South San Francisco, CA October 4, 2017 Submitted by Leslie Guevarra, Office of Senator Hill
SB 711 was Prompted by Consumers’ Pleas for Help After Being Hit by Soaring Energy Bills
SACRAMENTO – Governor Brown signed legislation today by Senator Jerry Hill to address the wild fluctuations in energy bills experienced by many utility customers this past winter and help consumers better understand how their bills are calculated.
“Californians should not have to fear what their next utility bill may be,” said Senator Hill, D-San Mateo and Santa Clara Counties. “Senate Bill 711 reduces the likelihood of spikes in residential energy bills during the winter by bringing more fairness and transparency to the way that bills are calculated.”
A sharp increase in the energy bills this past winter for many PG&E customers prompted complaints to the utility and the California Public Utilities Commission. Customers also turned to consumer-watch news programs for help and called Senator Hill’s office, prompting him to take a closer look at the problem.
In spring, based on reports compiled by his staff, Senator Hill introduced SB 711 to ensure that during winter months 60 to 70 percent of the energy bill for the average residential customer is covered by utilities’ lower-priced, baseline rate for usage – and that the calculation of the baseline for winter months takes variations in consumption due to the climate and season into account. In contrast, the reports compiled by the senator’s staff found that PG&E, for example, had calculated its baseline as roughly 70 percent of average use by customers across the winter – a method that did not take into account that energy consumption varies month to month during the winter depending on the temperature.
“PG&E’s pricing allowed for too much low-cost baseline energy usage, known as Tier 1, when customers didn’t need it, and not enough low-cost usage during December and January, which led to skyrocketing bills for customers who used more energy during those colder months,” Senator Hill said.
Specifically, SB 711 directs the CPUC to better align baseline allocations for residential customers with statutory requirements and says “the commission shall review and revise baseline quantities as average consumption patterns change in order to maintain these ratios and may do so during the rate case or other ratesetting proceeding of a gas corporation or electrical corporation.”
SB 711 also requires that the methodologies utilities use to estimate residential customers’ bills be simple, transparent and cost-effective, in addition to being posted on their websites.
The new law takes effect January 1.