Calif. Public Utilities Code §§382, 399.15, 739.1, 2827, 2827.10, 2827.1, 769, 2827.1, 739.9, and 745
Added and amended by A.B. 327
Effective date: January 1, 2014
Energy rate changes
The ban on energy rate increases in California has been lifted.
Energy rate increases authorized or mandated by the California Public Utilities Commission (PUC) are subject to a phase-in schedule relative to the rates in effect before January 1, 2014. For residential customers, utilities are required to continue offering rates that default to pricing set within at least two tiers.
The first tier is to price electricity usage at or above a baseline quantity set according to statute. The baseline quantity takes into account seasonal usage and average consumption in different climates throughout the state. Subsequent tiers are adjusted for increasing amounts of energy use, to be determined by each utility.
Additionally, the PUC may also adopt new monthly charges or expand existing fixed charges to recover a reasonable portion of the costs of providing service to residential customers. Fixed charge increases are capped for low-income residential utility users.
Time-variant pricing
Beginning January 1, 2018, utilities may institute time-of-use pricing for residential customers. Time-of-use pricing imposes different energy rates depending on the time of day the energy is used. This type of pricing approximates the strain on the utility’s system during peak and off-peak hours.
Time-of-use pricing may be authorized as long as:
- pricing does not apply to customers who receive special services, such as customers who receive a medical baseline allowance and senior and dependent customers who require bill notifications be sent to a designated third-party;
- pricing does not cause unreasonable hardship for senior citizens or economically vulnerable customers in hot climates;
- pricing is set for at least the following five years;
- pricing applies to residential customers only if they have been provided with at least one year of interval usage data from an advanced meter, customer education and at least one year of bill protection during which the total amount paid by the customer is not to exceed the amount paid under their previous rate schedule;
- residential customers are provided with a summary of available tariff options with a calculation of expected annual bill impacts, to be delivered at least once per year using a reasonable delivery method chosen by the customer; and
- residential customers are given the option to reject a time-of-use rate schedule at no additional charge.
Standard rates paid to customers who generate renewable energy
Electrical corporations with more than 100,000 service connections in California are required to set and pay a standard tariff to customers who generate energy from a renewable source, e.g., solar energy. This program is known as net energy metering.
Standard tariffs set by the electrical corporations are to be available until the earlier of:
- the corporation reaching its net energy metering program limit; or
- July 1, 2017.
The PUC will establish a separate standard tariff by December 31, 2015. This standard tariff is to be used by electrical corporations on the earlier of July 1, 2017 or the exhaustion of their respective net energy metering program limits. The goal of the PUC standard tariff is to encourage the sustainable growth of renewable energy generation after the expiration of each electrical corporation’s net energy metering program.
Editor’s note — This bill is intended to offset the disproportionately elevated rates residential energy customers in upper usage tiers paid during the energy crisis. The adjustments phase in higher rates while still ensuring low-income and otherwise vulnerable customers are not overburdened.
