BILL NUMBER: AB 1525	INTRODUCED
	BILL TEXT


INTRODUCED BY   Committee on Utilities and Commerce (Assembly Members
Rendon (Chair), Achadjian, Bonilla, Burke, Eggman, Cristina Garcia,
Roger Hernández, Quirk, Santiago, and Williams)

                        MARCH 16, 2015

   An act to repeal Section 397 of the Public Utilities Code,
relating to electricity.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1525, as introduced, Committee on Utilities and Commerce.
Electrical restructuring.
   Existing law, enacted as part of electrical restructuring,
required the Public Utilities Commission to authorize an electrical
corporation meeting specified conditions to implement a rate cap
mechanism that included a fuel price index mechanism to ensure the
continued safe and reliable provision of electric service during the
transition to competition and to limit the effect of fuel price
volatility in electric rates paid by consumers. This requirement
became inoperative on December 31, 2001.
   This bill would repeal the above-described requirement.
   Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 397 of the Public Utilities Code is repealed.

   397.  (a) Notwithstanding subdivision (a) of Section 368, to
ensure the continued safe and reliable provision of electric service
during the transition to competition, and to limit the effect of fuel
price volatility in electric rates paid by California consumers, it
is in the public interest to allow an electrical corporation which is
also a gas corporation and served fewer than four million customers
as of December 20, 1995, to file with the commission a rate cap
mechanism which shall include a Fuel Price Index Mechanism requiring
limited adjustments in an electrical corporation's authorized System
Average Rate in effect on June 10, 1996, to reflect price changes in
the fuel market. The commission shall authorize an electrical
corporation to implement a rate cap mechanism which includes a Fuel
Price Index Mechanism provided the following criteria are met:
   (1) The Fuel Price Index Mechanism shall be based on the Southern
California Border Index price for natural gas as published
periodically in Natural Gas Intelligence Magazine. The "Starting
Point" of the Fuel Price Index Mechanism shall be defined as the
California Border Index price as published in Natural Gas
Intelligence for January 1, 1996.
   (2) The Fuel Price Index Mechanism shall include a "deadband"
defined as a price range for natural gas that is any price up to 10
percent higher, or lower, than the Starting Point.
   (3) The electrical corporation shall not file for a change in its
authorized System Average Rate unless the California Border Index
price, on a 12-month, rolling average basis, is outside the deadband.
If the published California Border Index is outside of the deadband,
the electrical corporation shall increase, or decrease, its
authorized System Average Rate by an amount equal to the product of
25 percent multiplied by the percentage by which the 12-month rolling
average natural gas price is higher, or lower, than the deadband.
   (4) In no case shall an electrical corporation's authorized System
Average Rate under the Fuel Price Index Mechanism exceed the average
of the authorized system average rates for the two largest
electrical corporations as of June 10, 1996.
   (5) This section shall become inoperative on December 31, 2001.