BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 6 X1
                                                                  Page  1

          Date of Hearing:   January 12, 2000

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                              Carole Migden, Chairwoman

                 AB 6 X1 (Dutra) - As Introduced:  January 11, 2000 

          Policy Committee:                              E.C.&A.Vote:17-1

          Urgency:     No                   State Mandated Local Program:  
          Yes    Reimbursable:              No

           SUMMARY  

          This bill establishes that utility-owned generation assets shall  
          be subject to Public Utilities Commission (PUC) regulation until  
          any proposed disposition has been reviewed and authorized by the  
          PUC.

           FISCAL EFFECT  

          Potential minor absorbable costs to the PUC to review and  
          approve any proposed divestiture of generation assets.

           COMMENTS
           
           1)Background  .  As part of California's electrical restructuring,  
            the PUC required the state's investor-owned utilities (IOUs)  
            to divest of at least 50 percent of their fossil generating  
            assets.  The IOUs divested most of their generation assets,  
            but retain approximately 25,000 MW of generation capacity.  On  
            December 15, 2000, the Federal Energy Regulatory Commission  
            (FERC), which has jurisdiction over the wholesale electricity  
            market, issued an order that effectively "de-federalized" the  
            retained assets by allowing California to exercise its retail  
            ratemaking authority and regulate the retained generation on a  
            cost-of-service basis.

           2)Purpose  .  Under existing law, the IOU generation assets are  
            subject to continued PUC rate regulation until those assets  
            have undergone  market valuation  .  This bill deletes the  
            reference to market valuation, and provides that the remaining  
            generation assets will continue to be regulated until the IOU  
            has applied for and received PUC authorization for  
            divestiture.








                                                                  AB 6 X1
                                                                  Page  2


           Analysis Prepared by  :    Chuck Nicol / APPR. / (916)319-2081