ACTION:
____________________________
Clerk/Secretary
Department: City Manager Item No: D5
Prepared by: Imelda M. Huerta, Assistant City Manager Meeting Date: February 27, 2024 Approved by: John Conley, City Manager Agenda Location: Discussion SUBJECT: AB 1999 (IRWIN) SUPPORT RESOLUTION
RECOMMENDATION: Adopt City Council Resolution No. 2024- , supporting California Assembly Bill 1999.
PRIOR ACTION: On October 24, 2023, adopted City Council Resolution No. 2023-186, opposing the fixed energy charges authorized in Assembly Bill 205 Energy (2021-2022) (Vote: 5-0).
STATEMENT ON THE SUBJECT: Councilmember O’Donnell requested the City Manager place a discussion item on an upcoming agenda to discuss a Resolution in support of California Assembly Bill (AB) 1999 (Irwin) Electricity: fixed charges.
Existing law vests the Public Utilities Commission with regulatory authority over public utilities, including electrical corporations. Existing law authorizes the commission to adopt new, or expand existing, fixed charges, as defined, for the purpose of collecting a reasonable portion of the fixed costs of providing electrical service to residential customers. Under existing law, the commission may authorize fixed charges for any rate schedule applicable to a residential customer account. Existing law requires the commission, no later than July 1, 2024, to authorize a fixed charge for default residential rates. Existing law requires these fixed charges to be established on an income-graduated basis, with no fewer than 3 income thresholds, so that low-income ratepayers in each baseline territory would realize a lower average monthly bill without making any changes in usage. This bill would repeal the provisions described in the preceding paragraph.
The bill would instead permit the commission to authorize fixed charges that, as of January 1, 2015, do not exceed $5 per residential customer account per month for low-income customers enrolled in the California Alternate Rates for Energy (CARE) program and that do not exceed $10 per residential customer account per month for customers not enrolled in the CARE program. The bill would authorize these maximum allowable fixed charges to be adjusted by no more than the annual percentage increase in the Consumer Price Index for the prior calendar year, beginning January 1, 2016. This bill contains other related provisions and other existing laws. (Based on text date 1/30/2024) FISCAL IMPACT: There is no direct fiscal impact with this recommendation.
EXHIBITS:
1.City Council Resolution No. 2024- , supporting California Assembly Bill 1999
2.AB 1999 (Irwin) bill text
AGENDA
REPORT
CITY COUNCIL
COMMUNITY DEVELOPMENT COMMISSION
SUCCESSOR AGENCY
BUENA SANITATION DISTRICT
JOINT POWERS FINANCING AUTHORITY
Approved above recommendation, adopted City Council Resolution No. 2024-27.
Vote: 3-1-1 (Mayor Franklin opposed; Contreras abstained.
00029213 7
RESOLUTION NO. 2024-
A RESOLUTION OF THE CITY COUNCIL OF THE CHARTERED CITY OF VISTA, CALIFORNIA, SUPPORTING CALIFORNIA ASSEMBLY BILL 1999 The City Council of the City of Vista does resolve as follows:
1. Findings. The City Council hereby finds and declares the following:
A. On October 24, 2023, adopted City Council Resolution No. 2023-186, opposing the fixed energy charges authorized in Assembly Bill 205 Energy (2021-2022) (Vote: 5-0).
B. AB 1999 was introduced by by Assembly Members Irwin, Addis, Berman, Connolly, Muratsuchi, Papan, Pellerin, Quirk-Silva, Ting, Ward, and Weber on January 30, 2024. Principal coauthors include Assembly Member Bauer-Kahan and Senator Wiener, and coauthors are listed as Assembly Members Boerner, Bonta, Friedman, Lee, Low, and Maienschein, as well as Senator Blakespear.
B. Existing law vests the Public Utilities Commission (PUC) with regulatory authority over public utilities, including electrical corporations and authorizes the commission to adopt new, or expand existing, fixed charges, as defined, for the purpose of collecting a reasonable portion of the fixed costs of providing electrical service to residential customers.
C. Under existing law, the commission may authorize fixed charges for any rate schedule applicable to a residential customer account and requires the commission, no later than July 1, 2024, to authorize a fixed charge for default residential rates. Existing law also requires these fixed charges to be established on an income-graduated basis, with no fewer than 3 income thresholds, so that low-income ratepayers in each baseline territory would realize a lower average monthly bill without making any changes in usage.
