BILL ANALYSIS
Appropriations Committee Fiscal Summary
8 (Keeley)
Hearing Date: 3/22/01 Amended: 3/22/01
Consultant: Lisa Matocq Policy Vote: E, U & C:
8-2
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BILL SUMMARY: AB 8x, an urgency measure:
increases the Department of Water Resources bonding
authority under its power purchasing program, and makes
other mostly clarifying and technical changes,
extends the existing rate freeze of $0.065/kwh that
applies to residential, small and medium commercial (less
than 100 kw), and street lighting customers of San Diego
Gas & Electric (SDG&E), to all other customers, effective
February 7, 2001, as specified, and
allows the Public Utilities Commission (PUC) to establish
prices to be paid by electrical corporations to
qualifying facilities (QFs) consistent with federal law.
Fiscal Impact (in thousands)
Major Provisions 2000-01 2001-02
2002-03 Fund
Revenue bond debt Provides that existing bonding
authority Special*
and interest may not exceed $10,000,000 in bonds
outstanding at any one time
Reimbursement loss ------------ See Staff Comments
--------- Special*
PUC staff ------------- No costs or
savings ---------- Special**
*Electric Power Fund
**Public Utilities Commission Utilities' Reimbursement Account
STAFF COMMENTS: AB 1x (Keeley, Ch. 4, St. of 2001),
authorized DWR to purchase power and then sell it to
consumers, appropriated $500 million for this purpose, and
authorized DWR to sell revenue bonds. The bonding
authority was based on a formula specified in the bill,
and was intended to be $10 billion, in the aggregate . This
bill deletes that formula and specifies that the amount of
bonds outstanding at any one time may not exceed $10
billion. STAFF NOTES that apparently this change is
intended to allow the Treasurer to refinance bonds at a
lower interest rate when appropriate. However, as drafted,
the bill would allow the Treasurer to sell $10 billion in
bonds initially, retire $5 billion at a later date, issue
another $5 billion, and so on. The bill also contains
other, mostly clarifying and technical, changes intended to
facilitate the sale of the revenue bonds and repayment to
the General Fund.
This bill also contains provisions similar to SB 43x
(Alpert), pending in the Assembly Energy Costs and
Availability Committee. DWR is purchasing about 63% of
SDG&E's load, or roughly 10.7 billion kwh annually, of
which about 61% represents customers subject to the
existing rate freeze. It is likely that extending the rate
freeze will increase the undercollection. However, AB 1x
requires the PUC to establish rates sufficient to cover
DWR's "revenue requirements" (costs) therefore, any
reimbursement loss to DWR resulting from this bill
initially should eventually be recovered.