SECTIONS 727-758 - California Statutes

PUBLIC UTILITIES CODE

SECTION 727-758

727. It is the policy of the state that the use of all waterways,
ports, and harbors of this state shall be encouraged, and to that end
the commission is directed in the establishment of rates for water
carriers applying to business moving between points within this state
to fix those rates at such a differential under the rates of
competing land carriers that the water carriers shall be able fairly
to compete for such business. In fixing the rates there shall be
taken into consideration quality and regularity of service and class
and speed of vessels.

727.5. (a) In establishing rates for water service, the commission
shall consider, and may establish, separate charges for costs
associated with customer service, facilities, variable operating
costs, including fixed and variable costs associated with supplying
the water, or other components of the water service provided to water
users.
(b) The commission shall consider, and may authorize, a water
corporation to assess a fee for future water service, or a
reservation charge for future water service, for persons or entities
occupying or owning property within the service territory of the
water corporation.
(c) The commission shall consider, and may authorize, a water
corporation to establish a balancing account, rate stabilization
fund, or other contingency fund, the purpose of which shall be the
long-term stabilization of water rates.
(d) The commission shall consider, and may 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.
(e) In establishing rates for recovery of the costs of used and
useful water plant, the commission may utilize a capital structure
and payback methodology that shall maintain the reliability of water
service, shall minimize the long-term cost to ratepayers, shall
provide equity between present and future ratepayers, and shall
afford the utility an opportunity to earn a reasonable return on its
used and useful investment, to attract capital for investment on
reasonable terms and to ensure the financial integrity of the
utility.

728. Whenever the commission, after a hearing, finds that the rates
or classifications, demanded, observed, charged, or collected by any
public utility for or in connection with any service, product, or
commodity, or the rules, practices, or contracts affecting such rates
or classifications are insufficient, unlawful, unjust, unreasonable,
discriminatory, or preferential, the commission shall determine and
fix, by order, the just, reasonable, or sufficient rates,
classifications, rules, practices, or contracts to be thereafter
observed and in force.
In determining and fixing rates for a telephone corporation
pursuant to this section or pursuant to Section 455, or in
determining whether or not a proposed rate increase is justified
pursuant to Section 454, the commission shall, among other things,
take into consideration any evidence offered concerning the quality
of the particular telephone corporation's services as compared with
that of telephone corporations in adjacent territory, and the
permissible rates for comparable service charged by telephone
corporations in adjacent territory.

728.1. (a) For purposes of this section, "plant held for future use
account" means account number 105 of the Uniform System of Accounts
Prescribed for Public Utilities and Licensees, as adopted by the
commission.
(b) The commission shall review the status of all property owned
by a gas or electrical corporation and held within the plant held for
future use account at least once every three years or during a
proceeding conducted pursuant to Section 728, for the purpose of
determining and fixing the rates of that gas or electrical
corporation, as determined by the commission.
(c) If a gas or electrical corporation sells property which was
carried within the plant held for future use account and which was
included in determining the rates of the corporation, the commission
shall determine what portion of any gains from the sale shall be
allocated to the customers of the corporation in a manner consistent
with the procedures specified in account number 105 of the Uniform
System of Accounts Prescribed for Public Utilities and Licensees. The
portion of the gains allocated to customers shall not be less than
the amount the corporation has recovered through rates for the
carrying costs and other expenses of the property during the period
it was carried in the plant held for future use, and shall not exceed
the gain on the sale, net of any tax, resulting from the sale.

728.2. (a) Except as provided in subdivision (b), the commission
shall have no jurisdiction or control over classified telephone
directories or commercial advertising included as part of the
corporation's alphabetical telephone directories, including the
charges for and the form and content of such advertising, except that
the commission shall investigate and consider revenues and expenses
with regard to the acceptance and publication of such advertising for
purposes of establishing rates for other services offered by
telephone corporations.
(b) If the commission determines, after a hearing, that any
federal action would impair its ability to investigate and consider
revenues and expenses with regard to the acceptance and publication
of telephone directory advertising for the purpose of establishing
rates for other services offered by any telephone corporation, the
commission shall have the jurisdiction to regulate commercial
advertising in alphabetical and classified directories of telephone
corporations, except as provided in this subdivision.
(1) The commission's jurisdiction to regulate commercial
advertising in alphabetical and classified directories of telephone
corporations under this subdivision shall be limited to the rates and
charges for commercial directory advertising, except that the
commission shall investigate and consider revenues and expenses of
telephone corporations related to that advertising for purposes of
establishing rates for other services offered by telephone
corporations.
(2) The commission shall also have no jurisdiction over the
following:
(i) The form and content of the advertising in alphabetical and
classified directories of telephone corporations.
(ii) The form and content of the directories in which that
advertising appears.
(iii) Directory advertising practices.
(iv) The determination of the geographic areas served by those
directories.
(v) Complaints by any corporation or person regarding directory
advertising.
(3) The commission, by its own motion or on petition of any
telephone corporation, may, after a hearing, issue an order
relinquishing the jurisdiction assumed under this subdivision, except
its jurisdiction to investigate and consider the revenues and
expenses specified in paragraph (1) if the commission determines that
relinquishing the jurisdiction will not affect its ability to
investigate and consider those revenues and expenses. As used in this
subdivision, "federal action" means the introduction of a bill in
Congress, an order of the Federal Communications Commission, or an
order or decision of any federal court which would prohibit state
regulatory agencies which have no jurisdiction over directory
advertising from considering revenues from this source for ratemaking
purposes.

728.3. (a) No telephone corporation operating within a service area
shall remove any public telephone unless it has posted on the public
telephone for not less than 30 days a notice, in a manner and form
approved by the commission, indicating that the public telephone is
to be removed and containing the appropriate telephone number of the
commission which a customer may call for further information.
(b) This section shall not apply when a public telephone is
removed for public safety or public nuisance purposes or at the
request of the owner or lessee of the property on which the public
telephone is located.

728.4. A telephone corporation shall list a telephone number as the
number for a facsimile machine in its alphabetical or classified
directory only if requested to do so by the subscriber.

