Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including electrical, gas, and water corporations. Existing law authorizes the commission to fix the rates and charges for every public utility, and requires that those rates and charges be just and reasonable. Existing law authorizes an electrical, gas, or water corporation to offer credit card and debit card bill payment options, if approved by the commission, and, upon approval, authorizes an electrical, gas, or water corporation to recover, through an individual customer transaction fee, reasonable transaction costs incurred by the electrical, gas, or water corporation from those customers that choose those methods of payment. Existing law includes statements of legislative intent relative to electrical, gas, and water corporations offering customers the option to pay by credit card or debit card.

This bill would, until January 1, 2022, authorize a water corporation with more than 10,000 service connections to seek commission approval, through its general rate case application, to operate a pilot program designed to evaluate customer interest in, and utilization of, bill payment options, including, but not limited to, credit card, debit card, and prepaid card bill payment options, and to assess the cost-effectiveness of, and customer interests served by, customer access to those bill payment options. The bill would limit the duration of a pilot program to the duration of the water corporations rate case cycle. The bill would require the commission to allow a water corporation to recover the reasonable expenses incurred by the water corporation in providing its customers with these bill payment options, and to allow water corporations to not impose a transaction fee on its customers for using these bill payment options. The bill would prohibit the costs of a pilot program from being collected from low-income customers who participate in specified programs, and would require a water corporation that is operating a pilot program to provide certain notifications to its customers. The bill would require the commission, in consultation with the Low-Income Oversight Board, by July 1, 2020, to submit a report to specified legislative committees that, based on specified assessments, evaluates the usefulness of an individual customer transaction fee and includes a recommendation regarding individual customer transaction fees for credit card, debit card, and prepaid card bill payments accepted by water corporations.

Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including electrical, gas, and water corporations. Existing law authorizes the commission to fix the rates and charges for every public utility, and requires that those rates and charges be just and reasonable. Existing law authorizes an electrical, gas, or water corporation to offer credit card and debit card bill payment options, if approved by the commission, and, upon approval, authorizes an electrical, gas, or water corporation to recover, through an individual customer transaction fee, reasonable transaction costs incurred by the electrical, gas, or water corporation from those customers that choose those methods of payment. Existing law includes statements of legislative intent relative to electrical, gas, and water corporations offering customers the option to pay by credit card or debit card.

This bill would, until January 1, 2022, authorize a water corporation with more than 10,000 service connections to seek commission approval, through its general rate case application, to operate a pilot program designed to evaluate customer interest in, and utilization of, bill payment options, including, but not limited to, credit card, debit card, and prepaid card bill payment options, and to assess the cost-effectiveness of, and customer interests served by, customer access to those bill payment options. The bill would limit the duration of a pilot program to the duration of the water corporations rate case cycle. The bill would require the commission to allow a water corporation to recover the reasonable expenses incurred by the water corporation in providing its customers with these bill payment options, and to allow water corporations to not impose a transaction fee on its customers for using these bill payment options. The bill would prohibit the costs of a pilot program from being collected from low-income customers who participate in specified programs, and would require a water corporation that is operating a pilot program to provide certain notifications to its customers. The bill would require the commission, in consultation with the Low-Income Oversight Board, by July 1, 2020, to submit a report to specified legislative committees that, based on specified assessments, evaluates the usefulness of an individual customer transaction fee and includes a recommendation regarding individual customer transaction fees for credit card, debit card, and prepaid card bill payments accepted by water corporations.

Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including electrical, gas, and water corporations. Existing law authorizes the commission to fix the rates and charges for every public utility, and requires that those rates and charges be just and reasonable. Existing law authorizes an electrical, gas, or water corporation to offer credit card and debit card bill payment options, if approved by the commission, and, upon approval, authorizes an electrical, gas, or water corporation to recover, through an individual customer transaction fee, reasonable transaction costs incurred by the electrical, gas, or water corporation from those customers that choose those methods of payment. Existing law includes statements of legislative intent relative to electrical, gas, and water corporations offering customers the option to pay by credit card or debit card.

This bill would, until January 1, 2022, authorize a water corporation with 2,000 or more than 10,000 service connections to seek commission approval, through its general rate case application, to operate a pilot program designed to evaluate customer interest in, and utilization of, bill payment options, including, but not limited to, credit card, debit card, and prepaid card bill payment options, and to assess the cost-effectiveness of, and customer interests served by, customer access to those bill payment options. The bill would limit the duration of the a pilot program to the duration of the water corporations rate case cycle, but would authorize the commission to extend the program upon the request of the water corporation in its subsequent rate case application. cycle. The bill would require the commission to allow a water corporation to recover the reasonable expenses incurred by the water corporation in providing its customers with these bill payment options, and to allow water corporations to not impose a transaction fee on its customers for using these bill payment options. The bill would prohibit the costs of a pilot program from being collected from low-income customers who participate in specified programs, and would require a water corporation that is operating a pilot program to provide certain notifications to its customers. The bill would require the commission, in consultation with the Low-Income Oversight Board, by July 1, 2020, to submit a report to specified legislative committees that, based on specified assessments, evaluates the usefulness of an individual customer transaction fee and includes a recommendation regarding individual customer transaction fees for credit card, debit card, and prepaid card bill payments accepted by water corporations.

Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including electrical, gas, and water corporations. Existing law authorizes the commission to fix the rates and charges for every public utility, and requires that those rates and charges be just and reasonable. Existing law authorizes an electrical, gas, or water corporation to offer credit card and debit card bill payment options, if approved by the commission, and, upon approval, authorizes an electrical, gas, or water corporation to recover, through an individual customer transaction fee, reasonable transaction costs incurred by the electrical, gas, or water corporation from those customers that choose those methods of payment. Existing law includes statements of legislative intent relative to electrical, gas, and water corporations offering customers the option to pay by credit card or debit card.

This bill would, until January 1, 2022, authorize a water corporation with more than 10,000 2,000 or more service connections to seek commission approval approval, through its general rate case application, to operate a pilot program designed to evaluate customer interest in, and utilization of, bill payment options, including, but not limited to, credit card and debit card, debit card, and prepaid card bill payment options, for their water bills and to assess the cost-effectiveness of, and public customer interests served by, customer access to those bill payment options. The bill would limit the duration of the pilot program to the duration of the water corporations rate case cycle, but would authorize the commission to extend the program upon the request of the water corporation in its subsequent rate case application. The bill would require the commission to allow a water corporation to recover the reasonable expenses incurred by the water corporation in providing its customers with these bill payment options, and to allow water corporations to not impose a transaction fee on its customers for using these bill payment options. The bill would prohibit the costs of a pilot program from being collected by from low-income customers who participate in specified programs, and would require a water corporation that is operating a pilot program to provide certain notifications to its customers. The bill would require the commission, in consultation with the Low-Income Oversight Board, by July 1, 2020, to submit a report to specified legislative committees that includes an assessment of the use of credit cards by low-income customers to avoid service disconnections, an assessment of the impact of the use of credit cards for water bills on household debt burden, and an assessment of data regarding customer utilization and the cost-effectiveness of the bill payment options provided under the pilot program. The bill would require the report, based on these assessments and an assessment of the public interests served by these bill payment options, to evaluate that, based on specified assessments, evaluates the usefulness of an individual customer transaction fee and include includes a recommendation regarding individual customer transaction fees for credit card and debit card, debit card, and prepaid card bill payments accepted by water corporations.

Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including electrical, gas, and water corporations. Existing law authorizes the commission to fix the rates and charges for every public utility, and requires that those rates and charges be just and reasonable. Existing law authorizes an electrical, gas, or water corporation to offer credit card and debit card bill payment options, if approved by the commission, and, upon approval, authorizes an electrical, gas, or water corporation to recover, through an individual customer transaction fee, reasonable transaction costs incurred by the electrical, gas, or water corporation from those customers that choose those methods of payment. Existing law includes statements of legislative intent relative to electrical, gas, and water corporations offering customers the option to pay by credit card or debit card.

This bill would, until January 1, 2025, 2022, authorize a water corporation with more than 10,000 connections to seek commission approval to operate a pilot program designed to evaluate customer interest in, and utilization of, bill payment options, including, but not limited to, credit card and debit card bill payment options, for their water bills and to assess the cost-effectiveness of, and public interests served by, customer access to those bill payment options. The bill would require the commission to allow a water corporation to recover the reasonable expenses incurred by the water corporation in providing its customers with these bill payment options, and to allow water corporations to not impose a transaction fee on its customers for using these bill payment options. The bill would prohibit the costs of a pilot program from being collected by low-income customers who participate in specified programs, and would require a water corporation that is operating a pilot program to provide certain notifications to its customers. The bill would require the commission, in consultation with the Low-Income Oversight Board, by July 1, 2023, 2020, to submit a report to specified legislative committees that includes an assessment of the use of credit cards by low-income customers to avoid service disconnections, an assessment of the impact of the use of credit cards for water bills on household debt burden, and an assessment of data regarding customer utilization and the cost-effectiveness of the bill payment options provided under the pilot program. The bill would require the report, based on this data these assessments and an assessment of the public interests served by these bill payment options, to evaluate the usefulness of an individual customer transaction fee and include a recommendation regarding individual customer transaction fees for credit card and debit card bill payments accepted by water corporations.

Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including electrical, gas, and water corporations. Existing law authorizes the commission to fix the rates and charges for every public utility, and requires that those rates and charges be just and reasonable. Existing law authorizes an electrical, gas, or water corporation to offer credit card and debit card bill payment options, if approved by the commission, and, upon approval, authorizes an electrical, gas, or water corporation to recover recover, through an individual customer transaction fee, reasonable transaction costs incurred by the electrical, gas, or water corporation from those customers that choose to pay by those payment options. those methods of payment. Existing law includes statements of legislative intent relative to electrical, gas, and water corporations offering customers the option to pay by credit card or debit card.

Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including electrical, gas, and water corporations. Existing law authorizes the commission to fix the rates and charges for every public utility, and requires that those rates and charges be just and reasonable. Existing law authorizes an electrical, gas, or water corporation to offer credit card and debit card bill payment options, if approved by the commission, and, upon approval, authorizes an electrical, gas, or water corporation to recover reasonable transaction costs incurred by the electrical, gas, or water corporation from those customers that choose to pay by those payment options. Existing law includes statements of legislative intent relative to electrical, gas, and water corporations offering customers the option to pay by credit card or debit card.

This bill would delete the requirement that an electrical, gas, or water corporation obtain the approval of the commission in order to offer credit card and debit card bill payment options. express authorization for an electrical, gas, or water corporation to offer credit card and debit card bill payment options, if approved by the commission, and, upon approval, recover reasonable transaction costs incurred by the electrical, gas, or water corporation from those customers that choose to pay by those payment options. The bill would revise the statements of legislative intent to state the intent of the Legislature that customers of electrical, gas, or water corporations be allowed to pay their utility bills with forms of payment that are generally accepted in the retail marketplace and that the commission maintains its existing regulatory authority over the reasonableness of expenses incurred by an electrical, gas, or water corporation for providing customers the option of paying their bills by credit card and debit card through existing regulatory mechanisms.

Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including electrical, gas, and water corporations. Existing law authorizes the commission to fix the rates and charges for every public utility, and requires that those rates and charges be just and reasonable. Existing law authorizes an electrical, gas, or water corporation to offer credit card and debit card bill payment options, if approved by the commission, and, upon approval, authorizes an electrical, gas, or water corporation to recover reasonable transaction costs incurred by the electrical, gas, or water corporation from those customers that choose to pay by those payment options.

This bill would delete the requirement that an electrical, gas, or water corporation obtain the approval of the commission in order to offer credit card and debit card bill payment options.

CONCURRENCE IN SENATE AMENDMENTS

CSA1 Bill Id:AB 1180

Author:(Cristina Garcia)

As Amended Ver:August 8, 2016

Majority vote

Original Committee Reference: U. & C.

SUMMARY: Specifically, this bill:

1. Authorizes, until January 1, 2022, a water corporation with more than 10,000 service connections to seek California Public Utilities Commission (CPUC) approval through its general rate case to operate a pilot program designed to evaluate customer interest in, and utilization of, bill payment options, including, but not limited to, credit card, debit card and prepaid card bill payment options, and to assess the cost-effectiveness of, and customer interests served by, customer access to those bill payment options.
2. Limits the pilot program to the duration of the water corporation's general rate case cycle.
3. Requires the CPUC to allow a water corporation to recover the reasonable expenses incurred by the water corporation in providing its customers with these bill payment options, and to allow water corporations to not impose a transaction fee on its customers for using these bill payment options.
4. Prohibits the costs of a pilot program from being recovered of low-income customers who participate in specified programs, and requires a water corporation that is operating a pilot program to provide certain notifications to its customers.
5. Requires the CPUC, in consultation with the Low-Income Oversight Board, by July 1, 2020, to submit a report to the relevant legislative committees regarding the pilot programs operated by water corporations under this bill that includes an assessment of the use of credit cards by low-income customers to avoid service disconnections, an assessment of the impact of use of credit cards for customer bills on household debt burden, and an assessment of data considered on an aggregate basis regarding customer utilization and the cost-effectiveness of the bill payment options.
6. Requires the report, based on these assessments and an assessment of the customer interests served by providing these bill payment options, to evaluate the usefulness of an individual customer transaction fee and include a recommendation regarding individual customer transaction fees for credit card, debit card and prepaid card payments accepted by water corporations.
7. Sunsets the provisions authorizing the pilot programs on January 1, 2022, and sunsets the provisions to prepare a report on the use of credit cards by low-income customers on January 1, 2024.

The Senate amendments:

1. Codify a previously uncodified section of the bill that requires an assessment of the use of credit cards by low-income customers and sunset this section on January 1, 2024.
2. Make minor non-substantive changes

FISCAL EFFECT: According to the Senate Appropriations Committee, increased costs of approximately $131,000 per year (Public Utilities Commission Utilities Reimbursement Account) for the CPUC to monitor the rate case, collect and analyze data, and coordinate with the Low-Income Oversight Board.

COMMENTS:

1. CPUC's Regulation of Water Utilities: The CPUC has jurisdiction over 113 privately owned water utilities: nine Class A water utilities (10,000 or more connection points); five Class B water utilities (2,000 or more connection points); 25 Class C water utilities (500 or more connection points); and 74 Class D water utilities (less than 500 connection points). Combined, these utilities deliver water service to roughly 16% of the state's population (about six million residents). The CPUC regulates all aspects of the privately owned utilities' service provision, including assessing their rates to ensure they are reasonable, while providing a reasonable rate of return to continue to provide customers service and satisfy shareholders.
2. Credit Cards and Utilities: Currently, the CPUC requires electric, natural gas, and water companies it regulates to get approval from the CPUC to offer a credit/debit card bill payment option. As more and more customers turn to credit or debit cards as their primary payment method, companies must determine how to pay for the transaction cost of each payment. For the most part, unregulated retail and service providers recover the transaction cost by increasing the price of the good or service sold or absorbing the costs. In the case of a regulated utility, current law allows investor owned utilities to recover reasonable transactions cost, but only from those customers that choose to pay by those card payment options. As a result, some utilities assess a separate fee on top of the monthly bill, when a credit card is used to pay the bill. Others might absorb the cost of the credit card as a company expense. According to the CPUC, in the case of water corporations, the fee generally ranges between $1 and $3. According to the sponsor, California Water Association, this transaction fee assessed for paying a water bill using a credit card frustrates customers. While other forms of payment such as check processing or cash payments also generate some cost to the utility in order to process the payments, those transactions are not assessed on an individual fee to the user. Instead, the non-card payment transaction fees are spread across the entire customer base and recovered in utility rates.
3. Impact on Ratepayers: Currently, water corporations that offer payment by credit card and the water corporation either absorb these costs or charge a transaction fee. By allowing water corporations to forgo the individual transaction fee in lieu of recovering the expenses in the general rate case, ratepayers may experience an increase in rates to cover the costs. When a utility customer is about to have their service shutoff due to lack of payment, the option to pay with a credit card, depending on the terms of the credit card, may be less costly than the fee to have the service shutoff and restarted. However, that customer who uses their credit card to avoid shut off may add to household debt if they don't have the funds to pay the new credit card debt.
4. CPUC Low-Income Assistance for Water Ratepayers: Of the privately-owned utilities, the CPUC has authorized the largest nine water utilities to offer low-income rate assistance programs similar in concept to those provided to electricity customers through California Alternate Rates for Energy (CARE). Each water utility's program is varied in terms of the amount of the assistance provided to low-income customers and the collection of the surcharge from non-participating ratepayers to cover the cost of the program. Therefore, the provisions of this bill that prohibit a utility from recovering costs of the pilot program from low-income customers could be implemented fairly easily by the Class A water companies since they already identify their low-income customers through these assistance programs.
5. Pilot Programs Already Underway: The CPUC has already approved pilot programs to allow some water utilities to provide their customers the option to pay their utility with a credit or debit card without an individual transaction fee. However, unlike this bill, those pilot programs would require the utility to absorb any net costs in providing the credit card option. These include pilot programs by the California Water Service Company and Suburban Water Systems which include provisions that any costs exceeding the savings of processing payments with credit cards would be absorbed by the companies, instead of ratepayers. California Water Service Company reports that a growing number of customers are using credit cards to avoid discontinuing service for nonpayment, stating that in 2008 there were 8,814 customer transactions that fell into that category and as of 2014, there were 42,295 credit or debit card transactions over the year to avoid shut-off for nonpayment.
6. Need to Assess Credit Card Usage? This bill attempts to mitigate and better address ratepayer costs by requiring the CPUC to assess whether the pilot programs create an increase in household debt burden, requiring the utility to assess the pilot program usage, and requiring a report on the cost-effectiveness of the pilots.
7. Prior Legislation: AB 746 (Blakeslee), Chapter 426, Statutes of 2005, permitted an electrical, gas or water corporation to charge a reasonable transaction fee when customers pay their utility bills by credit card and debit card and exempts these fees from an existing exemption on retailers to impose a surcharge for using a credit card for payment.

Analysis Prepared by: Sue Kateley / U. & C. / (916) 319-2083 FN: 0004239

 THIRD READING  

Bill No: AB 1180

Author:

:

Vote:

SENATE ENERGY, U. & C. COMMITTEE: 11-0, 6/13/16

AYES: Hueso, Morrell, Cannella, Gaines, Hertzberg, Hill, Lara, Leyva, McGuire, Pavley, Wolk

SENATE APPROPRIATIONS COMMITTEE: 5-0, 6/27/16

AYES: Beall, Hill, McGuire, Mendoza, Nielsen

NO VOTE RECORDED: Lara, Bates

ASSEMBLY FLOOR: 71-3, 1/25/16 - See last page for vote

SUBJECT:

SOURCE: California Water Association

DIGEST: This bill allows, until January 1, 2022, specified water corporations to establish pilot programs, once approved by the California Public Utilities Commission (CPUC), that evaluate customer interest in using credit cards, debit cards and prepaid cards to pay utility bills, without requiring an individual payment transaction fee and allows these utilities to recover the reasonable expenses incurred in providing its customers with these bill payment options.