D. AB 1999 would repeal the provisions described in the preceding paragraph. The bill would instead permit the commission to authorize fixed charges that, as of January 1, 2015, do not exceed $5 per residential customer account per month for low-income customers enrolled in the California Alternate Rates for Energy (CARE) program and that do not exceed $10 per residential customer account per month for customers not enrolled in the CARE program. The bill would authorize these maximum allowable fixed charges to be adjusted by no more than the annual percentage increase in the Consumer Price Index for the prior calendar year, beginning January 1, 2016.
E. 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 certain provisions of this bill would be a part of the act and therefore a violation of the bill’s requirements or of a commission action implementing its requirements would be a crime, the bill would impose a state-mandated local program.
F. 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.
G. AB 1999 would provide that no reimbursement is required by this act for a specified reason.
02/27/2024 D5 Page 2 of 7
EXHIBIT 1
RESOLUTION NO. 2024-
CITY COUNCIL OF THE CHARTERED CITY OF VISTA
PAGE 2
00029213 7EXH1 - 2024 Resolution template -COV (00029213-8xBECB1) - AB 1999 S.docx H. Cal Cities current position is to take this bill to its Policy Committee.
2. Action.
A. The City Council supports AB 1999 and urges the California Legislature to pass this bill.
B. The City Council further resolves that the City Manager, or designee, continue to advocate in support of AB 1999.
3. Adoption. PASSED AND ADOPTED at a meeting of the City Council of the City of Vista held on February 27, 2024, by the following vote:
AYES:
NOES:
ABSTAIN:
APPROVED AS TO FORM:
WALTER CHUNG, CITY ATTORNEY
By:
APPROVED
Walter C. Chung
20240220083729
JOHN FRANKLIN, MAYOR
ATTEST:
KATHY VALDEZ, CITY CLERK
By:
02/27/2024 D5 Page 3 of 7
california legislature—2023–24 regular session
ASSEMBLY BILL No. 1999
Introduced by Assembly Members Irwin, Addis, Berman, Connolly, Muratsuchi, Papan, Pellerin, Quirk-Silva, Ting, Ward, and Weber
(Principal coauthor: Assembly Member Bauer-Kahan)
(Principal coauthor: Senator Wiener)
(Coauthors: Assembly Members Boerner, Bonta, Friedman, Lee, Low, and Maienschein)
(Coauthor: Senator Blakespear)
January 30, 2024
An act to amend Section 739.9 of the Public Utilities Code, relating to electricity.
legislative counsel’s digest
AB 1999, as introduced, Irwin. Electricity: fixed charges.
Existing law vests the Public Utilities Commission with regulatory authority over public utilities, including electrical corporations. Existing law authorizes the commission to adopt new, or expand existing, fixed charges, as defined, for the purpose of collecting a reasonable portion of the fixed costs of providing electrical service to residential customers.
Under existing law, the commission may authorize fixed charges for any rate schedule applicable to a residential customer account. Existing law requires the commission, no later than July 1, 2024, to authorize a fixed charge for default residential rates. Existing law requires these fixed charges to be established on an income-graduated basis, with no fewer than 3 income thresholds, so that low-income ratepayers in each baseline territory would realize a lower average monthly bill without making any changes in usage.
Corrected 1-31-24—See last page.99
02/27/2024 D5 Page 4 of 7
EXHIBIT 2
This bill would repeal the provisions described in the preceding paragraph. The bill would instead permit the commission to authorize fixed charges that, as of January 1, 2015, do not exceed $5 per residential customer account per month for low-income customers enrolled in the California Alternate Rates for Energy (CARE) program and that do not exceed $10 per residential customer account per month for customers not enrolled in the CARE program. The bill would authorize these maximum allowable fixed charges to be adjusted by no more than the annual percentage increase in the Consumer Price Index for the prior calendar year, beginning January 1, 2016.
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 certain provisions of this bill would be a part of the act and therefore a violation of the bill’s requirements or of a commission action implementing its requirements would be a crime, the bill would impose a state-mandated local program.
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.
Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.
The people of the State of California do enact as follows:
line 1 SECTION 1. Section 739.9 of the Public Utilities Code is line 2 amended to read:
line 3 739.9. (a) “Fixed charge” means any fixed customer charge, line 4 basic service fee, demand differentiated basic service fee, demand line 5 charge, or other charge not based on the volume of electricity line 6 consumed.
line 7 (b) Increases to electrical rates and charges in rate design line 8 proceedings, including any reduction in the California Alternate line 9 Rates for Energy (CARE) program discount, shall be reasonable line 10 and subject to a reasonable phase-in schedule relative to the rates line 11 and charges in effect before January 1, 2014.