728.5. (a) The commission may establish rates or charges for the
transportation of passengers and freight by railroads and other
transportation companies, except motor carriers of property, and no
railroad or other transportation company under its jurisdiction,
except motor carriers of property, shall charge or demand or collect
or receive a greater or less or different compensation for that
transportation of passengers or freight, or for any service in
connection therewith, between the points named in any tariff of rates
established by the commission than the rates, fares and charges
which are specified in that tariff. The commission may examine books,
records and papers of all railroad and other transportation
companies, except motor carriers of property; may hear and determine
complaints against railroad and other transportation companies; and
may issue subpoenas and all necessary process and send for persons
and papers. The commission and each of the commissioners may
administer oaths, take testimony and punish for contempt in the same
manner and to the same extent as courts of record. The commission may
prescribe a uniform system of accounts to be kept by all railroad
and other transportation companies, except motor carriers of
property.
(b) Subdivision (a) is not applicable to network railroad
transportation.

728.7. (a) Prior to authorizing any change in the amount of the
payment required of a telephone corporation which provides service
between service areas to a telephone corporation which provides
service within a service area for the use of its telephone lines, and
prior to assigning to subscribers of a telephone corporation
operating within a service area any charge, surcharge, or rate
increase that is a result of a decrease in the amount of that
payment, the commission shall do all of the following:
(1) Require the telephone corporation requesting authorization to
increase subscriber rates or to impose a charge or surcharge on
subscribers as a result of a change in the payments, to notify its
subscribers, whenever the commission commences a proceeding on its
own motion or in response to a petition to authorize a change in the
amount of those payments or to impose that charge, surcharge, or rate
increase as a result of a change in the amount of those payments.
(2) Require the telephone corporation to provide its subscribers
with an exact description of, and explanation for, the change in the
amount of the payment or the imposition of a charge, surcharge, or
rate increase, within 90 days of the authorized change in the amount
of payment or charge, surcharge, or rate increase. The description
and explanation shall include a reasonably accurate quantitative
assessment of the results of, and the reasons for, the change in the
amount of payment or imposition of a charge, surcharge, or rate
increase for each class of subscriber.
(b) The commission shall provide the Legislature with the
information required of a telephone corporation pursuant to paragraph
(2) of subdivision (a), for any change in payments, or imposition of
a charge, surcharge, or rate increase as a result of a change in
payment, made prior to January 1, 1987, within 60 days after that
date.

729. The commission may, upon a hearing, investigate a single rate,
classification, rule, contract, or practice, or any number thereof,
or the entire schedule or schedules of rates, classifications, rules,
contracts, and practices, or any thereof, of any public utility, and
may establish new rates, classifications, rules, contracts, or
practices or schedule or schedules in lieu thereof.

729.5. A public utility, other than one-way radio paging services,
shall not change a group of customers from one rate schedule to
another rate schedule, if the change would result in an increase of
more than 10 percent in the rate charged to the affected customers,
without first notifying customers of the change. Upon the request of
an affected customer, the commission may hold a hearing on the
change.

730. (a) The commission shall, upon a hearing, determine the kind
and character of facilities and the extent of the operation thereof,
necessary reasonably and adequately to meet public requirements for
service furnished by common carriers between any two or more points,
and shall fix and determine the just, reasonable, and sufficient
rates for such service. Whenever two or more common carriers are
furnishing service in competition with each other, the commission
may, after hearing, when necessary for the preservation of adequate
service and when public interest demands, prescribe uniform rates,
classifications, rules, and practices to be charged, collected, and
observed by all such common carriers.
(b) Subdivision (a) is not applicable to network railroad
transportation.

730.3. The commission shall notify every state and local public
agency and corporation operating a passenger transit system making a
written request for such notification before approving any rate
increase for the passenger transportation services of any railroad or
passenger state corporation within the territory served by such
public transit system.

730.7. In determining reimbursement to railroad corporations for
the operation of rail passenger service, the commission shall not
exceed that compensation which would be payable if calculated
pursuant to the standards of the Rail Services Planning Office of the
Interstate Commerce Commission contained in Title 49 of the Code of
Federal Regulations, Part 1127.

730.8. Whenever a state agency files with the commission an
application for an increase in rates or fares or for any change in
the level of service for passenger transportation by a railroad
corporation and the state agency has prior to the application held a
public hearing on the matter which the commission finds to be
complete and adequate, the commission may determine not to hold any
further hearing on the matter and in this event shall approve, modify
and approve as so modified, or disapprove the application within 90
days of the date of filing with the commission.

732. (a) Whenever the commission, after a hearing finds that the
rates, fares, or charges in force over two or more common carriers,
between any two points in this state, are unjust, unreasonable, or
excessive, or that no satisfactory through route or joint rate, fare,
or charge exists between such points, and that the public
convenience and necessity demand the establishment of such a through
route and joint rate, fare, or charge, the commission may order such
common carriers to establish such through route and may establish and
fix a joint rate, fare, or charge which will be fair, just,
reasonable, and sufficient, to be charged and collected in the
future, and the terms and conditions under which such through route
shall be operated. The commission may order that freight moving
between such points shall be carried by the common carriers
participating in such through route and joint rate, without being
transferred from the originating cars.
(b) Subdivision (a) is not applicable to network railroad
transportation.

733. (a) If the common carriers do not agree upon the division
between them of the joint rates, fares, or charges established by the
commission over through routes, the commission shall, after hearing,
by supplemental order, establish that division. Where any railroad,
or passenger stage corporation that is made a party to a through
route has itself over its own line an equally satisfactory through
route between the termini of the through route established, that
railroad, or passenger stage corporation may require as its division
of the joint rate, fare, or charge its local rate, fare, or charge
over the portion of its line comprised in the through route, and the
commission may, in its discretion, allow to that railroad or
passenger stage corporation, more than its local rate, fare, or
charge if the commission determines that it will be equitable so to
do. The commission may establish and fix through routes and joint
rates, fares, or charges over common carriers and stage or auto stage
lines which may not be otherwise subject to the provisions of this
part, and may fix the division of those joint rates, fares, or
charges.
(b) Subdivision (a) is not applicable to network railroad
transportation.

