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AB-1058 Water corporations: bill payment options.(2021-2022)

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Date Published: 04/12/2021 09:00 PM
AB1058:v98#DOCUMENT

Amended  IN  Assembly  April 12, 2021

CALIFORNIA LEGISLATURE— 2021–2022 REGULAR SESSION

Assembly Bill
No. 1058


Introduced by Assembly Member Cristina Garcia

February 18, 2021


An act to amend Sections 755 and 755.5 and 915 of the Public Utilities Code, relating to water service.


LEGISLATIVE COUNSEL'S DIGEST


AB 1058, as amended, Cristina Garcia. Water corporations: bill payment pilot program. options.
Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including electrical, gas, and water corporations. Existing law authorizes the commission to fix the rates and charges for every public utility, and requires that those rates and charges be just and reasonable. Existing law authorizes an electrical, gas, or water corporation to offer credit card and debit card bill payment options, if approved by the commission, and, upon approval, authorizes an electrical, gas, or water corporation to recover, through an individual customer transaction fee, reasonable transaction costs incurred by the electrical, gas, or water corporation from those customers that choose those methods of payment. Existing law includes statements of legislative intent relative to electrical, gas, and water corporations offering customers the option to pay by credit card or debit card.
This bill would delete water corporations from the above-described authorization to offer credit card and debit card bill payment options, the associated cost recovery provisions, and the related statements of legislative intent, thereby limiting those provisions to electrical and gas corporations.
Existing law, until January 1, 2022, authorizes a water corporation with more than 10,000 service connections to seek commission approval, through its general rate case application, to operate a pilot program designed to evaluate customer interest in, and utilization of, bill payment options, including, but not limited to, credit card, debit card, and prepaid card bill payment options, and to assess the cost-effectiveness of, and customer interests served by, customer access to those bill payment options. Existing law limits the duration of a pilot program to the duration of the water corporation’s rate case cycle. Existing law requires the commission to allow a water corporation to recover the reasonable expenses incurred by the water corporation in providing its customers with these bill payment options, but allows water corporations to not impose a transaction fee on its customers for using these bill payment options.
This bill would extend the pilot program until January 1, 2027. The bill would repeal the provision that limits the duration of a pilot program to the duration of the water corporation’s rate case cycle. delete the time-limited pilot program provisions, require the commission to authorize a water corporation, without limitation as to the number of customers it serves and unrelated to its rate case cycle, to recover the reasonable expenses incurred by the water corporation in providing bill payment options to its customers, and not require the water corporation to impose a transaction fee on its customers.
Existing law prohibits the costs of a pilot program from being collected from customers who participate in the California Alternate Rates for Energy (CARE) program or the Customer Assistance Program (CAP) for low-income water ratepayers. The CARE and CAP programs have the same eligibility criteria and method of qualification.

This bill would repeal the prohibition on the costs of a pilot program being recovered from customers who participate in the CARE program, while retaining the prohibition on collecting those costs from participants in the CAP program.

Existing law requires the commission, in consultation with the Low-Income Oversight Board, to submit a report relative to the pilot program to specified committees of the Legislature by July 1, 2020.

This bill would require the commission, in consultation with the board, to submit another report relative to the pilot program to specified committees of the Legislature by July 1, 2025.

This bill would prohibit a water corporation from recovering the costs of offering the bill payment options to its customers from participants in the CAP program.
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 the provisions of this bill would be a part of the act and because a violation of an order or decision of the commission implementing its requirements would be a crime, the bill would impose a state-mandated local program by creating a new crime.
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   Local Program: YES  

The people of the State of California do enact as follows:


SECTION 1.