99 — 2 — AB 1999
02/27/2024 D5 Page 5 of 7
line 1 (c) Consistent with the requirements of Section 739, the line 2 commission may modify the seasonal definitions and applicable line 3 percentage of average consumption for one or more climatic zones. line 4 (d) The commission may adopt new, or expand existing, fixed line 5 charges for the purpose of collecting a reasonable portion of the line 6 fixed costs of providing electrical service to residential customers. line 7 The commission shall ensure that any approved charges do all of line 8 the following:
line 9 (1) Reasonably reflect an appropriate portion of the different line 10 costs of serving small and large customers.
line 11 (2) Not unreasonably impair incentives for conservation, energy line 12 efficiency, and beneficial electrification and greenhouse gas line 13 emissions reduction.
line 14 (3) Are set at levels that do not overburden low-income line 15 customers.
line 16 (e) (1) For the purposes of this section and Section 739.1, the line 17 commission may authorize fixed charges for any rate schedule line 18 applicable to a residential customer account. The fixed charge shall line 19 be established on an income-graduated basis with no fewer than line 20 three income thresholds so that a low-income ratepayer in each line 21 baseline territory would realize a lower average monthly bill line 22 without making any changes in usage. The commission shall, no line 23 later than July 1, 2024, authorize a fixed charge for default line 24 residential rates.
line 25 (2) For purposes of this subdivision, “income-graduated” means line 26 that low-income customers pay a smaller fixed charge than line 27 high-income customers.
line 28 (e) For purposes of this section and Section 739.1, the line 29 commission may, beginning January 1, 2015, authorize fixed line 30 charges that do not exceed ten dollars ($10) per residential line 31 customer account per month for customers not enrolled in the line 32 CARE program and five dollars ($5) per residential customer line 33 account per month for customers enrolled in the CARE program. line 34 Beginning January 1, 2016, the maximum allowable fixed charge line 35 may be adjusted by no more than the annual percentage increase line 36 in the Consumer Price Index for the prior calendar year. This line 37 subdivision applies to any default rate schedule, at least one line 38 optional tiered rate schedule, and at least one optional time-variant line 39 rate schedule.
99 AB 1999 — 3 —
02/27/2024 D5 Page 6 of 7
line 1 (f) Notwithstanding the requirements of subdivision (d) of line 2 Section 739 and Section 739.7, the commission shall not apply line 3 the composite tier method to the treatment of any revenues resulting line 4 from any fixed charge adopted pursuant to this section. line 5 SEC. 2. No reimbursement is required by this act pursuant to line 6 Section 6 of Article XIIIB of the California Constitution because line 7 the only costs that may be incurred by a local agency or school line 8 district will be incurred because this act creates a new crime or line 9 infraction, eliminates a crime or infraction, or changes the penalty line 10 for a crime or infraction, within the meaning of Section 17556 of line 11 the Government Code, or changes the definition of a crime within line 12 the meaning of Section 6 of Article XIIIB of the California line 13 Constitution.
line 14
line 15
CORRECTIONS: line 16
Heading—Lines 4 and 7. line 17
line 18
O
99 — 4 — AB 1999
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February 26, 2024
City Council Secretary Doris Calvo
Vista City Council
200 Civic Center Drive
Vista, CA 92084
RE: Say No to Assembly Bill 1999 (AB 1999) Repeal to AB 205 Fixed Charge Dear Vista City Council,
On behalf of a broad coalition of labor unions and working-class families throughout California, we are writing to ask you to not support AB 1999 by City Council resolution. Our labor unions are firmly in support of an electric fixed charge because it will help our working members and other low-income families.
In 2022, the state legislature passed and Governor Newsom signed Assembly Bill 205 (AB 205), mandating the California Public Utilities Commission (CPUC) to change the way residential customers’ electric bills are structured. AB 205 and the resulting CPUC rulemaking are intended to support customers with greater transparency on their electric bills; lower the electric volumetric rate for all residential customers; ensure continued investments in the electric system to support reliability; and move towards a clean energy and carbon free future.