734. When complaint has been made to the commission concerning any
rate for any product or commodity furnished or service performed by
any public utility, and the commission has found, after
investigation, that the public utility has charged an unreasonable,
excessive, or discriminatory amount therefor in violation of any of
the provisions of this part, the commission may order that the public
utility make due reparation to the complainant therefor, with
interest from the date of collection if no discrimination will result
from such reparation. No order for the payment of reparation upon
the ground of unreasonableness shall be made by the commission in any
instance wherein the rate in question has, by formal finding, been
declared by the commission to be reasonable, and no assignment of a
reparation claim shall be recognized by the commission except
assignments by operation of law as in cases of death, insanity,
bankruptcy, receivership, or order of court.

735. If the public utility does not comply with the order for the
payment of reparation within the time specified in the order, suit
may be instituted in any court of competent jurisdiction to recover
the payment within one year from the date of the order, and not
after. All complaints for damages resulting from a violation of any
of the provisions of this part, except Sections 494 and 532, shall
either be filed with the commission, or where concurrent jurisdiction
of the cause of action is vested by the Constitution and laws of
this State in the courts, in any court of competent jurisdiction,
within two years from the time the cause of action accrues, and not
after.

736. All complaints for damages resulting from the violation of any
of the provisions of Sections 494 or 532 shall either be filed with
the commission, or, where concurrent jurisdiction of the cause of
action is vested in the courts of this state, in any court of
competent jurisdiction within three years from the time the cause of
action accrues, and not after. If claim for the asserted damages has
been presented in writing to the public utility concerned within the
period of three years, the period shall be extended to include six
months from the date notice in writing is given by the public utility
to the claimant of the disallowance of the claim, or of any part or
parts thereof specified in the notice.
Whenever the commission institutes an investigation of
unauthorized undercharge by any public utility, the institution of
the investigation by the commission shall toll the three-year period
specified in this section until the commission has rendered its
initial decision on the matter. The commission shall render its final
decision within two years of the date of the order instituting the
investigation.

737. All complaints for the collection of the lawful tariff charges
or any part thereof, of public utilities may be filed in any court
of competent jurisdiction within three years from the time the cause
of action accrues, and not after, but if a public utility presents
its claim or demand in writing to the person from whom the tariff
charges, or any part thereof, are alleged to be due within such
period of three years, that period shall be extended to include six
months from the date notice in writing is given to the public
utility, by such person, or refusal to pay the demand, or any part or
parts thereof specified in the notice of refusal.
If suit for the collection of the lawful tariff charges or any
portion thereof of a public utility is filed in any court in
accordance with the terms of this section, or if such collection is
made by the public utility without filing suit, the person against
whom such suit is filed or from whom such collection is made may,
within 90 days from the date of service of summons in the suit, or
the date of the collection, file with the commission, or with any
court of competent jurisdiction, a complaint for damages resulting
from the violation of any of the provisions of this part with respect
to the transaction to which the suit of the public utility relates,
or for which such collection has been made.

737.3. (a) (1) A highway carrier, as defined by subdivision (c), a
freight forwarder, a party representing a carrier or freight
forwarder, or an assignee of a carrier or freight forwarder shall
not, based on a filed tariff or a filed contract, collect or attempt
to collect any additional charge in excess of the charge originally
billed by the carrier or freight forwarder for transportation service
previously provided subject to the jurisdiction of the commission,
except where there are mistakes in billing that are acknowledged by
both parties or that are the result of intentional misrepresentation
by the shipper.
(2) Similarly, the person or entity against whom a claim has been
made under the circumstances described in paragraph (1) shall not be
liable for additional amounts based on a filed tariff or a filed
contract, except where there are mistakes in billing acknowledged by
both parties or that are the result of intentional misrepresentation
by the shipper.
(b) For the purposes of this section, the term "claimant" shall
mean the carrier or freight forwarder, or its assignee or
representative making a claim for the collection of rates and charges
in addition to those originally billed and collected for the
transportation.
(c) "Highway carrier" or "carrier" means every corporation or
person, their lessees, trustees, receivers or trustees appointed by
any court whatsoever, engaged in transportation of property for
compensation or hire as a business over any public highway in this
state by means of a motor vehicle, except that "highway carrier" does
not include:
(1) Any farmer resident of this state who occasionally transports
from the place of production to a warehouse, regular market, place of
storage, or place of shipment the farm products of neighboring
farmers in exchange for like services or for a cash consideration or
farm products for compensation.
(2) Persons or corporations hauling their own property.
(3) Any farmer operating a motor vehicle used exclusively in the
transportation of his or her livestock and agricultural commodities
or in the transportation of supplies to his or her farm.
(4) Any nonprofit agricultural cooperative association organized
and acting within the scope of its powers under Chapter 1 (commencing
with Section 54001) of Division 20 of the Agricultural Code to the
extent only that it is engaged in transporting its own property or
the property of its members.
(5) Any person exclusively transporting United States mail
pursuant to a contract with the United States government.
(6) Any integrated intermodal small package carrier which is
registered subject to Chapter 2.7 (commencing with Section 4120).
(7) Any household goods carrier, as defined in Section 5109.
(d) For purposes of this section, "mistakes in billing" include,
but are not limited to, matters such as clerical errors, billing for
transportation of a different commodity than the commodity actually
shipped, and billing for transportation of a smaller amount of the
commodity than the amount actually shipped.
(e) This section shall apply to all claims arising from
transportation performed (in whole or in part) before January 1,
1995, including all lawsuits or claims pending on the effective date
of this section.
(f) If any claim that qualifies under this section was settled by
mutual agreement of the parties to the claim, or resolved by a final
adjudication of a federal or state court, before the effective date
of this section, the settlement or adjudication shall be treated as
binding, enforceable, and not contrary to law, unless the settlement
was agreed to as a result of fraud or coercion.
(g) If the claimant has filed, on or before the effective date of
this section, a suit for the collection of additional freight
charges, the claimant shall notify the person, or entity, from whom
additional freight charges are sought of the provisions of this
section within 30 days of the effective date of this section.
(h) If, on or before the effective date of this section, the
claimant has demanded the payment of additional freight charges and
has not filed a suit for the collection of additional freight
charges, the claimant shall notify the person, or entity, from whom
additional freight charges are sought of the provisions of this
section within 30 days of the effective date of this section.

