BILL NUMBER: AJRX1 1	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  MARCH 27, 2001

INTRODUCED BY   Assembly  Member Cardoza  
Members Cardoza and Keeley 
    (Coauthor:  Assembly Member Negrete McLeod) 

                        MARCH 22, 2001

   Assembly Joint Resolution No. 1--Relative to natural gas.


	LEGISLATIVE COUNSEL'S DIGEST


   AJR 1, as amended, Cardoza.  Natural gas.
   This measure would urge the President  and  
, the  Congress of the United States  , and the Federal
Energy Regulatory Commission  to take  swift and
appropriate action   certain actions  to address
the substantial increase in the cost of natural gas resulting from
federal deregulation of natural gas.
   Fiscal committee:  no.



  
   WHEREAS, The federal deregulation of natural gas has failed
 
   WHEREAS, Expenditures for natural gas in California will have
increased from $8 billion in 1999 to $13 billion in 2000, and to an
estimated $32 billion in 2001; and
   WHEREAS, These increases have had and will have devastating
impacts on residential, agricultural, and business natural gas users
and on the cost of generating electricity, and will have a
devastating impact on the California economy; and
   WHEREAS, In 1938, Congress enacted the National Gas Act to
regulate the sale of natural gas because it "considered that the
natural gas industry was heavily concentrated and that monopolistic
forces were distorting the market price for natural gas"; and
   WHEREAS, Congress' "primary aim ... was to protect consumers
against exploitation at the hands of natural gas companies" and to
ensure consumers "access to an adequate supply of gas at a reasonable
price"; and
   WHEREAS, By 1989, Congress had fully deregulated the sale of
natural gas at the wellhead; and
   WHEREAS, Interstate natural gas pipelines are still regulated
under the federal Natural Gas Act, with maximum pipeline
transportation rates being established by the Federal Energy
Regulatory Commission (FERC); and
   WHEREAS, By 1992, FERC (not Congress) deregulated natural gas
sales by wholesalers who use interstate natural gas pipelines, but
FERC said that it would entertain complaints about market misuse; and

   WHEREAS, Wholesalers of natural gas must pay the pipeline
transportation price that is less than or equal to the maximum
pipeline transportation rate established by FERC, but may charge more
than the FERC-established maximum pipeline transportation rate; and
   WHEREAS, California entities have filed complaints with FERC about
market misuse; and
   WHEREAS, Natural gas deregulation has worked in every state except
California, where spot natural gas costs at the California border
have skyrocketed, reaching $62 per MMBtu for natural gas in December
2000, while the wellhead price plus the maximum pipeline
transportation rates was about $5.50; now, therefore, be it
   Resolved, by the Assembly and Senate of the State of California,
jointly, That the President of the United States, the Congress of the
United States, and the Federal Energy Regulatory Commission are
urged to do all of the following:
   (a) Reestablish cost-based regulation of natural gas sales at the
California border by marketers or owners of pipelines.
   (b) Prohibit withholding of natural gas capacity on pipelines
entering California.
   (c) Require owners of each pipeline entering California to post on
the Internet on a daily basis the firm capacity available and the
name, address, and capacity used by each firm user of the pipeline.
   (d) Require marketers to post on the Internet the price and
quantity of each sale of natural gas at the California border. 
 and has had the effect of substantially increasing the cost
of gas to consumers; and
   WHEREAS, The federal deregulation of natural gas has been a major
contributing factor to the current energy crisis facing California;
and
   WHEREAS, Natural gas should be regulated or the price should be
temporarily fixed; and
   WHEREAS, The problem is not one faced only by California, but is a
concern of the entire national economy; and, therefore, be it
   Resolved by the Assembly and Senate of the State of California,
jointly, That the President and Congress of the United States are
urged to take swift and appropriate action to address the substantial
increase in the cost of natural gas resulting from federal
deregulation of natural gas; and be it further
   Resolved, That the Chief Clerk of the Assembly transmit copies of
this resolution to the President and Vice President of the United
States, and to each Senator and Representative from California in the
Congress of the United States.