BILL NUMBER: AJRX1 1	CHAPTERED
	BILL TEXT

	RESOLUTION CHAPTER  1
	FILED WITH SECRETARY OF STATE  MAY 11, 2001
	ADOPTED IN ASSEMBLY  MAY 7, 2001
	ADOPTED IN SENATE  MAY 3, 2001
	AMENDED IN SENATE  APRIL 25, 2001
	AMENDED IN ASSEMBLY  APRIL 16, 2001
	AMENDED IN ASSEMBLY  MARCH 27, 2001

INTRODUCED BY   Assembly 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, Cardoza.  Natural gas.
   This measure would urge the President, the Congress of the United
States, and the Federal Energy Regulatory Commission to take certain
actions to address the substantial increase in the cost of natural
gas resulting from federal deregulation of natural gas.
   The measure would also urge the Chairman of the Federal Energy
Regulatory Commission to immediately place the issue of cost-based
caps of natural gas on the commission agenda and allow it to be voted
on, and would urge the President of the United States to meet with a
bipartisan coalition of California legislators to discuss the energy
crisis facing the western states that threatens the national
economy.




   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, In 2000, FERC removed price controls on the sale of
natural gas pipeline capacity by marketers, retained price controls
on the sale of natural gas pipeline capacity by owners of pipelines,
and said that FERC 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 were 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 ; and be it further
   Resolved, That the Legislature urges the Chairman of the Federal
Energy Regulatory Commission to immediately place the issue of
cost-based caps of natural gas on the commission agenda and allow it
to be voted on; and be it further
   Resolved, That the Legislature urges the President of the United
States to meet with a bipartisan coalition of California legislators
to discuss the energy crisis facing the western states that threatens
the national economy.