738. For the purpose of Sections 734 to 737, inclusive, the cause
of action shall accrue upon the delivery or tender of delivery of the
shipment or the performance of the service or the furnishing of the
commodity or product with respect to which complaint is filed or
claim made. The remedies in those sections shall be cumulative and in
addition to any other remedy or remedies in this part provided in
case of failure of a public utility to obey an order or decision of
the commission.

738.6. In establishing rates for a public utility operating any
portion of its line, plant, or system within a federally designated
nonattainment area, the commission shall determine which expenses
related to compliance with state and local air pollution control
requirements for using clean-burning fuels in that area are
reasonable and necessary and shall approve those expenses.

739. (a) As used in this section:
(1) "Baseline quantity" means a quantity of electricity or gas
allocated by the commission for residential customers based on from
50 to 60 percent of average residential consumption of these
commodities, except that, for residential gas customers and for
all-electric residential customers, the baseline quantity shall be
established at from 60 to 70 percent of average residential
consumption during the winter heating season. In establishing the
baseline quantities, the commission shall take into account climatic
and seasonal variations in consumption and the availability of gas
service. The commission shall review and revise baseline quantities
as average consumption patterns change in order to maintain these
ratios.
(2) "Residential customer" means those customers receiving
electrical or gas service pursuant to a domestic rate schedule and
excludes industrial, commercial, and every other category of
customer.
(b) The commission shall designate a baseline quantity of gas and
electricity which is necessary to supply a significant portion of the
reasonable energy needs of the average residential customer. In
estimating those quantities, the commission shall take into account
differentials in energy needs between customers whose residential
energy needs are currently supplied by electricity alone or by both
electricity and gas. The commission shall develop a separate baseline
quantity for all-electric residential customers. For these purposes,
"all-electric residential customers" are residential customers
having electrical service only or whose space heating is provided by
electricity, or both. The commission shall also take into account
differentials in energy use by climatic zone and season.
(c) (1) The commission shall establish a standard limited
allowance which shall be in addition to the baseline quantity of gas
and electricity for residential customers dependent on life-support
equipment, including, but not limited to, emphysema and pulmonary
patients. A residential customer dependent on life-support equipment
shall be allocated a higher energy allocation than the average
residential customer.
(2) "Life-support equipment" means that equipment which utilizes
mechanical or artificial means to sustain, restore, or supplant a
vital function, or mechanical equipment which is relied upon for
mobility both within and outside of buildings. "Life-support
equipment," as used in this subdivision, includes all of the
following: all types of respirators, iron lungs, hemodialysis
machines, suction machines, electric nerve stimulators, pressure pads
and pumps, aerosol tents, electrostatic and ultrasonic nebulizers,
compressors, IPPB machines, and motorized wheelchairs.
(3) The limited allowance specified in this subdivision shall also
be made available to paraplegic and quadriplegic persons in
consideration of the increased heating and cooling needs of those
persons.
(4) The limited allowance specified in this subdivision shall also
be made available to multiple sclerosis patients in consideration of
the increased heating and cooling needs of those persons.
(5) The limited allowance specified in this subdivision shall also
be made available to scleroderma patients in consideration of the
increased heating needs of those persons.
(6) The limited allowance specified in this subdivision shall also
be made available to persons who are being treated for a
life-threatening illness or have a compromised immune system, if a
licensed physician and surgeon or a person licensed pursuant to the
Osteopathic Initiative Act certifies in writing to the utility that
the additional heating or cooling allowance, or both, is medically
necessary to sustain the life of the person or prevent deterioration
of the person's medical condition.
(d) (1) The commission shall require that every electrical and gas
corporation file a schedule of rates and charges providing baseline
rates. The baseline rates shall apply to the first or lowest block of
an increasing block rate structure which shall be the baseline
quantity. In establishing these rates, the commission shall avoid
excessive rate increases for residential customers, and shall
establish an appropriate gradual differential between the rates for
the respective blocks of usage.
(2) In establishing residential electric and gas rates, including
baseline rates, the commission shall ensure that the rates are
sufficient to enable the electrical corporation or gas corporation to
recover a just and reasonable amount of revenue from residential
customers as a class, while observing the principle that electricity
and gas services are necessities, for which a low affordable rate is
desirable and while observing the principle that conservation is
desirable in order to maintain an affordable bill.
(3) At least until December 31, 2003, the commission shall require
that all charges for residential electric customers are volumetric,
and shall prohibit any electrical corporation from imposing any
charges on residential consumption that are independent of
consumption, unless those charges are in place prior to April 12,
2001.
(e) (1) Each electrical corporation and each gas corporation
shall, in a timeframe consistent with each electrical and gas
corporation's next general rate case, disclose on the billing
statement of a residential customer all of the following:
(A) Cost per kilowatthour or gas therm per tier.
(B) Allocation of kilowatthour or gas therm per tier.
(C) Visual representation of usage and cost per tier.
(D) Usage comparison with prior periods.
(E) Itemized cost components in the bill to identify state and
local taxes.
(F) Identification of delivery, generation, public purpose, and
other charges.
(G) Contact information for the commission's Consumer Affairs
Branch.
(2) An electrical corporation and a gas corporation shall make
available online to residential customers both of the following:
(A) Examples of how conservation measures, including changing
thermostat settings and turning off unused lights, could reduce
energy usage and costs.
(B) Examples of how energy-saving devices and weatherization
measures could reduce energy usage and costs.
(3) The commission may modify, adjust, or add to the requirements
of this subdivision as the individual circumstances of each
electrical corporation or gas corporation merits, or for master-meter
customers, as individual circumstances merit.
(4) The commission shall, as part of the general rate case of an
electrical corporation or gas corporation, assess opportunities to
improve the quality of information contained in the utility's
periodic billings.
(f) Wholesale electrical or gas purchases, and the rates charged
therefor, are exempt from this section.
(g) Nothing contained in this section shall be construed to
prohibit experimentation with alternative gas or electrical rate
schedules for the purpose of achieving energy conservation.

