1972
The California legislature passed the Miller-Warren Energy Lifeline Act to respond to the energy market conditions of the mid-1970's, when energy was scarce and conservation of energy was critical. The Lifeline Act provided for "a quantity of energy necessary to supply minimum energy needs of the average residential customers for such equipment as lighting, cooking, refrigeration, water heating and space heating." The California Public Utilities Commission (CPUC) directed the energy utilities to give all residential customers access to a minimum amount of energy at a discounted price, and to encourage conservation of energy through an "inverted" rate structure (one with higher rates at higher-usage levels).

Lifeline proved to be a successful means of encouraging conservation and providing a minimum amount of energy to residential customers at an affordable price.

1982
Over time, lifeline became difficult to administer as refinements to it began to multiply until the original goals, conservation and inexpensive minimum amounts of energy, failed to adequately treat customers fairly.

A new law amended the Miller-Warren Energy Lifeline Act to "designate a baseline quantity of electricity and gas necessary for a significant portion of the reasonable energy needs of the average residential customers and separate baseline quantity of electricity applicable to all-electric residential customers having electrical service only or whose space heating is provided by electricity, or both."

The CPUC was directed to implement Baseline and also establish a special limited additional allowance for customers dependent on life-support equipment, paraplegic and quadriplegic persons, and multiple sclerosis patients. This became the Medical Baseline allocation, which requires a doctor's certification.

The CPUC established the baseline quantity to be from 50% to 60% of average residential consumption, except for residential customers with a single source of energy (i.e., all gas or all electric), the baseline quantity was to be established at 60% to 70% of average residential consumption during the winter heating season. Geographical and seasonal variations were taken into account. By using the average residential consumption, the baseline allocation also takes into consideration the variances of household size, and number of residents.

The change from lifeline to Baseline was a significant shift away from end-use appliances, to average consumption within geographic zones; however, the original goals--to provide a portion of the reasonable energy needs of customers at the lowest rate, and to encourage and reward conservation remained intact.

1988
In response to high residential winter gas bills of 1987-1988, the Legislature enacted legislation that eliminated the 15%-25% rate differential between baseline and non-baseline rates, and required the CPUC to establish a low-income rate assistance program. Low Income Rates for Energy (LIRA), a 15% discount rate for qualifying low-income customers was implemented in 1989. (The name of the rate was later changed to California Alternate Rate for Energy - CARE).

1992
Legislation was enacted requiring the CPUC to retain an appropriate inverted rate structure in establishing residential rates, and required that if the CPUC increased baseline rates, revenues resulting from those increases be used exclusively to reduce non-baseline residential rates. This legislation was sponsored by Towards Utility Rate Normalization who hailed its passage as the CPUC's "renewed commitment to conservation-promoting baseline rates, which reward customers who conserve energy with lower bills."

Another bill passed in 1992, that retained the inverted rate structure and gradual differential between the rate tiers (of baseline and non-baseline) and established that the highest tier (non-baseline) would be at least 35% greater than the baseline tier. Again, the legislature was continuing the original intent to provide an amount of energy at a lower rate to encourage conservation.

From 1988 to 1995, several changes were legislated affecting the medical baseline criteria and additional allocations. These changes included:

• Addition of heating and cooling equipment as life-support devices for specific illnesses
  
• Scleroderma was added as a qualifying illness
  
• Addition of persons being treated with a life-threatening illness and who have a compromised immune system