BILL ANALYSIS
SB 1939
Page 1
SENATE THIRD READING
SB 1939 (Alarcon)
As Amended August 18, 2000
Majority vote
SENATE VOTE :23-10
UTILITIES & COMMERCE 9-0 LOCAL GOVERNMENT 8-1
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|Ayes:|Wright, Calderon, |Ayes:|Longville, Robert |
| |Cardenas, Maddox, | |Pacheco, Corbett, Kuehl, |
| |Mazzoni, Reyes, | |Thompson, Thomson, |
| |Villaraigosa, Vincent, | |Torlakson, Wiggins |
| |Wesson | | |
| | | | |
|-----+--------------------------+-----+--------------------------|
| | |Nays:|Kaloogian |
| | | | |
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APPROPRIATIONS 17-4
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|Ayes:|Migden, Campbell, | | |
| |Alquist, Aroner, Cedillo, | | |
| |Corbett, Davis, Kuehl, | | |
| |Maldonado, Papan, Romero, | | |
| |Shelley, Thomson, Wesson, | | |
| |Wiggins, Wright, Zettel | | |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Ackerman, Ashburn, | | |
| |Brewer, Runner | | |
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SUMMARY : Requires local publicly-owned utilities, including
irrigation districts, which have not implemented programs for
low-income electricity customers, to perform a needs assessment
and establish rate assistance and energy efficiency programs,
and prohibits irrigation districts from providing electric
transmission or distribution service to retail customers in
another utility's service territory unless the district
certifies by ordinance that it provides public purpose programs,
and has universal service, consumer protection, and
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environmental policies comparable to those of the incumbent
utility provider. Additionally, makes various changes to
irrigation district voting requirements.
EXISTING LAW :
1)Requires each local publicly-owned utility to establish a
nonbypassable usage based charge to fund investments in
specified public purpose programs, including providing
services for low-income electricity customers.
2)Provides that the delivery of electricity over transmission
and distribution systems is currently regulated, and will
continue to be regulated to ensure system safety, reliability,
environmental protection, and fair access for all market
participants.
3)Provides that the transmission and distribution of electric
power remain essential services imbued with the public
interest that are provided over facilities owned and
maintained by the state's investor-owned utilities (IOUs).
4)Authorizes irrigation districts to generate, transmit, and
distribute electricity, including sale to municipalities,
public utility districts, or persons.
5)Allows municipal utilities and irrigation districts to provide
electric service both inside and outside the boundaries of
their service territory.
6)Requires a member of the board of directors of an irrigation
district to be a voter and a freeholder of the district and a
resident of the division that the director represents at the
time of nomination or appointment and during the director's
entire term.
FISCAL EFFECT :
1)Any costs to the California Public Utilities Commission (CPUC)
to enforce the requirements of this bill would be absorbable.
2)Any costs to local utilities to comply with the bill
requirements would be non-reimbursable because the costs could
be offset from the electric rates charged by those utilities.
SB 1939
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COMMENTS :
1)Public purpose programs. AB 1890 (Brulte), Chapter 854,
Statutes of 1996, the landmark electric restructuring law,
requires IOUs and publicly-owned utilities to impose a
surcharge on each electricity customer to fund, among other
programs, needs-based public purpose programs for low-income
electricity customers, including but not limited to, targeted
energy efficiency and rate discounts. The publicly-owned
utilities, unlike the IOUs, are not required to spend
specified amounts on public purpose programs and have total
discretion as to how these monies are spent.
2)An uneven record for irrigation districts offering electric
service. An overwhelming majority of the publicly-owned
utilities provide substantial funding for public purpose
programs, including low-income services. There are more than
60 irrigation districts in the state, but only four of them,
Imperial Irrigation District, Merced Irrigation District,
Modesto Irrigation District, and the Turlock Irrigation
District, are presently providing electrical service. Of the
four irrigation districts providing electrical service, the
Imperial Irrigation District is the only one that has been
willing to establish programs aimed at low-income customers.
The three other irrigation districts offering electric service
have either modest low-income programs or none at all.
3)Needs assessment, and the implementation of low-income
programs. This bill requires local publicly-owned utilities,
including irrigation districts, which have not implemented
programs for low-income electricity customers, or completed a
needs assessment for those programs, on or before December 31,
2000, to perform a needs assessment for those programs.
Following the needs assessment, the local publicly-owned
utilities would be required under this bill to establish and
fund a needs-based low-income rate assistance and energy
efficiency program.
4)Promoting equity in the availability of low-income programs.
The sponsor of this measure, Latino Issues Forum, asserts that
this bill is needed to ensure that publicly-owned utilities
and irrigation districts devote adequate resources to
low-income programs within their service area. A recent study
by the Rand Corporation entitled, "The Public Benefits of
California's Investments in Energy Efficiency," indicated that
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low-income households derive the greatest benefit from energy
efficiency and reduced energy expenditures. On average,
low-income households spend 8% of their income on electricity,
compared with 2% of a median-income household. Energy
efficiency programs, such as insulation replacement and
weatherstripping, result in significantly reduced monthly
energy costs for low-income households. Similarly, rate
discounts help ease the burden for low-income families who
spend a disproportionate amount of their monthly income on
energy bills.
5)Electric distribution competition. Section two of this bill
relates to electric distribution competition. Under this
bill, in order to provide electrical service in the service
territory of an IOU or local publicly owned electric utility,
an irrigation district must certify by ordinance that it
provides public purpose programs, universal service, customer
protection, and environmental policies regarding distribution
facilities that are comparable to those of the incumbent
utility provider. Universal service is defined as "service to
all retail customers who request service within reasonable
physical proximity to the district's distribution or
transmission wires and poles allowing for line extensions and
service, at published tariff rates and on a just, reasonable,
and non-discriminatory basis, comparable to that provided by
the current distribution service provider." Irrigation
districts would be additionally required to establish
environmental policies to establish environmental policies to
minimize or eliminate the duplication of electric transmission
or distribution policies.
6)Section 2 linked with AB 2638. Section two relating to
electric distribution competition shall not become operative
if AB 2638 (Calderon) is enacted and becomes operative. AB
2638, currently in the Senate, permits irrigation districts to
build and operate electric facilities in the service territory
of an IOU only upon the approval of CPUC or pursuant to a
service territory agreement between an irrigation district and
an IOU.
7)Voting criteria. Section three of this bill relates to
irrigation district voting requirements and the qualifications
of directors. Current law provides that only landowners are
eligible to sit on the board of directors of an irrigation
district. This bill removes that requirement in irrigation
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districts providing retail electric service. Section three of
this bill does not affect the 12 irrigation districts whose
governance is specifically set forth in other sections of
Division 11 of the Water Code.
Analysis Prepared by : Joseph Lyons / U. & C. / (916) 319-2083
FN: 0006347