739.1. (a) As used in this section, the following terms have the
following meanings:
(1) "Baseline quantity" has the same meaning as defined in Section
739.
(2) "California Solar Initiative" means the program providing
ratepayer funded incentives for eligible solar energy systems adopted
by the commission in Decision 05-12-044 and Decision 06-01-024, as
modified by Article 1 (commencing with Section 2851) of Chapter 9 of
Part 2 and Chapter 8.8 (commencing with Section 25780) of Division 15
of the Public Resources Code.
(3) "CalWORKs program" means the program established pursuant to
the California Work Opportunity and Responsibility to Kids Act
(Chapter 2 (commencing with Section 11200) of Part 3 of Division 9 of
the Welfare and Institutions Code).
(4) "Public goods charge" means the nonbypassable separate rate
component imposed pursuant to Article 7 (commencing with Section 381)
of Chapter 2.3 and the nonbypassable system benefits charge imposed
pursuant to the Reliable Electric Service Investments Act (Article 15
(commencing with Section 399) of Chapter 2.3).
(b) (1) The commission shall establish a program of assistance to
low-income electric and gas customers with annual household incomes
that are no greater than 200 percent of the federal poverty guideline
levels, the cost of which shall not be borne solely by any single
class of customer. The program shall be referred to as the California
Alternate Rates for Energy or CARE program. The commission shall
ensure that the level of discount for low-income electric and gas
customers correctly reflects the level of need.
(2) The commission may, subject to the limitation in paragraph
(4), increase the rates in effect for CARE program participants for
electricity usage up to 130 percent of baseline quantities by the
annual percentage increase in benefits under the CalWORKs program as
authorized by the Legislature for the fiscal year in which the rate
increase would take effect, but not to exceed 3 percent per year.
(3) Beginning January 1, 2019, the commission may, subject to the
limitation in paragraph (4), establish rates for CARE program
participants pursuant to this section and Sections 739 and 739.9,
subject to both of the following:
(A) The requirements of subdivision (b) of Section 382 that the
commission ensure that low-income ratepayers are not jeopardized or
overburdened by monthly energy expenditures.
(B) The requirement that the level of the discount for low-income
electricity and gas ratepayers correctly reflects the level of need
as determined by the needs assessment conducted pursuant to
subdivision (d) of Section 382.
(4) Tier 1, tier 2, and tier 3 CARE rates shall not exceed 80
percent of the corresponding tier 1, tier 2, and tier 3 rates charged
to residential customers not participating in the CARE program,
excluding any Department of Water Resources bond charge imposed
pursuant to Division 27 (commencing with Section 80000) of the Water
Code, the CARE surcharge portion of the public goods charge, any
charge imposed pursuant to the California Solar Initiative, and any
charge imposed to fund any other program that exempts CARE
participants from paying the charge.
(5) Rates charged to CARE program participants shall not have more
than three tiers. An electrical corporation that does not have a
tier 3 CARE rate may introduce a tier 3 CARE rate that, in order to
moderate the impact on program participants whose usage exceeds 130
percent of baseline quantities, shall be phased in to 80 percent of
the corresponding rates charged to residential customers not
participating in the CARE program, excluding any Department of Water
Resources bond charge imposed pursuant to Division 27 (commencing
with Section 80000) of the Water Code, the CARE surcharge portion of
the public goods charge, any charge imposed pursuant to the
California Solar Initiative, and any other charge imposed to fund a
program that exempts CARE participants from paying the charge. For an
electrical corporation that does not have a tier 3 CARE rate that
introduces a tier 3 CARE rate, the initial rate shall be no more than
150 percent of the CARE baseline rate. Any additional revenues
collected by an electrical corporation resulting from the adoption of
a tier 3 CARE rate shall, until the utility's next periodic general
rate case review of cost allocation and rate design, be credited to
reduce rates of residential ratepayers not participating in the CARE
program with usage above 130 percent of baseline quantities.
(c) The commission shall work with the public utility electrical
and gas corporations to establish penetration goals. The commission
shall authorize recovery of all administrative costs associated with
the implementation of the CARE program that the commission determines
to be reasonable, through a balancing account mechanism.
Administrative costs shall include, but are not limited to, outreach,
marketing, regulatory compliance, certification and verification,
billing, measurement and evaluation, and capital improvements and
upgrades to communications and processing equipment.
(d) The commission shall examine methods to improve CARE
enrollment and participation. This examination shall include, but
need not be limited to, comparing information from CARE and the
Universal Lifeline Telephone Service (ULTS) to determine the most
effective means of utilizing that information to increase CARE
enrollment, automatic enrollment of ULTS customers who are eligible
for the CARE program, customer privacy issues, and alternative
mechanisms for outreach to potential enrollees. The commission shall
ensure that a customer consents prior to enrollment. The commission
shall consult with interested parties, including ULTS providers, to
develop the best methods of informing ULTS customers about other
available low-income programs, as well as the best mechanism for
telephone providers to recover reasonable costs incurred pursuant to
this section.
(e) (1) The commission shall improve the CARE application process
by cooperating with other entities and representatives of California
government, including the California Health and Human Services Agency
and the Secretary of California Health and Human Services, to ensure
that all gas and electric customers eligible for public assistance
programs in California that reside within the service territory of an
electrical corporation or gas corporation, are enrolled in the CARE
program. To the extent practicable, the commission shall develop a
CARE application process using the existing ULTS application process
as a model. The commission shall work with public utility electrical
and gas corporations and the Low-Income Oversight Board established
in Section 382.1 to meet the low-income objectives in this section.
(2) The commission shall ensure that an electrical corporation or
gas corporation with a commission-approved program to provide
discounts based upon economic need in addition to the CARE program,
including a Family Electric Rate Assistance program, utilize a single
application form, to enable an applicant to alternatively apply for
any assistance program for which the applicant may be eligible. It is
the intent of the Legislature to allow applicants under one program,
that may not be eligible under that program, but that may be
eligible under an alternative assistance program based upon economic
need, to complete a single application for any commission-approved
assistance program offered by the public utility.
(f) The commission's program of assistance to low-income electric
and gas customers shall, as soon as practicable, include nonprofit
group living facilities specified by the commission, if the
commission finds that the residents in these facilities substantially
meet the commission's low-income eligibility requirements and there
is a feasible process for certifying that the assistance shall be
used for the direct benefit, such as improved quality of care or
improved food service, of the low-income residents in the facilities.
The commission shall authorize utilities to offer discounts to
eligible facilities licensed or permitted by appropriate state or
local agencies, and to facilities, including women's shelters,
hospices, and homeless shelters, that may not have a license or
permit but provide other proof satisfactory to the utility that they
are eligible to participate in the program.
(g) It is the intent of the Legislature that the commission ensure
CARE program participants are afforded the lowest possible electric
and gas rates and, to the extent possible, are exempt from additional
surcharges attributable to the energy crisis of 2000-01.