Senate Floor Amendments of 8/8/16 narrow eligibility for the credit card pilot program to only large water companies, specifically those with over 10,000 service connections (known as Class A), by removing reference to water companies with more than 2,000 service connections (which encompass both Class B and Class A). The amendments also remove this bill’s proposal to provide the CPUC the discretion to extend the pilot program beyond the time period approved in a utility’s general rate case.

ANALYSIS:

Existing law:

1. Establishes the CPUC to regulate privately owned public utilities in California. (Article XII of the California Constitution)
2. Requires the CPUC to establish the California Alternate Rates for Energy (CARE) program of assistance to low-income electric and gas customers with an annual household income not greater than 200 percent of the federal poverty guideline levels. (Public Utilities Code §739.1)
3. Requires the CPUC to consider programs to provide rate relief for low-income ratepayers of water corporations. (Public Utilities Code §739.8)
4. Authorizes an electrical, gas, or water corporation to offer credit card and debit card bill payment options, if approved by the CPUC, and, upon approval, authorizes an electrical, gas, or water corporation to recover, through an individual customer transaction fee, reasonable transaction costs incurred by the electrical, gas, or water corporations from those customers that choose those methods of payment. (Public Utilities Code §755)
5. Establishes the Low-Income Oversight Board to advise the CPUC on low-income electric, gas, and water customer issues and serve as a liaison for the CPUC to low-income ratepayers and representatives. (Public Utilities Code §382.1)
6. Exempts from the existing prohibition upon retailers to impose a surcharge on a cardholder who elects to use a credit card in lieu of payment by cash, check or similar means the transaction fee charges of an electrical, gas, or water corporation, and approved by the CPUC, on customer bill payments made by credit card or debit, and related penalties and cause of action. (Civil Code §1748.1)

This bill:

1. Authorizes, until January 1, 2022, a water corporation with more than 10,000 service connections to seek CPUC approval through its general rate case to operate a pilot program designed to evaluate customer interest in, and utilization of, bill payment options, including, but not limited to, credit card, debit card and prepaid card bill payment options, and to assess the cost-effectiveness of, and customer interests served by, customer access to those bill payment options.
2. Limits the pilot program to the duration of the water corporation’s general rate case cycle.
3. Requires the CPUC to allow a water corporation to recover the reasonable expenses incurred by the water corporation in providing its customers with these bill payment options, and to allow water corporations to not impose a transaction fee on its customers for using these bill payment options.
4. Prohibits the costs of a pilot program from being recovered of low-income customers who participate in specified programs, and requires a water corporation that is operating a pilot program to provide certain notifications to its customers.
5. Requires the CPUC, in consultation with the Low-Income Oversight Board, by July 1, 2020, to submit a report to the relevant legislative committees regarding the pilot programs operated by water corporations under this bill that includes an assessment of the use of credit cards by low-income customers to avoid service disconnections, an assessment of the impact of use of credit cards for customer bills on household debt burden, and an assessment of data considered on an aggregate basis regarding customer utilization and the cost-effectiveness of the bill payment options.
6. Requires the report, based on these assessments and an assessment of the customer interests served by providing these bill payment options, to evaluate the usefulness of an individual customer transaction fee and include a recommendation regarding individual customer transaction fees for credit card, debit card and prepaid card payments accepted by water corporations.
7. Provides that this bill shall remain in effect until January 1, 2024, and is repealed unless another statute is enacted.

Background

CPUC’s regulation of water utilities. The CPUC has jurisdiction over 113 privately owned water utilities: nine Class A water utilities (10,000 or more connection points); five Class B water utilities (2,000 or more connection points); 25 Class C water utilities (500 or more connection points); and 74 Class D water utilities (less than 500 connection points). Combined, these utilities deliver water service to roughly 16 percent of the state’s population (about six million residents). The CPUC regulates all aspects of the privately owned utilities’ service provision, including assessing their rates to ensure they are reasonable, while providing a reasonable rate of return to continue to provide customers service and satisfy shareholders.

Credit cards and utilities. Currently, the CPUC requires electric, natural gas, and water companies it regulates to get approval from the CPUC to offer a credit/debit card bill payment option. As more and more customers turn to credit or debit cards as their primary payment method, companies must determine how to pay for the transaction cost of each payment. For the most part, unregulated retail and service providers recover the transaction cost by increasing the price of the good or service sold or absorbing the costs. In the case of a regulated utility, current law allows investor owned utilities to recover reasonable transactions cost, but only from those customers that choose to pay by those card payment options. As a result, some utilities assess a separate fee on top of the monthly bill, when a credit card is used to pay the bill. According to the CPUC, in the case of water corporations, the fee generally ranges between $1 to $3. According to the sponsor, California Water Association, this transaction fee frustrates customers. While other forms of payment such as check processing or cash payments also generate some cost to the utility in order to process the payments, those transactions are not assessed on an individual fee to the user. Instead, the non-card payment transaction fees are spread across the entire customer base and recovered in utility rates.

Impact on ratepayers. By allowing water corporations to forgo the individual transaction fee in lieu of recovering the reasonable expenses in the general rate case, ratepayers may experience an increase in rates to cover the costs. However, it’s also likely the increased costs would be fairly minimal and possibly consistent with costs associated with processing other payments. When a utility customer is about to have their service shutoff due to lack of payment, the option to pay with a credit card, depending on the terms of the credit card, may be less costly than the fee to have the service shutoff and restarted.

CPUC low-income assistance for water ratepayers. Of the privately-owned utilities, the CPUC has authorized the largest nine water utilities to offer low-income rate assistance programs similar in concept to those provided to electricity customers through CARE. Each water utility’s program is varied in terms of the amount of the assistance provided to low-income customers and the collection of the surcharge from non-participating ratepayers to cover the cost of the program. Therefore, the provisions of this bill that prohibit a utility from recovering costs of the pilot program from low-income customers could be implemented fairly easily by the Class A water companies since they already identify their low-income customers through these assistance programs.

Pilot programs already underway. The CPUC has already approved pilot programs to allow some water utilities to provide their customers the option to pay their utility with a credit or debit card without an individual transaction fee. However, unlike this bill, those pilot programs would require the utility to absorb any net costs in providing the credit card option. These include pilot programs by California Water Service Company and Suburban Water Systems which include provisions that any costs exceeding the savings of processing payments with credit cards would be absorbed by the companies, instead of ratepayers. California Water Service Company reports that a growing number of customers are using credit cards to avoid discontinuing service for nonpayment, stating that in 2008 there were 8,814 customer transactions that fell into that category and as of 2014, there were 42,295 credit or debit card transactions over the year to avoid shut-off for nonpayment.

Need to assess credit card usage? This bill attempts to mitigate and better address ratepayer costs by requiring the CPUC to assess whether the pilot programs create an increase in household debt burden, requiring the utility to assess the pilot program usage, and requiring a report on the cost-effectiveness of the pilots. While well-intended, the reality is many consumers have grown accustomed to paying their bills online or by phone with credit cards, prepaid cards or bank accounts. In general, consumers in 2016 are likely to appreciate the convenience of utilizing more payment method options, so long as cash and check options are preserved. The CPUC may not have much expertise in assessing household debt burden and be limited in their ability to access information regarding customer’s perspectives on service disruptions as intended by the provisions of this bill.

Prior Legislation

AB 746 (Blakeslee, Chapter 746, Statutes of 2005) permitted an electrical, gas or water corporation to charge a reasonable transaction fee when customers pay their utility bills by credit card and debit card and exempts these fees from an existing exemption on retailers to impose a surcharge for using a credit card for payment.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

According to the Senate Appropriations Committee, increased costs of approximately $131,000 per year (Public Utilities Commission Utilities Reimbursement Account) for the CPUC to monitor the rate case, collect and analyze data, and coordinate with the Low-Income Oversight Board.

SUPPORT: (Verified 8/8/16)

California Water Association (source)

California American Water

California Bankers Association

California Credit Union League

Central Basin Municipal Water District

OPPOSITION: (Verified 8/8/16)

None received

ARGUMENTS IN SUPPORT: According to the sponsor of this bill, California Water Association (CWA): “a 2005 law is discouraging the payment of utility bills online by credit and debit cardholders at a time when more consumers are utilizing the convenience of online bill payment options as their primary method of paying recurring bills.” CWA argues that all forms of payment generate some processing costs. Therefore, residents who choose to use credit or prepaid cards to pay their utility bills should not be penalized with an individual transaction fee.

