Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including electrical 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.

This bill would require electrical corporations, on or before July 1, 2017, 2018, to establish utility service guarantee programs. The bill would require the programs to automatically provide each customer that experiences an outage for a continuous 24-hour period a $30 bill credit for each continuous 24-hour period that the customer was without power, which would be borne exclusively by the shareholders of the electrical corporations. The bill would also require electrical corporations to engage in public outreach and educate the public about the program to increase public awareness.

Under existing law, a violation of the Public Utilities Act or any order, decision, rule, direction, demand, or requirement of the commission is a crime.

Because the provisions of this bill would be a part of the act and because a violation of an order or decision of the commission implementing its requirements would be a crime, the bill would impose a state-mandated local program by creating a new crime.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including electrical 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.

This bill would require electrical corporations to provide customers that experience outages for a continuous 24-hour period with a $25 bill credit for each 24-hour period that they were without power. corporations, on or before July 1, 2017, to establish utility service guarantee programs. The bill would require the programs to automatically provide each customer that experiences an outage for a continuous 24-hour period a $30 bill credit for each 24-hour period that the customer was without power, which would be borne exclusively by the shareholders of the electrical corporations. The bill would also require electrical corporations to engage in public outreach and educate the public about the program to increase public awareness.

Under existing law, a violation of the Public Utilities Act or any order, decision, rule, direction, demand, or requirement of the commission is a crime.

Because the provisions of this bill would be a part of the act and because a violation of an order or decision of the commission implementing its requirements would be a crime, the bill would impose a state-mandated local program by creating a new crime.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including electrical 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.

This bill would require electrical corporations to provide customers that experience outages for a continuous 24-hour period with a $25 bill credit for each 24-hour period that they were without power.

Under existing law, a violation of the Public Utilities Act or any order, decision, rule, direction, demand, or requirement of the commission is a crime.

Because the provisions of this bill would be a part of the act and because a violation of an order or decision of the commission implementing its requirements would be a crime, the bill would impose a state-mandated local program by creating a new crime.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Date of Hearing: May 18, 2016

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Lorena Gonzalez, Chair

ABPCA Bill Id:AB 2381

Author:(Roger Hernández) – As Amended Ver:April 26, 2016

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

SUMMARY:

This bill requires the Public Utilities Commission (PUC) to direct electric utilities to establish utility service guarantee programs (SGPs), on or before July 1, 2018, to automatically provide each customer a $30 bill credit for each continuous 24-hour period that the customer is without power. Specifically, this bill:

1. Specifies the bill credit is not an exclusive remedy and does not affect any other relief or remedy provided by law.
2. Requires electric corporations to engage in public outreach to increase awareness of the program.
3. Requires shareholders to exclusively bear the cost of their service guarantee programs, rather than ratepayers.
4. Allows an electrical corporation that has a program to provide bill credits for outages prior to January 1, 2017 to update its program to comply with the bill rather than create a new program.
5. Requires electric corporations to report to the Legislature, on or before July 2, 2019, and annually thereafter, on the number of customers provided a bill credit and the total amount credited to customers through these service guarantee programs.
6. Specifies that the program requirement does not apply to outages under any of the following circumstances:
   1. The outage is planned and for maintenance.
   2. The outage is caused by a moderate, severe, or catastrophic storm condition.
   3. The facilities, lines, equipment, or other property necessary to restore power are inaccessible or are deemed unsafe to access.
   4. The outage occurs during a declared emergency event or cause related to an extraordinary event or circumstance beyond the control of the electric corporation (force majeure).
   5. The affected service location is vacant.

FISCAL EFFECT:

Increased costs for the PUC estimated between approximately $50,000 to $170,000 depending upon whether the implementation and modification of the SGPs are done through Advice Letter or through a proceeding (Public Utilities Commission Utilities Fund).

This bill requires the PUC to establish new utility service guarantee programs for San Diego Gas & Electric (SDG&E) and Bear Valley Electric Services (BVES); and to modify existing service guarantee programs for Pacific Gas & Electric (PG&E), Southern California Edison (SCE), and PacifiCorp.

COMMENTS:

1. Purpose. According to the author, two utility companies have existing automatic bill credit programs that offer some relief for customers without power for extended periods of time. This bill builds off the success of these programs and extends requirements to all electric corporations.
2. Background. Power outages are not an uncommon occurrence and can sometimes last a few hours to a few days. Such outages not only create an inconvenience for residents and businesses, but can also cause health and safety issues, as well as economic damages to businesses and communities. Under current law, the CPUC is required to adopt inspection, maintenance, repair, and replacement standards for electric distribution systems, as well as standards for operation, reliability, and safety during periods of emergency and disaster.