739.2. (a) The commission's program of assistance to low-income
electric and gas customers shall also include the following
facilities, provided the commission finds that the occupants of the
facilities substantially meet the commission's low-income eligibility
requirements and there is a feasible process for certifying that the
assistance shall be used for the direct benefit of the occupants of
the facilities:
(1) Migrant farmworker housing centers provided pursuant to
Section 50710 of the Health and Safety Code.
(2) Employee housing, as defined in Section 17008 of the Health
and Safety Code, that is licensed and inspected by state or local
agencies pursuant to Part 1 (commencing with Section 17000) of
Division 13 of the Health and Safety Code.
(3) Housing for agricultural employees, as defined in subdivision
(b) of Section 1140.4 of the Labor Code, that has received an
exemption from local property taxes pursuant to subdivision (g) of
Section 214 of the Revenue and Taxation Code.
(b) The assistance provided pursuant to subdivision (a) shall only
apply to gas and electricity, or both, used for the housing occupied
by the workers and employees specified in subdivision (a).

739.3. (a) The commission shall develop, implement, and maintain a
suitable program to establish a fair and equitable local rate
structure aided by universal service rate support to small
independent telephone corporations serving rural and small
metropolitan areas. The purpose of the program shall be to promote
the goals of universal telephone service and to reduce any disparity
in the rates charged by those companies.
(b) For purposes of this section, small independent telephone
corporations means those independent telephone corporations serving
rural areas, as determined by the commission.
(c) The commission shall develop, implement, and maintain a
suitable, competitively neutral, and broadbased program to establish
a fair and equitable local rate support structure aided by universal
service rate support to telephone corporations serving areas where
the cost of providing services exceeds rates charged by providers, as
determined by the commission. The commission shall develop and
implement the program on or before October 1, 1996. The purpose of
the program shall be to promote the goals of universal telephone
service and to reduce any disparity in the rates charged by those
companies. Except as otherwise explicitly provided, this subdivision
does not limit the manner in which the commission collects and
disburses funds, and does not limit the manner in which it may
include or exclude the revenue of contributing entities in
structuring the program.
(d) The commission shall structure the programs required by this
section so that any charge imposed to promote the goals of universal
service reasonably equals the value of the benefits of universal
service to contributing entities and their subscribers.
(e) The commission shall investigate reducing the level of
universal service rate support, or elimination of universal service
rate support in service areas with demonstrated competition.
(f) By July 1, 2010, the commission shall prepare and submit to
the Legislature a report on the affordability of basic telephone
service in areas funded by the California High-Cost Fund-B
Administrative Committee Fund. The report, among other things, shall
provide information on prices and costs of basic telephone service,
and penetration and utilization rates of basic telephone service by
income, ethnicity, age, and other demographic characteristics, using
surveys and other methods of identifying the factors affecting
affordability of basic telephone service for customers and
noncustomers. The report shall describe the characteristics of
noncustomers and their reasons for not having telephone service. The
report shall identify those persons most at risk of losing basic
telephone service. The report shall be funded out of the California
High-Cost Fund-B Administrative Committee Fund.
(g) This section shall only apply to the California High-Cost
Fund-B Administrative Committee Fund program.
(h) This section shall remain in effect only until January 1,
2012, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2012, deletes or extends
that date.

739.4. (a) Any natural gas customer who enrolls in the CARE program
after the effective date of this section, but before October 1,
2001, shall receive the same one-time bill credit based on the amount
of each gas corporation's average CARE customer discount applied for
each month in October 2000 to March 2001, inclusive. The credit does
not apply to a customer who initiates service with a gas corporation
after the effective date of this section, and who has no prior
history of service with the gas corporation. CARE program funds shall
be used for the purpose of providing these credits. The commission
shall adjust CARE program income requirements annually to reflect the
increased cost-of-living due to inflation.
(b) The commission shall require all electrical and gas utilities
through which CARE program rates are available to do all of the
following, in multilingual formats to the extent printed and recorded
information is provided, to facilitate better penetration rates for
the CARE program and to protect low-income and senior households from
unwarranted disconnection of necessary electric and gas services:
(1) Provide an outgoing message on all calls, where the customer
is seeking to establish service or is put on hold, to customer
service lines that briefly describes the CARE program in standard
language approved by the commission, and that provides a toll-free
phone number for customers to call to subscribe to the program or for
further information.
(2) Provide information to customers about the CARE program and
facilitate subscription to CARE, on all calls in which customers are
making payment arrangements, on all collections calls, and on all
calls for reconnection of service.
(3) (A) Provide information about the CARE program and other
assistance programs, and attempt to qualify customers for CARE, and
provide information about individual payment arrangements that allow
customers to pay the amounts due over a reasonable period of time,
not to exceed 12 months, and attempt to enroll customers in a payment
arrangement program, before effecting any disconnection of service
for nonpayment or inability to pay energy bills in full.
(B) (i) Offer individual payment arrangements to customers so that
the customer is able to pay amounts due over a reasonable period of
time, not to exceed 12 months.
(ii) Prohibit the disconnection of customers that have made, and
are in compliance with, payment arrangements offered by an electric
or gas utility pursuant to this subparagraph.
(C) Prohibit the disconnection of a delinquent residential
customer for amounts due in which the electric or gas utility
receives a commitment pledge, letter of intent, purchase order, or
other notification that a provider of energy assistance is forwarding
payment sufficient to prevent disconnection.
(D) (i) Advise residential customers facing disconnection or who
contact the utility to make payment arrangements of the levelizing
payment program that allows them to pay a monthly average bill based
on 12 months usage.
(ii) Advise residential customers about enrollment in the
levelizing payment program in conjunction with completion of payment
arrangements, payment under terms of subparagraph (B), or at the
customer's request absent those arrangements.
(E) Nothing in this paragraph is intended to reduce the revenues
of any utility extending payment arrangements subject to the terms of
the paragraph.
(4) Provide information on customer bills, presented in a
conspicuous manner on a front facing page, that indicates that a
customer may be eligible for the CARE program. This notice shall be
provided quarterly on customer bills.
(c) The commission shall conduct targeted outreach about the
program using census block data to effectively target low-income and
senior households throughout the state.
(d) CARE program funds shall be used for the purposes of paragraph
(3) of subdivision (b) and outreach pursuant to subdivision (c). The
commission's costs for outreach pursuant to subdivision (c) may not
exceed five hundred thousand dollars ($500,000) above the amount that
the commission currently expends on similar activities related to
the CARE program. Energy corporations may recover all reasonable
costs from the CARE program funds of implementing this section.