ASSEMBLY FLOOR: 71-3, 1/25/16

AYES: Achadjian, Alejo, Baker, Bigelow, Bloom, Bonilla, Bonta, Brown, Burke, Calderon, Campos, Chang, Chau, Chávez, Chiu, Chu, Cooley, Cooper, Dahle, Daly, Dodd, Eggman, Frazier, Gallagher, Cristina Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Hadley, Roger Hernández, Holden, Irwin, Jones, Jones-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte, O'Donnell, Olsen, Patterson, Quirk, Rendon, Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber, Wilk, Williams, Wood, Atkins

NOES: Travis Allen, Brough, Gray

NO VOTE RECORDED: Dababneh, Beth Gaines, Eduardo Garcia, Grove, Harper

Prepared by:

8/10/16 15:45:23

**** END ****

 THIRD READING  

Bill No: AB 1180

Author:

:

Vote:

SENATE ENERGY, U. & C. COMMITTEE: 11-0, 6/13/16

AYES: Hueso, Morrell, Cannella, Gaines, Hertzberg, Hill, Lara, Leyva, McGuire, Pavley, Wolk

SENATE APPROPRIATIONS COMMITTEE: 5-0, 6/27/16

AYES: Beall, Hill, McGuire, Mendoza, Nielsen

NO VOTE RECORDED: Lara, Bates

ASSEMBLY FLOOR: 71-3, 1/25/16 - See last page for vote

SUBJECT:

SOURCE: California Water Association

DIGEST: This bill allows, until January 1, 2022, specified water corporations to establish pilot programs, once approved by the California Public Utilities Commission (CPUC), that evaluate customer interest in using credit cards, debit cards and prepaid cards to pay utility bills, without requiring an individual payment transaction fee. This bill allows specified water corporations to recover the reasonable expenses incurred in providing its customers with these bill payment options.

ANALYSIS:

Existing law:

1. Establishes the CPUC to regulate privately owned public utilities in California. (Article XII of the California Constitution)
2. Requires the CPUC to establish the California Alternate Rates for Energy (CARE) program of assistance to low-income electric and gas customers with an annual household income not greater than 200 percent of the federal poverty guideline levels. (Public Utilities Code §739.1)
3. Requires the CPUC to consider programs to provide rate relief for low-income ratepayers of water corporations. (Public Utilities Code §739.8)
4. Authorizes an electrical, gas, or water corporation to offer credit card and debit card bill payment options, if approved by the CPUC, and, upon approval, authorizes an electrical, gas, or water corporation to recover, through an individual customer transaction fee, reasonable transaction costs incurred by the electrical, gas, or water corporations from those customers that choose those methods of payment. (Public Utilities Code §755)
5. Establishes the Low-Income Oversight Board to advise the CPUC on low-income electric, gas, and water customer issues and serve as a liaison for the CPUC to low-income ratepayers and representatives. (Public Utilities Code §382.1)
6. Exempts from the existing prohibition upon retailers to impose a surcharge on a cardholder who elects to use a credit card in lieu of payment by cash, check or similar means the transaction fee charges of an electrical, gas, or water corporation, and approved by the CPUC, on customer bill payments made by credit card or debit, and related penalties and cause of action. (Civil Code §1748.1)

This bill:

1. Authorizes, until January 1, 2022, a water corporation with more than 2,000 service connections to seek CPUC approval through its general rate case to operate a pilot program designed to evaluate customer interest in, and utilization of, bill payment options, including, but not limited to, credit card, debit card and prepaid card bill payment options, and to assess the cost-effectiveness of, and customer interests served by, customer access to those bill payment options.
2. Limits the pilot program to the duration of the water corporation’s rate case cycle, but allows the CPUC to extend the program at the request of the water corporation in its subsequent rate case application.
3. Requires the CPUC to allow a water corporation to recover the reasonable expenses incurred by the water corporation in providing its customers with these bill payment options, and to allow water corporations to not impose a transaction fee on its customers for using these bill payment options.
4. Prohibits the costs of a pilot program from being recovered of low-income customers who participate in specified programs, and would require a water corporation that is operating a pilot program to provide certain notifications to its customers.
5. Requires the CPUC, in consultation with the Low-Income Oversight Board, by July 1, 2020, to submit a report to the relevant legislative committees regarding the pilot programs operated by water corporations under this bill that includes an assessment of the use of credit cards by low-income customers to avoid service disconnections, an assessment of the impact of use of credit cards for customer bills on household debt burden, and an assessment of data considered on an aggregate basis regarding customer utilization and the cost-effectiveness of the bill payment options.
6. Requires the report, based on these assessments and an assessment of the customer interests served by providing these bill payment options, to evaluate the usefulness of an individual customer transaction fee and include a recommendation regarding individual customer transaction fees for credit card, debit card and prepaid card payments accepted by water corporations.
7. Provides that the bill shall remain in effect until January 1, 2024 and is repealed unless another statute is enacted.

Background

CPUC’s regulation of water utilities. The CPUC has jurisdiction over 113 privately owned water utilities: nine Class A water utilities (10,000 or more connection points); five Class B water utilities (2,000 or more connection points); 25 Class C water utilities (500 or more connection points); and 74 Class D water utilities (less than 500 connection points). Combined, these utilities deliver water service to roughly 16 percent of the state’s population (about six million residents). The CPUC regulates all aspects of the privately owned utilities’ service provision, including assessing their rates to ensure they are reasonable, while providing a reasonable rate of return to continue to provide customers service and satisfy shareholders.

Credit cards and utilities. Currently, the CPUC requires electric, natural gas, and water companies it regulates to get approval from the CPUC to offer a credit/debit card bill payment option. As more and more customers turn to credit or debit cards as their primary payment method, companies must determine how to pay for the transaction cost of each payment. For the most part, unregulated retail and service providers recover the transaction cost by increasing the price of the good or service sold or absorbing the costs. In the case of a regulated utility, current law allows investor-owned utilities to recover reasonable transactions cost, but only from those customers that choose to pay by those payment options. As a result, some utilities assess a separate fee on top of the monthly bill, when a credit card is used to pay the bill. According to the CPUC, in the case of water corporations, the fee generally ranges between $1 to $3. According to the sponsor, this transaction fee frustrates customers. While other forms of payment such as check processing or cash payments also generate some cost to the utility in order to process the payments, those transactions are not assessed on an individual fee to the user. Unlike credit or debit card fees, all the other payment transaction fees are spread across the entire customer base and recovered in utility rates.

Impact on ratepayers. By allowing water corporations to forgo the individual transaction fee in lieu of recovering the reasonable expenses in the general rate case, ratepayers may experience an increase in rates to cover the costs. However, it’s also likely the increased costs would be fairly minimal and possibly consistent with costs associated with processing other payments. When a customer may be about to have the service shutoff because of lack of payment, the option to pay with a credit card, depending on the terms of the credit card, may be less costly than the fee to have the service shutoff and restarted.

CPUC low-income assistance for water ratepayers. Of the privately-owned utilities, the CPUC has authorized the largest nine water utilities to offer low-income rate assistance (LIRA) programs similar in concept to those provided to electricity customers through CARE. However, each program is varied in terms of the amount of the assistance provided to low-income customers and the collection of the surcharge from non-participating ratepayers to cover the cost of the program. Combined, the nine largest utilities serve approximately 1.175 million customers. In CPUC Decision D.11-05-020, the CPUC ordered large water and energy utilities to exchange information about their low-income customers to cross-promote the goal of increasing participation in both programs. According to the CPUC, the effort has yielded a substantial increase in participation in the programs. By exempting LIRA and CARE eligible customers from the individual transaction fee, Class B utilities that do not operate a LIRA program will need to identify eligible customers through a different mechanism.

Pilot programs already underway. The CPUC has already approved pilot programs to allow some water utilities to provide their customers the option to pay their utility with a credit or debit card, without an individual transaction fee. However, unlike this bill, those pilot programs would require the utility to absorb any net costs in providing the credit card option. In August 2014, the CPUC approved a settlement of a 2012 General Rate Case application by the California Water Service Company (CalWater) which includes a pilot program to track costs and savings of processing credit and debit cards [https://www.calwater.com/docs/grc/2012/settlement/Exhibit_A_-_Settlement_Agreement.pdf]. CalWater agreed that any costs that exceed the savings would be absorbed by CalWater, instead of ratepayers. In its 2015 General Rate application, CalWater proposed to make the credit or debit card program permanent. According to CalWater's testimony in this case, approximately 15,000 LIRA and approximately 43,000 non-LIRA customers have paid their monthly water bills using credit cards. The average cost of processing each credit card transaction is $1.26 if it is an automated transaction. Suburban Water Systems, has initiated a pilot program, effective January 1, 2015, and has similar terms as the CalWater settlement, including the provision that any costs exceeding the savings would be absorbed by Suburban Water Systems, instead of ratepayers [http://www.swwc.com/suburban/tariff-preliminary-statement2.pdf]. Additionally, CalWater reports that a growing number of customers are using credit cards to avoid discontinuing service for nonpayment, stating that in 2008 there were 8,814 customer transactions that fell into that category and as of 2014, there were 42,295 credit or debit card transactions over the year to avoid shut-off for nonpayment.

Need to assess credit card usage? This bill attempts to mitigate and better address ratepayer costs by assessing whether the pilot programs create an increase in household debt burden, requiring the utility to assess the pilot program usage, and requiring a report on the cost-effectiveness of the pilots. While well-intended, the reality is that that many consumers have grown accustomed to paying their bills online or by phone with credit cards, prepaid cards or bank accounts. In general, consumers in 2016 are likely to appreciate more payment method options, so long as cash and check options are preserved. The CPUC may not have much expertise in assessing household debt burden and be limited in their ability to access information regarding customer’s perspectives on service disruptions as intended by the provisions of this bill.

