BILL ANALYSIS                                                                                                                                                                                                    



                                                          AB 1421
                                                          Page  1

CONCURRENCE IN SENATE AMENDMENTS
AB 1421 (Wright)
As Amended August 18, 1999
Majority vote
  
ASSEMBLY: 50-17                 ( May 27, 1999 )                 
SENATE:   26-8 ( September 1, 1999 )         
   
  Original Committee Reference:    U. & C.  

  SUMMARY  :  Defines basic gas service, to be provided by the  
incumbent utilities, and prohibits the California Public  
Utilities Commission (CPUC) from unbundling distribution-related  
gas services, such as metering and billing, for most customers.

  The Senate amendments  delete provisions relating to basic  
electric service, and the establishment of a default provider of  
electric service.  Additionally, the amendments require electric  
utilities serving agricultural customers to conduct research  
relating to the energy usage of agricultural customers, and  
require CPUC to consider the research results in setting  
distribution rates for agricultural customers.

  EXISTING LAW  :

1)Permits CPUC to investigate the restructuring of natural gas  
  services, as specified, but prohibits the enactment and  
  enforcement of any natural gas restructuring decisions for  
  core customers prior to January 1, 2000.

1)Permits CPUC to exercise its authority to investigate a  
  process for certification and regulation of the rates,  
  charges, terms, and conditions of default service, and to  
  submit its findings and recommendations to the Legislature for  
  approval.

  AS PASSED BY THE ASSEMBLY  , this bill:

1)Declared core (i.e., small commercial and residential)  
  customers should continue to receive bundled, basic gas  
  service from the incumbent gas utility unless the customer  
  elects to receive service from another entity.

2)Defined basic gas service to include transmission, storage,  
  distribution, purchasing natural gas on behalf of a customer,  








                                                          AB 1421
                                                          Page  2

  revenue cycle services (i.e., metering, billing, and  
  collection) and after-meter services (i.e., leak  
  investigation, inspecting customer piping and appliances,  
  carbon monoxide investigation, pilot relighting, and high bill  
  investigation).

3)Declared all customers of an electrical corporation should  
  continue to receive bundled, basic electric service from the  
  incumbent electric utility unless the customer elects to  
  receive power through a direct transaction with another  
  service provider.

4)Defined basic electric service to include transmission,  
  distribution, purchasing electric power on behalf of a  
  customer, and revenue cycle services (i.e., metering, billing,  
  and collection).

5)Specified that the incumbent gas utility shall continue to be  
  the exclusive provider of revenue cycle services, except as  
  specified, and provided that the incumbent electric utility  
  shall continue to provide revenue cycle services unless the  
  customer elects to receive power from another provider.

  FISCAL EFFECT  :  Absorbable costs to CPUC.

  COMMENTS  :  The natural gas commodity market in California was  
deregulated several years ago, enabling customers to choose to  
buy the gas commodity from the incumbent utility provider or  
alternate providers.  The distribution of natural gas is  
provided by the incumbent gas utilities.  This bill would  
establishes the incumbent gas utilities as the providers of  
basic gas service, and prohibit CPUC from unbundling  
distribution-related gas services, such as metering and billing,  
for most customers.

SB 1602 (Peace), Chapter 401, Statutes of 1998, authorized CPUC  
to investigate the further restructuring of gas services, and  
required CPUC to submit its recommendations to the Legislature.   
Chapter 401 prohibited CPUC from enacting any gas restructuring  
decisions prior to January 1, 2000.  This bill repeals Chapter  
401, and prohibits the further unbundling of gas services. 

In September, 1998, CPUC's Safety Branch determined that further  
unbundling of natural gas metering and billing would create  
safety risks for customers, the public, and utility employees.   








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This bill establishes that revenue cycle services and  
after-meter services shall be included in bundled, basic gas  
service.  Thus, utilities will be prevented from charging  
separately to investigate gas leaks, relight pilot lights, check  
gas appliances, or check for carbon monoxide leaks.  Low- and  
middle-income customers will be protected from having to choose  
between safety and saving money on a service call.

This bill also provides for a study of the electric distribution  
rates for agricultural customers with multiple meters.  Many  
agricultural customers believe that utilities are not fairly  
metering their consumption, which leads to high distribution  
rates.  The intent of this study is to create a more accurate  
load profile for agricultural customers by determining the  
typical simultaneous peak load for those customers.  (A load  
profile is an estimate of how much energy is purchased at any  
given hour by each customer class).  CPUC will be required to  
consider the research results in setting distribution rates for  
agricultural customers.


  Analysis Prepared by  :    Joseph Lyons / U. & C. / (916) 319-2083  

  
  
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