739.5. (a) The commission shall require that, whenever gas or
electric service, or both, is provided by a master-meter customer to
users who are tenants of a mobilehome park, apartment building, or
similar residential complex, the master-meter customer shall charge
each user of the service at the same rate that would be applicable if
the user were receiving gas or electricity, or both, directly from
the gas or electrical corporation. The commission shall require the
corporation furnishing service to the master-meter customer to
establish uniform rates for master-meter service at a level that will
provide a sufficient differential to cover the reasonable average
costs to master-meter customers of providing submeter service, except
that these costs shall not exceed the average cost that the
corporation would have incurred in providing comparable services
directly to the users of the service.
(b) Every master-meter customer of a gas or electrical corporation
subject to subdivision (a) who, on or after January 1, 1978,
receives any rebate from the corporation shall distribute to, or
credit to the account of, each current user served by the
master-meter customer that portion of the rebate which the amount of
gas or electricity, or both, consumed by the user during the last
billing period bears to the total amount furnished by the corporation
to the master-meter customer during that period.
(c) An electrical or gas corporation furnishing service to a
master-meter customer shall furnish to each user of the service
within a submetered system every public safety customer service which
it provides beyond the meter to its other residential customers. The
corporation shall furnish a list of those services to the
master-meter customer who shall post the list in a conspicuous place
accessible to all users. Every corporation shall provide these public
safety customer services to each user of electrical or gas service
under a submetered system without additional charge unless the
corporation has included the average cost of these services in the
rate differential provided to the master-meter customer on January 1,
1984, in which case the commission shall deduct the average cost of
providing these public safety customer services when approving rate
differentials for master-meter customers.
(d) Every master-meter customer is responsible for maintenance and
repair of its submeter facilities beyond the master-meter, and
nothing in this section requires an electrical or gas corporation to
make repairs to or perform maintenance on the submeter system.
(e) Every master-meter customer shall provide an itemized billing
of charges for electricity or gas, or both, to each individual user
generally in accordance with the form and content of bills of the
corporation to its residential customers, including, but not limited
to, the opening and closing readings for the meter, and the
identification of all rates and quantities attributable to each block
in the applicable rate structure. The master-meter customer shall
also post, in a conspicuous place, the applicable prevailing
residential gas or electrical rate schedule, as published by the
corporation.
(f) The commission shall require that every electrical and gas
corporation shall notify each master-meter customer of its
responsibilities to its users under this section.
(g) The commission shall accept and respond to complaints
concerning the requirements of this section through the consumer
affairs branch, in addition to any other staff that the commission
deems necessary to assist the complainant. In responding to the
complaint, the commission shall consider the role that the office of
the county sealer in the complainant's county of residence may have
in helping to resolve the complaint and, where appropriate,
coordinate with that office.
(h) Notwithstanding any other provision of law or decision of the
commission, the commission shall not deny eligibility for the
California Alternative Rates for Energy (CARE) program, created
pursuant to Section 739.1, for a residential user of gas or electric
service who is a submetered resident or tenant served by a
master-meter customer on the basis that some residential units in the
master-meter customer's mobilehome park, apartment building, or
similar residential complex do not receive gas or electric service
through a submetered system.

739.6. The commission shall establish rates using cost allocation
principles that fairly and reasonably assign to different customer
classes the costs of providing service to those customer classes,
consistent with the policies of affordability and conservation. The
cost allocation methodology adopted for gas corporations by the
commission in Decisions 86-12-009 and 86-12-010, as supplemented by
Decisions 87-05-046 and 87-12-039, is consistent with this policy,
and shall be retained by the commission at least until December 31,
1990, except that the commission may modify this cost allocation
methodology to address customer hardships and inequities if
residential customers as a class are not, on balance, adversely
affected and the purpose of the modification is not solely protection
of gas corporation revenues. If any gas corporation files a cost
allocation application seeking to change that methodology after May
1, 1990, the commission may not issue an order on that application
until January 1, 1991.

739.7. In establishing residential rates, the commission shall
retain an appropriate inverted rate structure. If the commission
increases baseline rates pursuant to Section 739, revenues resulting
from those increases shall be used exclusively to reduce nonbaseline
residential rates.

739.8. (a) Access to an adequate supply of healthful water is a
basic necessity of human life, and shall be made available to all
residents of California at an affordable cost.
(b) The commission shall consider and may implement programs to
provide rate relief for low-income ratepayers.
(c) The commission shall consider and may implement programs to
assist low-income ratepayers in order to provide appropriate
incentives and capabilities to achieve water conservation goals.
(d) In establishing the feasibility of rate relief and
conservation incentives for low-income ratepayers, the commission may
take into account variations in water needs caused by geography,
climate and the ability of communities to support these programs.

