Edison
Southern California Gas Workers Council
State Building and Construction Trades Council of
California
Utility Workers Union of America (National Union)
Utility Workers Union of America, Local 132 (Los Angeles)
Utility Workers Union of America, Local 170 (Bakersfield)
Utility Workers Union of America, Local 246 (Los Alamitos)
Utility Workers Union of America, Local 465 (San Diego)
Utility Workers Union of America, Local 483 (Santa Barbara)
Utility Workers Union of America, Local 522 (Moreno Valley)
Utility Workers Union of America, Local 659 (Central Point,
Oregon)
OPPOSITION : (Verified 8/30/99)
Association of Bay Area Governments
Association of California Water Agencies (ACWA)
Automated Power Exchange
California Public Utilities Commission (CPUC)
Clean Power Campaign
College of Marin
Consumers Union
Dixie School District, San Rafael
Enron Corporation
Environmental Defense Fund
Eureka City Schools
Folsom Cordova Unified School District
Fresno Unified School District
Greenmountain Energy Resources
Independent Energy Producers Association
International Brotherhood of Electrical Workers, Local 47
Marin County Office of Education
New Energy Ventures
New Haven Unified School District
Office of Ratepayer Advocates (ORA)
Pacific Utility Installation, Inc.
Peralta Community College District
Polaris Group
Pollock Pines Elementary School District
Reliant Energy
San Francisco Unified School District
Santa Rosa Junior College
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School Project for Utility Rate Reduction
Sierra Club
Tamalpais Union High School District
The Utility Reform Network (TURN)
Tulare Joint Union High School District
Utility Consumers' Action Network (UCAN)
Utility.com
Western Power Trading Forum
ASSEMBLY FLOOR :
AYES: Ackerman, Alquist, Baldwin, Bates, Battin, Campbell,
Cardenas, Cardoza, Cedillo, Correa, Cox, Cunneen,
Dickerson, Ducheny, Dutra, Firebaugh, Florez, Floyd,
Frusetta, Gallegos, Granlund, Havice, Hertzberg, Honda,
Kaloogian, Leach, Mazzoni, Nakano, Olberg, Oller, Robert
Pacheco, Rod Pacheco, Papan, Pescetti, Romero, Runner,
Scott, Soto, Steinberg, Strickland, Thomson, Torlakson,
Vincent, Washington, Wesson, Wiggins, Wildman, Wright,
Zettel, Villaraigosa
NOES: Aroner, Ashburn, Bock, Brewer, Briggs, House,
Keeley, Kuehl, Lempert, Leonard, Longville, Maddox,
Margett, Migden, Reyes, Strom-Martin, Thompson
NOT VOTING: Aanestad, Baugh, Calderon, Corbett, Davis,
Jackson, Knox, Lowenthal, Machado, Maldonado, McClintock,
Shelley, Wayne
NC:sl 8/31/99 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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