Prior Legislation

AB 746 (Blakeslee, Chapter 746, Statutes of 2005) permitted an electrical, gas or water corporation to charge a reasonable transaction fee when customers pay their utility bills by credit card and debit card and exempts these fees from an existing exemption on retailers to impose a surcharge for using a credit card for payment.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

According to the Senate Committee on Appropriations, increased costs of approximately $131,000 per year (Public Utilities Commission Utilities Reimbursement Account) for the CPUC to monitor the rate case, collect and analyze data, and coordinate with the Low-Income Oversight Board.

SUPPORT: (Verified 6/28/16)

California Water Association (source)

California American Water

California Bankers Association

California Credit Union League

Central Basin Municipal Water District

OPPOSITION: (Verified 6/28/16)

None received

ARGUMENTS IN SUPPORT: According to the sponsor of the bill, California Water Association (CWA): “a 2005 law is discouraging the payment of utility bills online by credit and debit cardholders at a time when more consumers are utilizing the convenience of online bill payment options as their primary method of paying recurring bills.” CWA argues that all forms of payment generate some processing costs. Therefore, residents who choose to use credit or prepaid cards to pay their utility bills should not be penalized with an individual transaction fee.

ASSEMBLY FLOOR: 71-3, 1/25/16

AYES: Achadjian, Alejo, Baker, Bigelow, Bloom, Bonilla, Bonta, Brown, Burke, Calderon, Campos, Chang, Chau, Chávez, Chiu, Chu, Cooley, Cooper, Dahle, Daly, Dodd, Eggman, Frazier, Gallagher, Cristina Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Hadley, Roger Hernández, Holden, Irwin, Jones, Jones-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte, O'Donnell, Olsen, Patterson, Quirk, Rendon, Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber, Wilk, Williams, Wood, Atkins

NOES: Travis Allen, Brough, Gray

NO VOTE RECORDED: Dababneh, Beth Gaines, Eduardo Garcia, Grove, Harper

Prepared by:

6/29/16 15:56:03

**** END ****

SENATE COMMITTEE ON

Senator Ricardo Lara, Chair

2015 - 2016 Regular Session

AB 1180 (Cristina Garcia) - Rates and charges for water service: payment transaction fees

This bill does not meet the criteria for referral to the Suspense File.

Bill Summary:

SB 1180 allows, until January 1, 2022, specified water corporations to establish pilot programs that evaluate customer interest in transaction card and debit card payment option that do not require the customer to pay transaction fees. The bill also allows a water corporation to recover the reasonable expenses incurred in providing its customers with these bill payment options.

Fiscal Impact:

• Increased costs of approximately $131,000 per year (Public Utilities Commission Utilities Reimbursement Account) for the California Public Utilities Commission (CPUC) to monitor the rate case, collect and analyze data, and coordinate with the Low Income Oversight Board.

Background:

CPUC’s regulation of water utilities. The CPUC has jurisdiction over 113 privately owned water utilities: nine Class A water utilities (10,000 or more connection points); five Class B water utilities (2,000 or more connection points); 25 Class C water utilities (500 or more connection points); and 74 Class D water utilities (less than 500 connection points). Combined, these utilities deliver water service to roughly 16 percent of the state’s population (about six million residents). The CPUC regulates all aspects of the privately owned utilities’ service provision, including assessing their rates to ensure they are reasonable, while providing a reasonable rate of return to continue to provide customers service and satisfy shareholders.

Credit cards and utilities. Currently, the CPUC requires electric, natural gas, and water companies it regulates to secure approval before offering a credit/debit card bill payment option. Most unregulated retail and service providers recover transaction costs from various methods such as increasing the price of the good or service sold or using company revenue. However, regulated utilities may only recover reasonable transactions cost from customers who choose to use those payment options. As a result, some utilities assess a separate fee on top of the monthly bill, when a credit card is used to pay the bill. According to the CPUC, water corporation fees generally range between $1 and $3. Processing fees are not assessed on other forms of payment, such as cash or check, though these also generate some processing cost for the utility. Unlike credit or debit card fees, all the other payment transaction fees are spread across the entire customer base and recovered in rates.

Pilot programs already underway. In August 2014, the CPUC approved a settlement of a 2012 General Rate Case application by the California Water Service Company (CalWater) which includes, among other things, a pilot program to track costs and savings with processing credit and debit cards. As part of the settlement, CalWater agreed that any costs that exceed the savings would be absorbed by CalWater, instead of ratepayers. CalWater would have the option of pursuing a fee-based credit card or debit card payment offering.

Proposed Law:

This bill:

1. Authorizes, until January 1, 2022, a water corporation with more than 2,000 service connections to seek CPUC approval through its general rate case to operate a pilot program designed to evaluate customer interest in, and utilization of, bill payment options, including, but not limited to, credit card, debit card and prepaid card bill payment options, and to assess the cost-effectiveness of, and customer interests served by, customer access to those bill payment options.
2. Limits the pilot program to the duration of the water corporation’s rate case cycle, but allows the CPUC to extend the program at the request of the water corporation in its subsequent rate case application.
3. Requires the CPUC to allow a water corporation to recover the reasonable expenses incurred by the water corporation in providing its customers with these bill payment options, and to allow water corporations to not impose a transaction fee on its customers for using these bill payment options.
4. Prohibits the costs of a pilot program from being recovered of low-income customers who participate in specified programs, and would require a water corporation that is operating a pilot program to provide certain notifications to its customers.
5. Provides that the section shall remain in effect until January 1, 2022 and is repealed unless another statute is enacted.
6. Requires the CPUC, in consultation with the Low-Income Oversight Board, by July 1, 2020, to submit a report to the relevant legislative committees regarding the pilot programs operated by water corporations under this bill that includes an assessment of the use of credit cards by low-income customers to avoid service disconnections, an assessment of the impact of use of credit cards for customer bills on household debt burden, and an assessment of data considered on an aggregate basis regarding customer utilization and the cost-effectiveness of the bill payment options.
7. Requires the report, based on these assessments and an assessment of the customer interests served by providing these bill payment options, to evaluate the usefulness of an individual customer transaction fee and include a recommendation regarding individual customer transaction fees for credit card, debit card and prepaid card payments accepted by water corporations.
8. Provides that the section shall remain in effect until January 1, 2024 and is repealed unless another statute is enacted.

-- END --

SENATE COMMITTEE ON ENERGY, UTILITIES AND COMMUNICATIONS

Senator Ben Hueso, Chair

2015 - 2016 Regular

Bill No: Hearing Date: 6/13/2016

SUBJECT:

DIGEST: This bill would allow, until January 1, 2022, specified water corporations to establish pilot programs through a general rate case application, once approved by the California Public Utilities Commission (CPUC), that evaluate customer interest in utilization of credit cards, debit cards and prepaid cards without requiring an individual payment transaction fee and allow a water corporation to recover the reasonable expenses incurred in providing its customers with these bill payment options.

ANALYSIS:

Existing law:

1. Establishes the CPUC to regulate privately owned public utilities in California. (Article XII of the California Constitution)
2. Requires the CPUC to establish the California Alternate Rates for Energy (CARE) program of assistance to low-income electric and gas customers with an annual household income not greater than 200 percent of the federal poverty guideline levels. (Public Utilities Code §739.1)
3. Requires the CPUC to consider programs to provide rate relief for low-income ratepayers of water corporations. (Public Utilities Code §739.8)
4. Authorizes an electrical, gas, or water corporation to offer credit card and debit card bill payment options, if approved by the CPUC, and, upon approval, authorizes an electrical, gas, or water corporation to recover, through an individual customer transaction fee, reasonable transaction costs incurred by the electrical, gas, or water corporation from those customers that choose those methods of payment. (Public Utilities Code §755)
5. Establishes the Low-Income Oversight Board to advise the CPUC on low-income electric, gas, and water customer issues and serve as a liaison for the CPUC to low-income ratepayers and representatives. (Public Utilities Code §382.1)
6. Exempts from the existing prohibition upon retailers to impose a surcharge on a cardholder who elects to use a credit card in lieu of payment by cash, check or similar means the transaction fee charges of an electrical, gas, or water corporation, and approved by the CPUC, on customer bill payments made by credit card or debit, and related penalties and cause of action. (Civil Code §1748.1)

This bill:

1. Authorizes, until January 1, 2022, a water corporation with more than 2,000 service connections to seek CPUC approval through its general rate case to operate a pilot program designed to evaluate customer interest in, and utilization of, bill payment options, including, but not limited to, credit card, debit card and prepaid card bill payment options, and to assess the cost-effectiveness of, and customer interests served by, customer access to those bill payment options.
2. Limits the pilot program to the duration of the water corporation’s rate case cycle, but allows the CPUC to extend the program at the request of the water corporation in its subsequent rate case application.
3. Requires the CPUC to allow a water corporation to recover the reasonable expenses incurred by the water corporation in providing its customers with these bill payment options, and to allow water corporations to not impose a transaction fee on its customers for using these bill payment options.
4. Prohibits the costs of a pilot program from being recovered of low-income customers who participate in specified programs, and would require a water corporation that is operating a pilot program to provide certain notifications to its customers.
5. Provides that the section shall remain in effect until January 1, 2022 and is repealed unless another statute is enacted.
6. Requires the CPUC, in consultation with the Low-Income Oversight Board, by July 1, 2020, to submit a report to the relevant legislative committees regarding the pilot programs operated by water corporations under this bill that includes an assessment of the use of credit cards by low-income customers to avoid service disconnections, an assessment of the impact of use of credit cards for customer bills on household debt burden, and an assessment of data considered on an aggregate basis regarding customer utilization and the cost-effectiveness of the bill payment options.
7. Requires the report, based on these assessments and an assessment of the customer interests served by providing these bill payment options, to evaluate the usefulness of an individual customer transaction fee and include a recommendation regarding individual customer transaction fees for credit card, debit card and prepaid card payments accepted by water corporations.
8. Provides that the section shall remain in effect until January 1, 2024 and is repealed unless another statute is enacted.

