BILL NUMBER: AB 1031	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Canciamilla

                        FEBRUARY 23, 2001

   An act relating to public utilities.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1031, as introduced, Canciamilla.  Natural gas supplies.
   Existing uncodified law urges the Public Utilities Commission to:
(a) expeditiously unbundle public utility gas storage  service, (b)
encourage the development of independent gas storage by establishing
interconnection rules and modifying cost allocations, (c) allow
market-based storage rates, (d) give expedited consideration of
applications for certificates of public convenience and necessity
filed by independent storage providers, and (e) ensure that storage
costs borne by core customers are commensurate with benefits.  That
law requests the commission to report to the Legislature on or before
July 1, 1993, explaining the steps taken to foster the development
of a competitive natural gas storage market.  Under its existing
ratemaking authority, the commission has issued several decisions to
increase competition in the gas industry that remove the
subsidization of utility-provided noncore natural gas storage
services with revenue from sources other than noncore customers,
adopt market-based rates for noncore storage, and permit other
nonutility companies to develop storage facilities in competition
with existing public utilities.
   This bill would make legislative findings and declarations with
respect to natural gas price increases and the intent of the
Legislature to address the long term risks of high natural gas prices
by reducing California's dependence in winter months on out-of-state
gas supplies and passing comprehensive legislation to increase
in-state natural gas pipeline capacity, increase in-state natural gas
storage, and increase the amount of natural gas produced within the
state.
   Vote:  majority.  Appropriation:  no.  Fiscal committee:  no.
State-mandated local program:  no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  The Legislature finds and declares all of the
following:
   (a) The price of natural gas for residential customers in this
state has fluctuated by as much as 200 percent since October 2000.
   (b) This fluctuation is the result of exorbitant wholesale prices
for natural gas at the California border, which have been as much as
800 times higher than the price paid for the same gas at marketing
hubs.
   (c)  These high prices for natural gas pose a major threat to the
economy and the quality of life in this state, as major industrial
users of natural gas will be forced to scale back production due to
high natural gas bills and lay off employees, other producers will be
forced to raise retail prices, and low-income residential natural
gas customers will be forced to turn off their heat, or will be
unable to pay their bills.
   (d) It is the intent of the Legislature to address the long term
risks of high natural gas prices by reducing California's dependence
in winter months on out-of-state gas supplies and passing
comprehensive legislation that will increase in-state natural gas
pipeline capacity, increase in-state natural gas storage, and
increase the amount of natural gas produced within the state.