Water corporations: demand elasticity: rates and surcharges.

Plain English Breakdown

The bill summary text does not provide details on enforcement mechanisms or consequences for violations by water corporations.

Water Corporations: Fair Pricing

The bill requires the Public Utilities Commission to prevent water corporations from overcharging or undercharging customers due to errors in estimating demand elasticity and sales, and limits any changes to rates or surcharges that could result in extra revenue.

What This Bill Does

• Requires the Public Utilities Commission to ensure that errors in estimates of demand elasticity or sales do not lead to material overcollections or undercollections by water corporations.
• Limits any rate increases or new charges for water services so they do not generate more revenue than what was approved by the commission.

Who It Names or Affects

• Water corporations in California
• Customers of water services

Terms To Know

Public Utilities Commission

A government agency that regulates companies providing electricity, gas, and water to the public.

Demand elasticity

How much people's use of a product changes when its price changes.

Limits and Unknowns

• The bill does not specify how the Public Utilities Commission will enforce these rules.
• It is unclear what happens if water corporations make mistakes in estimating demand elasticity or sales.

Official Summary Text

SB 473, as amended, Padilla.
Water corporations: demand
elasticity.
elasticity: rates and surcharges.
The California Constitution and the Public Utilities Act vest the Public Utilities Commission with regulatory authority over electrical corporations and water corporations. The act requires the commission to ensure that errors in estimates of demand elasticity or sales do not result in material overcollections or undercollections of electrical corporations.
This bill would additionally require the commission to ensure that those errors do not result in material overcollections or undercollections of water corporations.
Existing law requires the commission, in establishing rates for water service, to consider separate charges for costs associated with customer service, facilities, variable operating costs, or other
components of the water service provided to water users. Existing law requires the commission to consider, and authorizes the commission to authorize, a water corporation to establish programs, including rate designs, for achieving conservation of water and recovering the cost of these programs through the rates, as provided.
This bill would, for purposes of the above-described rates for water service, require that any changes to rates or implementation of surcharges in accordance with the above-described requirement on the commission to ensure errors in estimates of demand elasticity or sales do not result in material overcollections or undercollections of water corporations do not result in revenues above those approved by the commission.
Under existing law, a
violation of the act or any order, decision, rule, direction, demand, or requirement of the commission is a crime.
Because the above
requirement
requirements
would be part of the act and a violation of a commission action implementing this bill’s 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.

Current Bill Text

Download Bill PDF