BILL ANALYSIS 1
1
SENATE ENERGY, UTILITIES AND COMMUNICATIONS COMMITTEE
DEBRA BOWEN, CHAIRWOMAN
------------------------------------------------------------
|SB 1217 - Polanco |Hearing Date:May 11, 1999 | S|
|------------------------------+--------------------------+--|
|As Amended:As proposed to be | | B|
|amended | | |
|------------------------------+--------------------------+--|
| | | |
|------------------------------+--------------------------+--|
| | | 1|
|------------------------------+--------------------------+--|
| | | 2|
|------------------------------+--------------------------+--|
| | | 1|
|------------------------------+--------------------------+--|
| | | 7|
|------------------------------+--------------------------+--|
| | | |
------------------------------------------------------------
DESCRIPTION
Part 1:
Current law requires the California Public Utilities
Commission (CPUC) to administer six telecommunications
programs, created pursuant to statute and paid for by
consumers via their telephone bills. The CPUC appoints
advisory boards to each of these programs to assist in the
administration.
This bill codifies the advisory boards for each of the six
programs and creates accounts in the state treasury to hold
the program funds.
Part 2:
Current law establishes programs to finance cost-effective
energy efficiency and conservation activities and low
income rate assistance which are funded by ratepayers and
administered by utility companies.
This bill requires the Bureau of State Audits to conduct a
performance and financial audit of the Department of
Community Services and Development (Department) to consider
the efficiency of the Department's administration of
federal low income energy assistance programs. A report is
to be presented to the Legislature by July 1, 2000.
This bill requires the California Public Utilities
Commission (CPUC), if it elects to competitively bid the
state's low income energy assistance program, to evaluate
the bids based on cost and quality criteria. The quality
criteria shall include whether the bidder has experience
and is effective at doing similar work, has knowledge of
the targeted communities, and has an ability to reach
targeted communities.
KEY QUESTION
If low income energy assistance programs are subject to
competitive bid, should an organization's ability to
deliver high quality of service be a bid criteria?
BACKGROUND
Part 1:
The CPUC has implemented six statutorily authorized
programs, funded by utility customers, whose aggregate
revenues exceed $1 billion annually. The funds are held in
trust. According to the CPUC, both the Attorney General
and the Department of Finance have informally expressed
their preference that the funding for these programs be
kept with the state and that the advisory boards be
codified.
The specific advisory boards and funds created by this bill
include:
a) The California High-Cost Fund-A Administrative
Committee and Fund, designed to keep rates for rural
telephone companies low.
b) The California High Cost Fund-B Administrative
Committee and Fund, designed to keep rates for rural
customers low.
c) The Universal Lifeline Telephone Service Trust
Administrative Committee and Fund, designed to
provide low cost telephone service to low income
households.
d) The Deaf and Disabled Telecommunications
Program Administrative Committee and Fund, designed
to provide discounted telephone service and
equipment to the deaf and disabled.
e) The Payphone Service Providers Committee and
Fund, designed to provide consumer protection to pay
telephone customers.
f) The California Teleconnect Fund Administrative
Committee and Fund, designed to fund advanced
communications services for schools, libraries, and
community organizations.
This portion of the bill simply formalizes the current
programs by codifying the CPUC-created advisory boards and
creates funds in the state treasury to hold the monies from
each program. This part of the bill is substantially
similar to AB 2461 (Campbell) of last year, which passed
this committee 8-0 but was vetoed by the Governor because
it provided for additional civil service positions.
Part 2:
The remaining provisions of the bill deal with the
administration of the California Alternate Rates for Energy
program (CARE), a discount energy rate program for low
income customers, and the Low Income Energy Efficiency
program (LIEE), an energy efficiency program for low income
customers. The CARE program costs $125 million annually and
provides eligible low income gas and electric customers
with a 15% credit against their bill. The LIEE program
costs $60 million annually and provides home weatherization
and energy efficiency devices, such as energy efficient
lighting, to qualifying customers, whether they are
property owners or renters. The LIEE programs are
contracted out to numerous community-based organizations
usually, but not exclusively, on a competitive-bid basis.
The bill requires that if the CPUC contracts out the LIEE
programs on a competitive-bid basis, the bid criteria shall
include quality of service criteria. The bill also
requires an audit of the Department to see if they would be
an appropriate entity for administering these programs in
the future.
COMMENTS
1)Part 1 of the bill is sponsored by the CPUC to create a
continuous appropriation of the program funds to ensure
these programs aren't interrupted by the unpredictability
of the state budget process and make the funding less
susceptible to diversion for other purposes. The CPUC is
not the sponsor of the language contained in the May 6
amendments to the bill.
2)While portions of this bill (Part 1) are substantially
similar to AB 2461 (Campbell) of 1998, this bill differs
slightly in the appointment of the advisory board
members. Both bills require the CPUC to appoint the
board members and to attempt to achieve balanced public
participation for each board. This bill additionally
calls for the membership of the board to reflect, to the
extent possible and consistent with existing law, the
ethnic and gender diversity of the state.
3)Part 2 of the bill calls for an audit of the capabilities
of the Department. The purpose of the audit is to see if
the Department would be an appropriate organization for
administering existing low income energy efficiency
programs. Currently the utilities administer these
programs under the guidance of the CPUC. This part of
the bill also requires the CPUC to consider quality of
service criteria if it elects to put the low income
energy efficiency programs out to competitive bidding.
These quality of service criteria include experience,
effectiveness at doing similar work, knowledge of the
effected communities, and an ability to reach the
effected communities.
4)At least two other bills deal with this same issue, SB
1194 (Sher) and AB 1393 (Wright), so the committee will
consider this subject matter again soon.
POSITIONS
Support (prior version):
ASCEEP
Bay Area Poverty Resource Council
California Department of Community Services and Development
Campesinos Unidos, Inc.
Community Enhancement Services
CPUC
Eddie Dillen Companies
MAAC Project
Maravilla Foundation
Pacific Asian Consortium in Employment
Pacific Bell
Riverside County Department of Community Action
San Bernardino County Community Services Department
Santa Barbara County Community Action Commission
Spectrum Community Services, Inc.
Inter-City Energy Systems, Inc.
Ventura County Commission on Human Concerns & Community
Development
Veterans in Community Service, Inc.
Oppose (prior version):
El Dorado County Department of Community Services
Inyo Mono Advocates for Community Action, Inc.
Latino Issues Forum
Office of Ratepayer Advocates
Southern California Edison
Sempra Energy
Randy Chinn
SB 1217 Analysis
Hearing Date: May 11, 1999