1997 AGN NOV 12 I01 - Laserfiche WebLink

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CITY OF COLTON INTEROFFICE MEMORANDUM TO: Len Wood, Interim City Manager APPROVAL: Thomas K. Clarke, Utility Director FROM: Timothy C. Trewyn, P.E., Assistant Electric Utility Director SUBJECT: Executive Summary on Electric Utility Restructuring DATE: Monday, October 20, 1997 Quotation from California Municipal. Utilities Association: "AB 1890 is California's comprehensive electric [utility] restructuring legislation which: (1) passed the California Legislature on a unanimous vote of both houses on August 30, 1996; (2) was signed into law on September 23, 1996; and (3) because it was an urgency statute, became effective immediately. The legislation contains only two real mandates for publicly owned utilities. The first mandate is a requirement that electric bills of city owned utilities must indicate at least once a year how much of the bill is being transferred to the City general fund. The second mandate, which applies to all publicly owned utilities, is.a requirement to collect a separate surcharge to be used for "public benefits" programs in four categories: (1) Cost- effective demand-side management services to promote energy -efficiency and energy . conservation; (2) New investments in renewable energy technology; (3) Research, development and demonstration; and (4) Services provided for low income electricity customers. . The expenditure of those funds is entirely in the discretion of locally elected governing bodies so long as the expenditures fit within the four categories included in AB 1890. AB 1890 also creates the possibility for publicly owned utilities to allow their customers to purchase energy from a source other than the publicly owned utility. This effectively creates an energy "direct access" market. Publicly owned utilities would continue to provide the physical distribution system to deliver energy to each customer, much like our public roads are driven on by private vehicles. Customers who chose such a form of service would receive an "unbundled" electricity bill. The various line items would appear in a form similar to the following (rates given as an example only, but are approximately correct) Distribution Charge Energy Charge Transmission Charge Competition Transition Charge State Public Benefit Charge City Public Benefit Charges Public Safety Tax Total Bill (500KWH x 3.5cents/KWH) (500KWH x 2.4cents/KWH) (500KWH x 1.0cents/KWH) (500KWH x 3.9cents/KWH) (500KWH X 0.29cents/KWH) \\server\utim\council\restructexecutivesummry.doc $17.50 $12.00 $ 5.00 $19.50 $ 1.45 1.03 $56.48