By implementing a fixed charge, we can bring financial relief to those who need it most, including the large percentage of laborers throughout Vista and its neighboring communities.
Doing so will bring San Diego’s working families – including many of our members who are struggling the most – the opportunity to start planning and saving, investing in their future.
However, a group of California state legislators are setting out to limit the benefits that AB 205 will bring to the state with AB 1999 – a repeal to the fixed charge mandate that supports the wealthy rather than the low-income families our coalition is working ferociously to support.
Choosing to support AB 1999 could lead to a deepened divide that leaves low-income families behind while paving the way for our future. In fact, we already see this divide as those who don’t have or can’t afford solar are subsidizing those that do—these low-income families are picking up the bill for the solar incentives enjoyed by the wealthy. We urge the Council to turn away from this legislation and focus on the current law that has the potential to reduce electric bills for families who need it most: AB 205.
With AB 205, the CPUC has an opportunity to make significant progress addressing these challenges. If designed effectively, a fixed charge will have several important benefits for California families, including:
1.Increasing greater price predictability – AB 205 supports a fixed charge to fund the operation and maintenance of the electric grid, which is not tied to energy consumption. This new policy
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will break out the current pricing structure and create a new line item on electric bills that is the same every month, making it easier for families to plan and save.
2. Reducing bills for low-income customer– AB 205 will help lower monthly electric bills for low-income customers, creating meaningful cost savings for our most vulnerable families, with additional savings opportunity as they electrify.
3. Increasing transparency for all customers – AB 205 would NOT result in additional profits for SDG&E. Instead, this approach restructures the way maintenance and operation of the grid is funded. Customers will be able to see what portion of their electric bill goes to grid upkeep costs and which portion goes to usage.
4. Modernizing a reliable grid – By implementing a modern and more equitable approach to paying for the electric grid infrastructure we all depend on, we will ensure that clean, safe and reliable energy is accessible to everyone and that the costs do not unfairly burden low-income customers.
We believe that AB 1999 favors the wealthy and will stall desperately needed rate reform for families who are struggling financially. We urge the City Council to vote in opposition to the bill and aim its support towards AB 205 which will ensure an equitable transition to California’s clean energy future. Thank you again for your consideration of our request.
Respectfully,
Nate Fairman
Business Manager IBEW LU 465
[email protected] Cell: (858)-531-9209
February 26, 2024
Vista City Council
c/o City Council Secretary Doris Calvo
200 Civic Center Drive
Vista, CA 92084
RE: ITEM #D5 - Say No to Assembly Bill 1999 (AB 1999) Repeal to AB 205 Fixed Charge
Dear Honorable Mayor and Vista City Council,
Our organization, which supports low-income families, is writing this on behalf of the Predictable Power Coalition, and we encourage you not to support AB 1999 by council resolution and instead support California families by advocating for a fair and just energy system consistent with our state’s values. Our organization is urging the California Public Utilities Commission (CPUC) to prioritize these important utility rate reforms.
Vulnerable families deserve greater predictability and lower monthly costs. That is why the Predictable Power Coalition is supporting state leaders’ efforts to modernize the way utilities structure electric bills and reduce costs for low-income families.
The fixed charge proposals submitted to the CPUC by Pacific Gas and Electric (PG&E), Southern California Edison (SCE), and San Diego Gas & Electric (SDG&E) are designed, by law, to help lower electricity bills for low-income households and support an equitable clean energy transition for everyone by implementing a fixed charge for the upkeep of the region’s electric grid. The nature of our organization’s work is to help families in need of support keep their families afloat, which is why we hold this effort with such high regard and, in turn, urge the Vista City Council to do the same.
In an attempt to hinder these efforts for California’s vulnerable communities, a number of California state legislators announced they were seeking to repeal the mandatory fixed charge through AB 1999. Rather than advocating for struggling families in our state, lawmakers are seeking to undo all that progress. By removing the proposed electric bill transparency and predictability provisions set to take effect, lawmakers are delaying potential financial reprieve for families struggling to make ends meet.
The Vista City Council has an opportunity to contribute to significant progress addressing rate reform and help for low-income families, so we encourage you to oppose AB 1999.
We urge you to support the call for greater electric bill predictability, lower rates and more transparency to support an equitable transition to our clean energy future – a critical effort that AB 1999 aims to revoke.
Sincerely,
Greg Anglea, CEO
Interfaith Community Services
Member of Predictable Power Coalition