In most cases, electric utilities provide businesses and residents reimbursements if they suffered a loss or damage due to a service interruption as a result of the utility. Utilities judge each claim individually. For example, according to SCE's website, SCE evaluates each claim individually, and determines: a) if loses occurred due to their negligence; b) how the incident happened; c) the extent of damages; and d) what the law considers fair compensation. Customers must submit proof and documentation to verify their claims along with the application.

1. Existing Service Guarantee Programs. The PUC adopted Decision (D.) 00-02-046 in PG&E’sTest Year (TY) 1999 General Rate Case (GRC) proceeding to create PG&E’s Quality Assurance Program (QA Program). It was later modified by D.04-05-055 in its TY 2003 GRC proceeding and in D.07-03-044 in its TY 2007 GRC proceeding. D.04-05-055 adopted a settlement between PG&E and the Office of Ratepayer Advocates (ORA) that established a $30 bill credit for any failure to meet the quality service standards. Standard 7 of the QA Program pertains to restoration of services within 24 hours. PG&E reports quarterly to the PUC on credits paid to customers.

The PUC adopted D.04-07-022 in SCE’s Test Year (TY) 2003 GRC proceeding to create SCE’s Service Guarantee Program. Under SCE’s current SGP, SCE provides a $30 bill credit for each 24-hour period that a customer is without service. SCE reports annually to the PUC on credits paid to customers.

1. Related Legislation. AB 1800 (Hadley) requires an electric utility to post specified information relating to utility outage compensation claims on its Internet Web site. This bill is in this Committee’s Suspense file.

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

Date of Hearing: April 20, 2016

ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE

Mike Gatto, Chair

ABPCA Bill Id:AB 2381 (

Author:Roger Hernández) – As Amended Ver:April 11, 2016

SUBJECT: Electricity: power outages: bill credits

SUMMARY: Requires an electrical corporation to establish a utility service guarantee program to provide bill credits for customer that experience power outages for over 24 hours. Specifically, this bill:

1. Requires an electrical corporation to establish a utility service guarantee program, by July 1, 2017, that do the following:
   1. Automatically provide each customer that experiences an outage for a continuous 24 hour period a $30 bill credit for each 24-hour period that the customer was without power.
   2. Require the California Public Utilities Commission (CPUC), to adjust the amount of the bill credit by the annual percentage increase in the Consumer Price Index (CPI) for the prior calendar year, beginning January 1, 2018.
2. Requires that any expense incurred by the program to be borne exclusively by the shareholders of the electrical corporation and prohibits such expenses to be recoverable either directly or indirectly in rates.
3. Requires an electrical corporation to engage in public outreach and educate the public about the program to increase public awareness.
4. Requires an electrical corporation to report to the Legislature on the number of customers provided a bill credit and the total amount credited to customers through the program, on or before July 2, 2018, and annually thereafter.
5. Requires an electrical corporation that, on or before January 1, 2017, has a program that provides a bill credit to each customer that experiences an outage to update its program as specified.
6. Specifies that the program requirement does not apply to outages under any of the following circumstances:
   1. The outage is planned and for maintenance.
   2. The outage is caused by a moderate, severe, or catastrophic storm condition.
   3. The facilities, lines, equipment, or other property necessary to restore power are inaccessible or are deemed unsafe to access.
   4. The outage occurs during a declared emergency event or cause related to force majeure.
   5. The affected service location is vacant.

EXISTING LAW:

1. Gives the CPUC regulatory authority over public utilities, including electrical corporations and gas corporations, as defined. (Public Utilities Code Sections 218 and 222, et. seq.)
2. Defines an "electrical corporation" to include every corporation or person owning, controlling, operating, or managing any electric plant for compensation within the state, as specified. (Public Utilities Code Section 218)
3. Defines "local publicly owned electric utility" as a municipality or municipal corporation operating as a "public utility" furnishing electric service, a municipal utility district furnishing electric service, a public utility district furnishing electric service, an irrigation district furnishing electric service, or a joint powers authority that includes one or more of specified agencies and that owns generation or transmission facilities, or furnishes electric services over its own or its member's electric distribution system. (Public Utilities Code Section 224.3)
4. Requires the CPUC to adopt inspection, maintenance, repair, and replacement standards for distribution systems of electrical corporations, as well as standards for operation, reliability, and safety during periods of emergency and disaster, as specified. (Public Utilities Code Section 364)
5. Requires the CPUC to establish standards for disaster and emergency preparedness plans, as specified. (Public Utilities Code Section 768.6)

FISCAL EFFECT: Unknown.

