BILL NUMBER: AB 1031 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY MAY 1, 2001
INTRODUCED BY Assembly Member Canciamilla
FEBRUARY 23, 2001
An act to add Section 776 to the Public Utilities Code,
relating to public utilities.
LEGISLATIVE COUNSEL'S DIGEST
AB 1031, as amended, Canciamilla. Natural gas supplies.
Existing law establishes the Public Utilities
Commission and authorizes the commission to supervise and regulate
every public utility in the state, including every gas corporation,
that provides a service or a commodity to the public.
This bill would require the commission to report to the
Legislature by January 1, 2004, and every 2 years thereafter, the
10-year forecast of the demand for natural gas in the state. The
bill would require that forecast to analyze long-term trends in
natural gas demand in the state and to evaluate a wide variety of
natural gas demand scenarios, including, but not limited to, average
conditions, and best- and worst-case scenarios.
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 yes . State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. (a) The Legislature finds and declares all
of the following:
(a) The price of natural gas for residential customers in this
(1) Past predictions by the Public Utilities Commission regarding
demand levels for natural gas in the state have underestimated the
actual demand.
(2) The incorrect estimates of the actual demand for natural gas
may have led to a failure to adequately plan for peak demands in the
state, by assuring that the existing natural gas infrastructure in
the state could meet those peak demands.
(3) The incorrect estimates may lead to higher natural gas prices,
as infrastructure limitations may lead to an imbalance between the
demand and supply of natural gas.
(b) It is the intent of the Legislature in enacting this act to do
both of the following:
(1) Promote more reliable projections of the demand for natural
gas in the state.
(2) Encourage any agency in the state that forecasts natural gas
demand in the future to make those projections based on a wide
variety of potential scenarios and conditions in the state.
SEC. 2. Section 776 is added to the Public Utilities Code, to
read:
776. By January 1, 2004, and every two years thereafter, the
commission shall report to the Legislature the 10-year forecast of
the demand for natural gas in the state. The forecast shall do both
of the following:
(a) Analyze long-term trends in natural gas demand in the state.
(b) Evaluate a wide variety of natural gas demand scenarios,
including, but not limited to, average conditions, and best- and
worst-case scenarios. 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.