BILL ANALYSIS
ACA 12
Page 1
CONCURRENCE IN SENATE AMENDMENTS
ACA 12 (Vargas)
As Amended August 22, 2002
2/3 vote
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|ASSEMBLY: | |(September 10, |SENATE: |27-11|(August 31, |
| | |2001) | | |2002) |
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(vote not relevant)
Original Committee Reference: U. & C.
SUMMARY : Attempts to mandate state control of the state's
electrical grid by enacting findings and declarations that a
reliable, adequate, and affordable supply of electricity is
essential to the health, safety and welfare of the people of the
state and that the people of the state have a right to require
that those responsible for a reliable, adequate, and affordable
supply of electricity be answerable to them.
The Senate amendments delete the Assembly version of this
constitutional amendment, and instead:
1)Require those responsible for a reliable, adequate, and
affordable supply of electricity be answerable to the people
of the state.
2)Specify that no person may allow the ownership, operation,
control, or management of any public utility electric
transmission facility by any institution that is not subject
to the exclusive authority of the people of the state through
its agencies or political subdivisions.
EXISTING LAW :
1)Authorizes the California Public Utilities Commission (CPUC)
in the state Constitution the Public Utilities Commission to
establish rates and rules for all public utilities subject to
its jurisdiction. The Public Utilities Act generally prohibits
any public utility from transferring or encumbering utility
property that is necessary or useful in the performance of its
duties to the public without an order by the Commission.
2)Provides for federal regulation of the transmission and
ACA 12
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wholesale sales of electric energy in interstate commerce,
except for those matters that are subject to state regulation.
AS PASSED BY THE ASSEMBLY , this constitutional amendment
authorized a legislator to accrue pension or retirement benefits
as a result of his or her service in the Legislature if the
person was a member of a public retirement system prior to
election to the Legislature.
FISCAL EFFECT : Unknown
COMMENTS : According to the author, ACA 12 is designed to
accomplish two primary objectives. The first is to clarify the
connection between the activities of the ISO, the health, safety
and welfare of the people of California and a reliable, adequate
and affordable supply of electricity.
The second is to ensure that the right of the people to protect
their health, safety and welfare cannot be undermined by
allowing for the control of electricity transmission facilities
by an entity other than one responsible to the people of
California.
Although ACA 12 declares that public utility electric
transmission facilities should be subject to the exclusive
control of the State of California and its agencies, there is a
serious jurisdictional question as to whether ACA 12, if
enacted, would be preempted by federal law.
It is the option of the Legislative Counsel (request number
16784 dated August 28, 2002) that Section 9 of ACA 12, which
holds the Independent System Operator answerable to the people
of California, may be inconsistent with federal law.
"...In our opinion, a court would conclude that this
provision grants to the people of this state only the right
to hold those responsible for a reliable, adequate, and
affordable supply of electricity answerable to them where
consistent with federal law, and would not grant the people
of this state the right to hold the Independent System
Operator answerable to them where inconsistent with federal
law."
"...Proposed Section 10 of Article XII of the California
Constitution, if enacted and approved by the voters, would
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prohibit any person or entity, including the Legislature,
the Public Utilities Commission, local government, and
state officers, from allowing any institution, public or
private, that is not subject to the exclusive authority of
the people of the state to own, operate, control, or manage
any public utility electric transmission facility. In our
opinion, a court would hold that Section 10 is inconsistent
with the Federal Energy Regulatory Commission's
jurisdiction over the rates, terms, and conditions of
wholesale transmission and unbundled retail transmission
and over the Independent System Operator in particular,
and, therefore, is preempted by federal law."
It is the author's hope to have ACA 12 approved before the
adjournment of the current legislative session and placed before
voters at the next statewide election - currently scheduled for
March 2004.
This constitutional amendment was substantially amended in the
Senate, the subject matter was not heard in Assembly policy
committee, and the constitutional amendment is therefore
inconsistent with Assembly actions.
Analysis Prepared by : Paul Donahue / U. & C. / (916) 319-2083
FN: 0007926