 Section 755 of the Public Utilities Code is amended to read:

755.
 (a) It is the intent of the Legislature that:
(1) An electrical, gas, or water electrical or gas corporation that offers customers credit card or debit card payment options, option may recover the reasonable expenses incurred by the electrical, gas, or water electrical or gas corporation for providing the customers the option of paying their bills by credit card or debit card.
(2) Only the customers that choose to use these payment options incur the additional charge and that no portion of the expense is shifted to customers that do not choose to pay a bill by credit card or debit card, unless and until the commission determines that the savings to ratepayers exceeds the net cost of accepting those cards.
(3) The acceptance of credit cards or debit cards neither increases nor decreases the profitability of the electrical, gas, or water electrical or gas corporation.
(b) An electrical, gas, or water electrical or gas corporation may offer credit card and debit card bill payment options, if approved by the commission. The electrical, gas, or water electrical or gas corporation may recover reasonable transaction costs incurred by the electrical, gas, or water electrical or gas corporation only from those customers that choose to pay by those payment options.
(c) The commission shall determine through existing regulatory mechanisms the reasonableness of transaction costs charged to customers that choose to pay an electrical, gas, or water electrical or gas corporation by a credit card or debit card bill payment option pursuant to this section. The commission shall determine how any associated costs or potential savings as a result of those customers paying by the credit card or debit card payment option shall be passed on to electrical, gas, or water electrical or gas corporation customers. In determining how these savings or costs are passed on to customers, the commission shall do the following:
(1) The transaction costs that are passed on to customers pursuant to subdivision (b) shall be offset by any savings in transaction costs the electrical, gas, or water electrical or gas corporation derives as a result of those customers paying by credit card and debit card.
(2) If the commission determines that the use of credit cards and debit cards results in no net cost to the electrical, gas, or water electrical or gas corporation, there shall be no individual customer transaction fee as provided for in subdivision (b).
(3) If the commission determines that the savings to the electrical, gas, or water electrical or gas corporation exceeds the costs to the electrical, gas, or water electrical or gas corporation, the net savings shall be passed on to electrical, gas, or water electrical or gas corporation customers.

SECTION 1. SEC. 2.

 Section 755.5 of the Public Utilities Code is amended to read:
755.5.

(a)A water corporation with more than 10,000 service connections that seeks to operate a pilot program designed to evaluate customer interest in, and utilization of, bill payment options, including, but not limited to, credit card, debit card, and prepaid card bill payment options, and to assess the cost-effectiveness of, and customer interests served by, customer access to those bill payment options, shall do so by requesting commission approval through its general rate case application.

(b)Notwithstanding Section 755, the

755.5.
 (a) The commission shall allow a water corporation to recover the reasonable expenses incurred by the water corporation in providing to its customers bill payment options pursuant to subdivision (a) options, including credit card, debit card, and prepaid card bill payment options, and shall not require the water corporation to impose a transaction fee on its customers.

(c)

(b) The costs of a pilot program adopted the bill payment options undertaken pursuant to subdivision (a) shall not be recovered from customers participating in a water rate relief program for low-income ratepayers established pursuant to Section 739.8.

(d)The commission shall require a water corporation that is operating a pilot program to notify its customers that the water corporation is participating in a pilot program and that the pilot program may not continue, pending an assessment of the costs and benefits of the pilot program to customers.

(e)

(c) The commission shall ensure that accepting bill payment options pursuant to subdivision (a) neither increases nor decreases the rate of return of the water corporation.

(f)This section shall remain in effect only until January 1, 2027, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2027, deletes or extends that date.

SEC. 2.Section 915 of the Public Utilities Code is amended to read:
915.

(a)By July 1, 2020, and again by July 1, 2025, the commission, in consultation with the Low-Income Oversight Board established pursuant to Section 382.1, shall submit to the Assembly Committee on Utilities and Energy and the Senate Committee on Energy, Utilities and Communications a report on the pilot programs operated by water corporations pursuant to Section 755.5 that includes an assessment of the use of credit cards by low-income customers to avoid service disconnections, an assessment of the impact of the use of credit cards for customer bills on household debt burden, and an assessment of data, considered on an aggregated basis, regarding customer utilization and the cost-effectiveness of the bill payment options. Based on these assessments and an assessment of the customers’ interests served by providing these bill payment options, the report shall evaluate the usefulness of the individual customer transaction fee required by Section 755, and include a recommendation regarding individual customer transaction fees for credit card, debit card, and prepaid card payments accepted by water corporations.

(b)This section shall remain in effect only until January 1, 2029, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2029, deletes or extends that date.

SEC. 3.

 No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.