739.9. (a) The commission may, subject to the limitation in
subdivision (b), increase the rates charged residential customers for
electricity usage up to 130 percent of the baseline quantities, as
defined in Section 739, by the annual percentage change in the
Consumer Price Index from the prior year plus 1 percent, but not less
than 3 percent and not more than 5 percent per year. For purposes of
this subdivision, the annual percentage change in the Consumer Price
Index shall be calculated using the same formula that was used to
determine the annual Social Security Cost of Living Adjustment on
January 1, 2008. This subdivision shall become inoperative on January
1, 2019, unless a later enacted statute deletes or extends that
date.
(b) The rates charged residential customers for electricity usage
up to the baseline quantities, including any customer charge
revenues, shall not exceed 90 percent of the system average rate
prior to January 1, 2019, and may not exceed 92.5 percent after that
date. For purposes of this subdivision, the system average rate shall
be determined by dividing the electrical corporation's total revenue
requirements for bundled service customers by the adopted forecast
of total bundled service sales.
(c) This section does not require the commission to increase any
residential rate or place any restriction upon, or otherwise limit,
the authority of the commission to reduce any residential rate.

739.10. The commission shall ensure that errors in estimates of
demand elasticity or sales do not result in material over or
undercollections of the electrical corporations.

740. For purposes of setting the rates to be charged by every
electrical corporation, gas corporation, heat corporation or
telephone corporation for the services or commodities furnished by
it, the commission may allow the inclusion of expenses for research
and development.

740.1. The commission shall consider the following guidelines in
evaluating the research, development, and demonstration programs
proposed by electrical and gas corporations:
(a) Projects should offer a reasonable probability of providing
benefits to ratepayers.
(b) Expenditures on projects which have a low probability for
success should be minimized.
(c) Projects should be consistent with the corporation's resource
plan.
(d) Projects should not unnecessarily duplicate research
currently, previously, or imminently undertaken by other electrical
or gas corporations or research organizations.
(e) Each project should also support one or more of the following
objectives:
(1) Environmental improvement.
(2) Public and employee safety.
(3) Conservation by efficient resource use or by reducing or
shifting system load.
(4) Development of new resources and processes, particularly
renewable resources and processes which further supply technologies.
(5) Improve operating efficiency and reliability or otherwise
reduce operating costs.

740.3. (a) The commission, in cooperation with the State Energy
Conservation and Development Commission, the State Air Resources
Board, air quality management districts and air pollution control
districts, regulated electrical and gas corporations, and the motor
vehicle industry, shall evaluate and implement policies to promote
the development of equipment and infrastructure needed to facilitate
the use of electric power and natural gas to fuel low-emission
vehicles. Policies to be considered shall include both of the
following:
(1) The sale-for-resale and the rate-basing of low-emission
vehicles and supporting equipment such as batteries for electric
vehicles and compressor stations for natural gas fueled vehicles.
(2) The development of statewide standards for electric vehicle
charger connections and compressed natural gas vehicle fueling
connections, including installation procedures and technical
assistance to installers.
(b) The commission shall hold public hearings as part of its
effort to evaluate and implement the new policies considered in
subdivision (a), and shall provide a progress report to the
Legislature by January 30, 1993, and every two years thereafter,
concerning policies on rates, equipment, and infrastructure
implemented by the commission and other state agencies, federal and
local governmental agencies, and private industry to facilitate the
use of electric power and natural gas to fuel low-emission vehicles.
(c) The commission's policies authorizing utilities to develop
equipment or infrastructure needed for electric-powered and natural
gas-fueled low-emission vehicles shall ensure that the costs and
expenses of those programs are not passed through to electric or gas
ratepayers unless the commission finds and determines that those
programs are in the ratepayers' interest. The commission's policies
shall also ensure that utilities do not unfairly compete with
nonutility enterprises.

740.4. (a) The commission shall authorize public utilities to
engage in programs to encourage economic development.
(b) Reasonable expenses for economic development programs, as
specified in this section, shall be allowed, to the extent of
ratepayer benefit, when setting rates to be charged by public
utilities electing to initiate these programs.
(c) Economic development activities may include, but not be
limited to, the following:
(1) Community marketing and development.
(2) Technical assistance to support technology transfer.
(3) Market research.
(4) Site inventories.
(5) Industrial and commercial expansion and relocation assistance.
(6) Business retention and recruitment.
(7) Management assistance.
(d) This section shall not be interpreted to permit the funding of
economic development activities that benefit any affiliated
companies or parent holding companies beyond that which is authorized
by law as of January 1, 1992.
(e) (1) This section does not authorize the commission to
establish discriminatory rates for the purpose of attracting or
benefiting specific industries or business entities, except that
incentives may be provided for the benefit of industries or business
entities whose facilities are located within the boundaries of
enterprise zones, economic incentive areas, recycling market
development zones, or federal rural enterprise communities in
accordance with the provisions of Chapter 12.8 (commencing with
Section 7070) and Article 1 (commencing with Section 7080) of Chapter
12.9 of Division 7 of Title 1 of the Government Code, and Article 2
(commencing with Section 42145) of Chapter 3 of Part 3 of the Public
Resources Code.
(2) The commission may apply the incentives authorized by this
subdivision that benefit industries or business entities whose
facilities are located within the boundaries of economic enterprise
zones or incentive areas to attract a federal Department of Defense
Finance and Accounting Service Center at the existing site of Norton
Air Force Base in San Bernardino County. This paragraph shall become
inoperative if the federal Department of Defense Finance and
Accounting Service Center is not located upon the premises known as
Norton Air Force Base in San Bernardino County and shall also become
inoperative on February 1, 1994, if that facility has not been
awarded to that site before that date.
(f) The commission may provide incentives pursuant to subdivision
(e) to industries or business entities whose facilities are located
within the boundaries of an enterprise zone that engage in activities
in connection with the conversion of Fort Ord to other uses.
(g) The commission may authorize rate discounts to industries or
business entities whose facilities are located or will be located
within the boundaries of enterprise zones, recycling market
development zones, or economic incentive areas pursuant to paragraph
(1) of subdivision (e). These discounts may be applied in either of
the following ways:
(1) Utilities may apply reduced monthly rates to qualifying
customers' monthly utility bills.
(2) Utilities may, at the election of qualifying customers, assign
the discounts to a private or public entity that returns
consideration of like value to those customers, provided the
customers agree to maintain their facilities in a