BILL ANALYSIS
AB 1421
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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
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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
FN: 0003058