Background

CPUC’s regulation of water utilities. The CPUC has jurisdiction over 113 privately owned water utilities: nine Class A water utilities (10,000 or more connection points); five Class B water utilities (2,000 or more connection points); 25 Class C water utilities (500 or more connection points); and 74 Class D water utilities (less than 500 connection points). Combined, these utilities deliver water service to roughly 16 percent of the state’s population (about six million residents). The CPUC regulates all aspects of the privately owned utilities’ service provision, including assessing their rates to ensure they are reasonable, while providing a reasonable rate of return to continue to provide customers service and satisfy shareholders.

Credit cards and utilities. Currently, the CPUC requires electric, natural gas, and water companies it regulates to get approval from the CPUC to offer a credit/debit card bill payment option. As more and more customers turn to credit or debit cards as their primary payment method, companies must determine how to pay for the transaction cost of each payment. For the most part, unregulated retail and service providers recover the transaction cost from various methods such as increasing the price of the good or service sold or using company revenue. In the case of a regulated utility, current law allows IOUs to recover reasonable transactions cost, but only from those customers that choose to pay by those payment options. As a result, some utilities assess a separate fee on top of the monthly bill, when a credit card is used to pay the bill. According to the CPUC, in the case of water corporations, the fee generally ranges between $1 to $3. According to the sponsor, this transaction fee frustrates customers. While other forms of payment such as check processing or cash payments also generate some cost for the utility to process the payments, those transactions are not assessed an individual fee to the user. Unlike credit or debit card fees, all the other payment transaction fees are spread across the entire customer base and recovered in rates.

Impact on ratepayers. By allowing water corporations to forgo the individual transaction fee in lieu of recovering the reasonable expenses in the general rate case, ratepayers may likely see an increase in rates to cover the costs. However, it’s also likely the increased costs would be fairly minimal and possibly consistent with costs associated with processing other payments. When a customer has no option but to have their service shutoff, the customer is also assessed a fee to turn the service back on. It’s possible the fee to turn the service back on could be more than the fee of financing the utility bill, depending on the terms of the credit card.

CPUC low-income assistance for water ratepayers. Of the privately-owned utilities, the CPUC has authorized the largest nine water utilities to offer low-income rate assistance (LIRA) programs similar in concept to those provided to electricity customers through CARE. However, each program is varied in terms of the amount of the assistance provided to low-income customers and the collection of the surcharge from non-participating ratepayers to cover the cost of the program. Combined, the nine largest utilities serve approximately 1.175 million customers. In CPUC Decision D.11-05-020, the CPUC ordered large water and energy utilities to exchange information about their low-income customers to cross-promote the goal of increasing participation in both programs. Reports from the CPUC indicate the effort has yielded a substantial increase in participation. By exempting LIRA and CARE eligible customers from the individual transaction fee, Class B utilities who don’t operate a LIRA program will need to identify these customers.

Pilot programs already underway. In August 2014, the CPUC approved a settlement^[1] of a 2012 General Rate Case application by the California Water Service Company (CalWater) which includes, among other things, a pilot program to track costs and savings with processing credit and debit cards. As part of the settlement, CalWater agreed that any costs that exceed the savings would be absorbed by CalWater, instead of ratepayers. CalWater would have the option of pursuing a fee-based credit card or debit card payment offering. In its 2015 General Rate application, CalWater proposed to make the credit or debit card program permanent. According to the application:

"Cal Water has been able to implement its credit or debit card program in a manner that is cost-effective, with no additional fee paid by credit or debit card users, and no cross-subsidy from customers who pay by other means. Customer usage of credit or debit cards continues to increase, among LIRA customers in particular, and this payment option appears to help customers avoid having their water service shut-off due to non-payment."

According to CalWater's testimony in this case, approximately 15,000 LIRA and approximately 43,000 non-LIRA customers have paid their monthly water bills using credit cards. CalWater has 477,000 customers. The average cost of processing each credit card transaction is approximately $1.26 if it is an automated transaction. CalWater did not provide cost information on processing other types of payments, however they did state that the vast majority of customers pay by checks that are processed by five permanent employees.

Another utility, Suburban Water Systems, has initiated a pilot program, effective January 1, 2015. Suburban Water Systems has about 300,000 customers and has similar terms as the CalWater settlement, including the provision that any costs exceeding the savings would be absorbed by Suburban Water Systems, instead of ratepayers.^[2]

According to discontinuing service for non-payment, CalWater reports that a growing number of customers are using credit cards in this situation. Specifically they state:

"In 2008 there were 8,814 payments that fell into that category. The amounts have consistently increased so that in 2014, there were 42,295 credit or debit card transactions over the year to avoid shut-off for nonpayment."

Need to assess credit card usage? This bill attempts to mitigate and better address ratepayer costs by assessing whether the pilots created an increase in household debt burden, requiring the utility to assess the pilot program usage, and requiring a report on the cost-effectiveness of the pilots. While well-intended, the reality is that that many consumers have grown accustomed to paying their bills online or by phone with either credit cards, prepaid cards or bank accounts. In general, consumers in 2016 are likely to appreciate more payment method options, so long as cash and check options are preserved. The CPUC may also not have much expertise in assessing household debt burden or be able to access information regarding customer’s perspectives on service disruptions. The author may wish to consider amending this bill to allow utilities to recover in rates the transaction costs related to all processing all payment options, including credit, debit and prepaid cards.

Double Referral. Should this bill be approved by the committee, it will be re-referred to the Senate Committee on Natural Resources and Water for its consideration.

Prior/Related Legislation

AB 746 (Blakeslee, Chapter 746, Statutes of 2005) permitted an electrical, gas or water corporation to charge a reasonable transaction fee when customers pay their utility bills by credit card and debit card and exempts these fees from an existing exemption on retailers to impose a surcharge for using a credit card for payment.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

SUPPORT:

California Water Association (Source)

California American Water

California Bankers’ Association

California Credit Union League

Central Basin Municipal Water District

OPPOSITION:

None received

ARGUMENTS IN SUPPORT: According to California Water Association, electric, natural gas, and water companies must first seek the CPUC’s permission to offer a credit/debit card payment option, and then charge their customers a transaction fee for paying their utility bill by credit/debit card. Public Utilities Code §755 requires utilities to charge customers a transaction fee if they pay their utility bills by credit/debit card to cover the bank interchange fees associated with the transaction, unless the CPUC no net

-- END --

1. https://www.calwater.com/docs/grc/2012/settlement/Exhibit_A_-_Settlement_Agreement.pdf ↑

2. http://www.swwc.com/suburban/tariff-preliminary-statement2.pdf ↑

ASSEMBLY THIRD READING

ATR Bill Id:AB 1180

Author:(Cristina Garcia)

As Amended Ver:January 13, 2016

Majority vote

SUMMARY: Authorizes a water corporation to seek California Public Utilities Commission (CPUC) approval through its general rate case application to operate a pilot program to evaluate customer interest in, and utilization of, additional bill payment options. Specifically, this bill:

1. Authorizes a water corporation with more than 10,000 service connections to seek, through its general rate case, CPUC approval to operate a pilot program designed to evaluate customer interest in, and utilization of, bill payment options, including credit card and debit card bill payment options for their water bills, as specified.
2. Authorizes a water corporation to recover the reasonable expenses incurred by the water corporation in providing to its customers bill payment options and prohibits the CPUC from requiring the water corporation to impose a transaction fee on its customers, as specified.
3. Prohibits the costs of a pilot program from being collected from low-income customers, as specified.
4. Requires a water corporation operating a pilot program to provide its customers with certain notifications, as specified.
5. Requires the CPUC to ensure that accepting bill payment options neither increases nor decreases the rate of return of the water corporation.
6. Sunsets the pilot program on January 1, 2022.
7. Requires the CPUC, in consultation with the Low-Income Oversight Board, by July 1, 2020, to submit to the Assembly Utilities and Commerce Committee and the Senate Energy, Utilities and Communications Committee, a report on the results of the water corporations operating a pilot program, as specified.

FISCAL EFFECT: According to the Assembly Appropriations Committee, this bill would have increased costs for the CPUC of approximately $130,000 to monitor the rate case and collect and analyze data for the report.

