AB1X was signed into law in response to California's 2000-2001 energy crisis.
AB1X allowed the California Department of Water Resources (DWR) to procure energy for California's electric utilities.
Among other things, AB1X imposed a rate cap on residential rates for usage less than 130% of baseline (tiers one and two). California Senate Bill (SB695) allows the California Public Utilities Commission to authorize annual increases between 3% and 5% to tiers one and two for energy usage less than 130% of baseline beginning January 1, 2010. What this means is that rates in tiers one and two will increase while rates will decrease in tiers three and four. The increase to tiers one and two was necessary to make rates more fair and equitable among all residential customers.