COMMENTS:

1. Author’s Statement: "There have been several recent power outages that have left utility customers without power for extended periods of time. Whether in Long Beach, or El Monte in my Assembly District, individuals should not have to suffer due to extended power outages. Despite existing programs to reimburse customers for their losses, residents have told me that these programs are difficult to access, and that they cannot always document their losses. However, two utility companies have existing automatic bill credit programs that offer some relief. This bill builds off of the success of these programs, and allows the state to codify and enforce these programs."
2. Background: Power outages are not an uncommon occurrence and can sometimes last a few hours to a few days. Such outages not only create an inconvenience for residents and businesses, but can also cause health and safety issues, as well as economic damages to businesses and communities. Under current law, the CPUC is required to adopt inspection, maintenance, repair, and replacement standards for electric distribution systems, as well as standards for operation, reliability, and safety during periods of emergency and disaster. The CPUC is also required to establish standards for disaster and emergency preparedness plans.
3. Major power outages in Southern California: There have been several major power outages that have affected the Southern California area, including the Southwest Power Outage and the Southern California Windstorm Power Outages in 2011, and the Long Beach power outages in 2015. On September 8, 2011, work being performed on a transmission line in Arizona, caused a power outage that affected approximately 1.4 million electricity customers in California, Arizona, and Mexico. Power was fully restored within 12 hours. In addition, from November 30 to December 1, 2011, hurricane force winds caused a power outage thought the Southern California region that affected approximately 430,000 electric customers in Southern California Edison's (SCE) territory. Power was not fully restored until December 8, 2011. More recently, fires in underground electric vaults caused two power outages that affected thousands of residents and business in the downtown Long Beach area. The two separate fires on July 15, 2015, and July 30, 2015 took out power for Long Beach residents for several days.
4. Outages and claims: In most cases, electric utilities provide businesses and residents reimbursements if they suffered a loss or damage due to a service interruption as a result of the utility. Utilities judge each claim individually. For example, according to SCE's Web site, SCE evaluates each claim individually, and determines: a) if loses occurred due to their negligence; b) how the incident happened; c) the extent of damages; and d) what the law considers fair compensation. Customers must submit proof and documentation to verify their claims along with the application.
5. Existing Programs: Currently, both Pacific Gas and Electric (PG&E) and SCE have established service guarantee programs. PG&E's service guarantee program provides a $30 credit if it fails to meet its service guarantees, including guarantees related to electric service disruptions and restoration. PG&E's electric service disruption guarantee guarantees that it will respond to customer calls reporting electric service interruptions within four hours by restoring service or by informing the customer when service is expected to be restored, or it will automatically credit the customer $30. PG&E's electric service restoration guarantee guarantees that PG&E will restore electric service within 24 hours, or it will provide the customer a $30 credit. Such guarantees do not apply in certain circumstances such as when access to an area is not available, during serious emergencies and/or storm conditions, planned service interruptions, etc.

SCE's service guarantee program also provides a $30 credit if it fails to meet its guarantees, including guarantees that electric service will be restored within 24 hours or a $30 credit will be applied, with additional credits applied for each succeeding 24 hour period without service. General exceptions to SCE's guarantee also include denial of access by public authority, maintenance outages, storm conditions, emergency events, etc. The San Diego Gas & Electric Company currently does not have a service guarantee program.

This bill requires an electrical corporation to establish a utility service guarantee program, by July 1, 2017, that automatically provides each customer that experiences an outage for a continuous 24 hour period a $30 bill credit for each 24-hour period that the customer was without power. This bill requires an electrical corporation that, on or before January 1, 2017, has an existing program that provides a bill credit to each customer that experiences an outage to update its program as specified.

The author may wish to consider an amendment to delay implementation for those electrical corporations currently without a program until 2018.

1. Consumer Price Index (CPI): The CPI is a measure of the average change in prices over time consumers pay for goods and services. Beginning January 1, 2018, this bill requires the CPUC, to adjust the amount of the bill credit by the annual percentage increase in the CPI for the prior calendar year. However, unlike wages, in which the purchasing power of a worker increases or decreases as the price of goods and services fluctuate with the economy, the credit proposed under this bill arguable is more of a penalty in which the utility pays a fee to the customer for its failure to uphold certain service guarantees.

The author may wish to consider an amendment striking the requirement for the CPUC to adjust the credit by the annual percentage increase in the CPI.

1. Suggested Amendments:

Amend Section 740.13 as follows:

740.13. (a) An electrical corporation, on or before July 1, 2018 2017, shall establish a utility service guarantee program. The program shall do all of the following:

(1) Automatically provide each customer that experiences an outage for a continuous 24-hour period a thirty-dollar ($30) bill credit for each 24-hour period that the customer was without power.

(2) The commission shall, beginning January 1, 2018, adjust the amount of the bill credit by the annual percentage increase in the Consumer Price Index for the prior calendar year.

740.13 (d) An electrical corporation, on or before July 2, 2019 2018, and annually thereafter, shall report to the Legislature on the number of customers provided a bill credit and the total amount credited to customers through this program.

1. Related Legislation:

AB 1800 (Hadley) 2016: Requires an electric utility to post specified information relating to utility outage compensation claims on its Internet Web site. Pending in the Assembly Utilities and Commerce Committee.

REGISTERED SUPPORT / OPPOSITION:

Support

None on file.

Opposition

None on file.

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