COMMENTS:

1. Author’s Statement: "Current law is impeding the payment of utility bills by credit and debit cards at a time when more consumers are utilizing the convenience of credit cards as their primary method of paying recurring bills. Due to the almost universal use of online commerce sites, from giants like Amazon to small local retailers, customers take it for granted that they can pay online by credit or debit card. They are confused, disgruntled, and often discouraged when they are required to pay an additional fee if they want to pay their utility bill with their credit or debit card. For example, how many customers end up waiting in line at a customer payment center to pay their bill in cash in order to avoid paying a transaction fee? AB 1180's pilot program would allow the CPUC to collect critical information on customer behavior."
2. Background: As more customers turn to credit or debit cards, including reward program cards, as their primary payment method, companies must determine how to pay for the transaction cost of each payment. For the most part, unregulated retail and service providers recover the transaction costs through various methods such as increasing the price of the good or service sold or using company revenue. But investor-owned utilities (IOUs), unlike retailers, cannot simply raise utility rates to offset the transaction costs. IOUs must submit a general rate case typically every three years detailing their revenues, expenses, and investments, including how much they wish to charge ratepayers. Current law restricts passing the transaction costs on to other utility customers; some utilities assess a separate fee on top of the monthly bill, when a credit card is used to pay the bill.
3. Impact on Ratepayers: The fundamental question is whether utilities should spread the transaction costs across all its customers or should the costs continue to be borne by the individual card user. Typically, transaction costs vary depending on the payment method being used and are negotiated between the retailer and the banking provider. According to the sponsor, this transaction fee discourages customers from using credit or debit cards. The sponsor notes that other forms of payment normally generate some costs to the utility processing it. Unlike credit or debit card fees, all the other payment transaction fees are spread across the entire customer base and recovered in rates. By moving the transaction costs into a water corporation's general rate case, individual customers would no longer see the transaction cost as a separate line item, but instead it would be blended into the cost of the utility bills for all customers.

This bill authorizes a water corporation with more than 10,000 service connections to seek CPUC approval through its general rate case; to create a pilot program designed to evaluate customer interest in and utilization of bill payment options, including credit or debit cards for their water bills; and to assess the effectiveness of such payment options for customers, as specified. This bill requires the CPUC, in consultation with the Low-Income Oversight Board, by July 1, 2020, to submit a report on pilot programs, as specified, to the Assembly Utilities and Commerce Committee and the Senate Energy, Utilities and Communications Committee. This bill sunsets the pilot program on January 1, 2022.

Analysis Prepared by: Edmond Cheung / U. & C. / (916) 319-2083 FN: 0002578

Date of Hearing: January 21, 2016

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Jimmy Gomez, Chair

ABPCA Bill Id:AB 1180

Author:(Cristina Garcia) – As Amended Ver:January 13, 2016

Urgency: No State Mandated Local Program: No Reimbursable: No

SUMMARY:

This bill allows a water corporation to seek approval from the Public Utilities Commission (PUC) to operate a pilot program designed to evaluate customer interest in bill paying options, including credit card and debit card payments. Specifically, this bill:

1. Authorizes a water corporation with more than 10,000 service connections to seek approval from the PUC to operate the pilot program through a general rate case. Requires the PUC to ensure alternative payment options do not increase or decrease the water corporations' rate of return.
2. Requires the pilot program to be designed to evaluate customer interest and asses the cost-effectiveness and public interests served.
3. Requires the PUC to allow water corporations to recover the reasonable costs of providing bill payment options in its rates, however, costs may not be recovered from customers participating in the California Alternative Rates for Energy (CARE) program.
4. Prohibits the PUC from requiring a water company to impose a transaction fee on its customers.
5. By July 1, 2020, requires the PUC, in consultation with the Low-Income Oversight Board, to submit a report to the Legislature that asses the impacts and effectiveness of the program, as specified, and evaluates whether a transaction fee on customers paying by credit or debit card is in the public interest.
6. Sunsets the pilot program authority on January 1, 2022.

FISCAL EFFECT:

Increased costs for the PUC (special fund) of approximately $130,000 to monitor the rate case and collect and analyze data for the report.

COMMENTS:

1. Purpose. According to the author, current law is discouraging the payment of utility bills by credit or debit card at a time when more people are using them to pay recurring bills. This bill allows a water utility to waive the transaction fee for customers paying with credit or debit cards. Additionally, this bill requires a robust analysis of the alternative payment pilot projects to determine the impacts on customers and inform future policy decisions.
2. Background. Current law requires electric, natural gas, and water investor-owned utilities (IOUs) to seek PUC approval to offer credit/debit card payment options. Current also law requires IOUs to charge customers a transaction fee to cover the bank interchange fees associated with the transaction. The transaction fee typically ranges from $2.00 to $3.00 per payment.

Analysis Prepared by: Jennifer Galehouse / APPR. / (916) 319-2081

Date of Hearing: January 11, 2016

ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE

Mike Gatto, Chair

ABPCA Bill Id:AB 1180 (

Author:Cristina Garcia) – As Amended Ver:January 4, 2016

SUBJECT: Rates and charges for electric, gas, and water service: credit or debit card payment

SUMMARY: Authorizes a water corporation to seek California Public Utilities Commission (CPUC) approval through its general rate case application to operate a pilot program to evaluate customer interest in and utilization of additional bill payment options. Specifically, this bill:

1. Authorizes a water corporation with more than 10,000 service connections to seek, through its general rate case, CPUC approval to operate a pilot program designed to evaluate customer interest in, and utilization of, bill payment options, including credit card and debit card bill payment options, for their water bills, as specified.
2. Authorizes a water corporation to recover the reasonable expenses incurred by the water corporation in providing to its customers bill payment options and prohibits the CPUC from requiring the water corporation to impose a transaction fee on its customers, as specified.
3. Requires the CPUC to ensure that accepting bill payment options neither increases nor decreases the rate of return of the water corporation.
4. Sunsets the pilot program on January 1, 2025.
5. Requires the CPUC by July 1, 2023, to submit to the Assembly Committee on Utilities and Commerce and the Senate Committee on Energy, Utilities and Communications a report that includes, on an aggregated basis, data regarding customer utilization and the cost effectiveness of the bill payment options provide by the water corporations operating pilot programs. The report shall evaluate the usefulness of the individual customer transaction fee and include a recommendation regarding individual customer transaction fees for credit card and debit card payments accepted by water corporations.

EXISTING LAW:

1. Authorizes an electrical, gas or water corporation to offer credit or debit card bill payment options, if approved by the CPUC. (Public Utilities Code Section 755)
2. Authorizes an electrical, gas, or water corporation, approved by the CPUC to offer credit or debit card bill payment options, to recover reasonable transaction costs incurred by the electrical, gas, or water corporation only from those customers that choose to pay by those payment options. (Public Utilities Code Section 755)
3. Requires the CPUC to determine through existing regulatory mechanisms the reasonableness of transaction costs charged to customers that choose to pay an electrical, gas, or water corporation by a credit or debit card bill payment option, as specified. (Public Utilities Code Section 755)
4. Requires the CPUC to determine how any associated costs or potential savings as a result of customers paying by the credit or debit card payment option shall be passed on to electrical, gas, or water corporation customers. (Public Utilities Code Section 755)
5. Requires the CPUC in determining how credit or debit card associated costs or savings are passed on to customers, the CPUC shall do the following:
6. The transaction costs that are passed on to customers be offset by any savings in transaction costs an electrical, gas, or water corporation derives as a result of those customers paying by credit card and debit card.
7. There to be no individual customer transaction fee, as specified, if the CPUC determines that the use of credit or debit cards results in no net cost to the electrical, gas, or water corporation.
8. Any net savings be passed on to electrical, gas, or water corporation customers, if the commission determines that the savings to an electrical, gas, or water corporation exceeds the costs to the electrical, gas, or water corporation. (Public Utilities Code Section 755)
9. Allows the CPUC to consider and implement programs to provide water rate relief for low-income ratepayers. (Public Utilities Code Section 739.8)

FISCAL EFFECT: Unknown.

COMMENTS:

1. Author’s Statement: “Current law is impeding the payment of utility bills by credit and debit cards at a time when more consumers are utilizing the convenience of credit cards as their primary method of paying recurring bills. Due to the almost universal use of online commerce sites, from giants like Amazon to small local retailers, customers take it for granted that they can pay online by credit or debit card. They are confused, disgruntled, and often discouraged when they are required to pay an additional fee if they want to pay their utility bill with their credit or debit card. For example, how many customers end up waiting in line at a customer payment center to pay their bill in cash in order to avoid paying a transaction fee? AB 1180’s pilot program would allow the CPUC to collect critical information on customer behavior.”
2. Background: In most retail and service establishments, customers have a range of payment options to pay for goods and service, including cash, checks, debit cards, credit cards, etc. Doing so provides conveniences for the customer as well as potential cost savings for the company. Furthermore, there has been a growing use of reward program cards, which provide customers with rewards such as airline miles, hotel points, cash back, etc. for every purchase they make. As more and more customers turn to credit or debit cards as their primary payment method, companies must determine how to pay for the transaction cost of each payment. For the most part, unregulated retail and service providers recover the transaction cost from various methods such as increasing the price of the good or service sold or using company revenue. In the case of a regulated utility, current law restricts passing these transaction costs on to other utility customers. As a result, some utilities assess a separate fee on top of the monthly bill, when a credit card is used to pay the bill.
3. IOUs and Credit or Debit Cards: Investor owned utilities (IOUs), unlike retailers, cannot simply raise utility rates to offset the transaction costs. IOUs must submit a general rate case typically every three years detailing their revenues, expenses, and investments, including how much they wish to charge ratepayers. Under current law, IOUs may offer credit or debit card payment options with the approval of the CPUC. If approved by the CPUC, IOUs may recover reasonable transactions cost, but only from those customers that choose to pay by those payment options.

According to the sponsor, this transaction fee discourages customers from using credit or debit cards. The sponsor notes that other forms of payment normally generate some cost to the utility processing it. Unlike credit or debit card fees, all the other payment transaction fees are spread across the entire customer base and recovered in rates.

1. Who uses Credit or Debit Cards? According to the Cash Product Office of the Federal Reserve System, cash is the most used retail payment instrument as of October 2012: 40 percent of customers use cash, followed by debit cards at 25 percent, and credit cards at 17 percent. Electronic methods (online bank bill pay and bank account payments) make up 7 percent. Text and mobile payments barely register at one half of one percent. They also point out that households making more than $200,000 per year exhibit a strong preference for credit cards while 55 percent of consumers with household incomes less than $25,000 per year prefer cash payments. Furthermore, the report points out that the highest income group uses credit cards for more than 40 percent of their monthly transactions.
2. Impact on Ratepayers: This bill authorizes a water corporation with more than 10,000 service connections to seek CPUC approval through its general rate case; to create a pilot program designed to evaluate customer interest in and utilization of bill payment options, including credit or debit cards for their water bills; and, to assess the effectiveness of such payment options for customers. The pilot program would allow the water corporation to recover reasonable expenses but not require the water corporation to impose a transaction fee.

By doing so, this bill would allow a water corporation to argue for higher rates for all its customers in its general rate case, in order to pay for the transaction cost associated with credit or debit card payments. The fundamental question is whether utilities should spread the transaction cost across all its customers or should the cost continue to be borne by the individual card user.

1. Impact on Low-Income Rate Assistance (LIRA) participants: Of the IOUs, only the large water utilities are authorized by the CPUC to offer Low-Income Rate Assistance (LIRA) programs. If a ratepayer meets low-income eligibility criteria (income less than 200 percent of the Federal Poverty Level), a bill discount is provided. These discounts are funded by non-participating ratepayers. As of October 2012, an estimated 221,940 residential water customers participated in the water rate assistance programs, including LIRA – approximately 3.7 percent of the population served by IOUs.

LIRA participants might face higher water bills because of the addition of transaction fees in water rates. This is likely to have a negative impact on the ability of low-income households to pay their utility bills or other debts, potentially focusing low income customers to rely on more sources of credit to finance their bills. The author may wish to exclude LIRA participants from having to bear the cost of any rate increase that may result from spreading the debit/credit card transaction fee across all customers in the general rate case.

1. Uncertain impact on household debt burden: In addition to the potential impact on affordability for LIRA participants, it is unclear whether there is a risk of increasing debt burdens on LIRA and non-LIRA households, as a result of moving credit card transaction charges into rates. For those households who may be having trouble paying monthly bills, they may choose to use credit, and go deeper into debt along with exposure to credit card interest rates. Using credit cards may reduce service disconnections for non-payment but at what cost to that customer? The author may wish to include an assessment of the use of credit cards for delinquent payments and the impact on household debt burden.
2. Transaction Cost and Transparency: Typically, transaction costs vary depending on the payment method being used and are negotiated between the retailer and the banking provider. By moving the transaction cost into a water corporation’s general rate case, customers would no longer see the transaction cost as a separate line item, but instead it would be blended into the cost of their utility bills. Furthermore, by moving the transaction cost into the general rate case, AB 1180 might create a disincentive for utilities to negotiate better transactions cost with banking providers for their customers if they believe they can simply recover the cost in customer rates.

In addition, this bill sunsets the program on January 1, 2025 and requires the CPUC to submit a report to the Assembly Committee on Utilities and Commerce and the Senate Committee on Energy, Utilities and Communications on the results of the pilot program. However, customers who are a part of the program might grow accustomed to using credit or debit cards as their primary payment option and it might become difficult to remove such a payment option or reintroduce a transaction fee after the pilot program period. The author may wish to consider an amendment to require water corporations to properly notify their customers that they are participating in a pilot program and that the program may not continue, pending an assessment of the costs and benefits. The author may also wish to consider a sunset to the program by January 1, 2022.

1. Pilot programs already underway? In August 2014, the CPUC approved a settlement^[1] of a 2012 General Rate Case application by the California Water Service Company (CalWater) which includes, among other things, a pilot program to track costs and savings with processing credit and debit cards. As part of the settlement, CalWater agreed that any costs that exceed the savings would be absorbed by CalWater, instead of ratepayers. CalWater would have the option of pursuing a fee-based credit card or debit card payment offering. In its 2015 General Rate application, CalWater proposed to make the credit or debit card program permanent. According to the application:

"Cal Water has been able to implement its credit or debit card program in a manner that is cost-effective, with no additional fee paid by credit or debit card users, and no cross-subsidy from customers who pay by other means. Customer usage of credit or debit cards continues to increase, among LIRA customers in particular, and this payment option appears to help customers avoid having their water service shut-off due to non-payment."

According to CalWater's testimony in this case, approximately 15,000 LIRA and approximately 43,000 non-LIRA customers have paid their monthly water bills using credit cards. CalWater has 477,000 customers. The average cost of processing each credit card transaction is approximately $1.26 if it is an automated transaction. CalWater did not provide cost information on processing other types of payments, however they did state that the vast majority of customers pay by checks that are processed by 5 permanent employees. CalWater did not provide cost data for those employees in this testimony.

Suburban Water Systems has recently initiated a pilot program, effective January 1, 2015. Suburban Water Systems has about 300,000 customers and has similar terms as the CalWater settlement, including the provision that any costs exceeding the savings would be absorbed by Suburban Water Systems, instead of ratepayers.^[2]

Regarding discontinuing service for non-payment, CalWater reports that a growing number of customers are using credit cards in this situation. Specifically they state:

"In 2008 there were 8,814 payments that fell into that category. The amounts have consistently increased so that in 2014, there were 42,295 credit or debit card transactions over the year to avoid shut-off for nonpayment."

The testimony did not provide detail on how many of those transactions were made by LIRA customers.

1. Arguments in Support: According to the California Water Association, the sponsor of the bill, “current law requires the transaction fee to be levied unless and until the CPUC determines that the use of credit and debit cards would result in no net cost to the utility. The “no net costs” standard has proved too high a bar and has effectively required a transaction fee to be charged. The irony is that all forms of payment generate some cost to the utility process them, from handling checks to staffing customer payment centers to processing payments by phone. As such, these other forms of payment are part of the overall cost-of-service, which means that, like all other utility operations, these processing costs are properly included in base rates. Those who pay in person, by phone, or through regular mail are not penalized through a separate processing fee like those who use credit or debit cards. This inequity is what AB 1180 is attempting to reconcile.”
2. Arguments in Opposition: According to the Office of Ratepayer Advocates (ORA), “while ORA recognizes the bill’s intent to provide customers with choice and convenience, AB 1180 would potentially allow water utilities to create bill payment option pilot programs for customers and recover associated expenses without a thorough CPUC review. Such a review is necessary to make sure these pilot programs are reasonably constructed and provide the CPUC with the information it needs to evaluate the payment options for cost-effectiveness, and if they are in the customers best interest.”
3. Suggested amendments:

755.5. (a) A water corporation with more than 10,000 service connections may seek, through its general rate case application, commission approval to operate a pilot program designed to evaluate customer interest in, and utilization of, bill payment options, including, but not limited to, credit card and debit card bill payment options, for their water bills and to assess the cost-effectiveness of, and public interests served by, customer access to those bill payment options.

(b) Notwithstanding Section 755, the commission shall allow a water corporation to recover the reasonable expenses incurred by the water corporation in providing to its customers bill payment options pursuant to subdivision (a) and shall not require the water corporation to impose a transaction fee on its customers.

(c) The costs of the program adopted and implemented pursuant to this section may not be recovered from customers participating in the California Alternate Rates for Energy or CARE program established pursuant to Section 739.1 or a water rate relief program for low-income ratepayers established pursuant to Section 739.8.

(d) The commission shall require water corporations to notify customers that they are participating in a pilot program and that program may not continue, pending an assessment of the costs and benefits to customers.

(c) The commission shall ensure that accepting bill payment options pursuant to subdivision (a) neither increases nor decreases the rate of return of the water corporation.

(d) (e) This section shall remain in effect only until January 1, 2025 2022, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2025 2022, deletes or extends that date.

SEC. 2. By July 1, 2023 2020, the commission, in consultation with the Low Income Oversight Board, shall submit to the Assembly Committee on Utilities and Commerce and the Senate Committee on Energy, Utilities and Communications a report that includes an assessment of the use of credit cards to avoid service disconnections by low income customers, an assessment of the impact of the use of credit cards for water bills on household debt burden, and an assessment, on an aggregated basis, of data regarding customer utilization and the cost-effectiveness of the bill payment options provided by the water corporations operating pilot programs pursuant to Section 755.5 of the Public Utilities Code. Based on this data and an assessment of the public interests served by providing these bill payment options, the report shall evaluate the usefulness of the individual customer transaction fee required by Section 755 of the Public Utilities Code, and include a recommendation regarding individual customer transaction fees for credit card and debit card payments accepted by water corporations.

REGISTERED SUPPORT / OPPOSITION:

Support

California Water Association (Sponsor)

California American Water

Opposition

Office of Ratepayer Advocates

Analysis Prepared by: Edmond Cheung / U. & C. / (916) 319-2083

1. https://www.calwater.com/docs/grc/2012/settlement/Exhibit_A_-_Settlement_Agreement.pdf ↑

2. http://www.swwc.com/suburban/tariff-preliminary-statement2.pdf ↑