BILL ANALYSIS AB 1031 Page 1 Date of Hearing: May 7, 2001 ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE Roderick D. Wright, Chair AB 1031 (Canciamilla) - As Amended: May 1, 2001 SUBJECT : Natural Gas Supplies. SUMMARY : This bill requires the California Public Utilities Commission (CPUC) to report to the Legislature by January 1, 2004 and every two years thereafter, a 10 year forecast of demand for natural gas in the state. Specifically this bill: Requires the forecast presented by CPUC 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 LAW : Establishes the California Public Utilities Commission (CPUC) and authorizes CPUC to regulate every public utility in the state, including every gas corporation. FISCAL EFFECT : Unknown. COMMENTS : This bill requires CPUC to issue a report by January 1, 2004, and every two years thereafter, that forecasts the demand for natural gas in the state. This bill requires such a report to incorporate an analysis of long term trends in natural gas demand in the state and to evaluate a wide variety of natural gas demand scenarios. Similar Legislation: AB 1445, which passed out of this committee on April 26, 2001, requires CPUC to determine, on or before January 1, 2002, whether the natural gas infrastructure in California is adequate to meet both core and non-core customer demand without service curtailment requirements for at least five years. AB 1445 also requires CPUC to evaluate storage and pipeline capacity to meet peak natural gas demand, expected changes in electric patterns over a ten year period impacting natural gas demand, and infrastructure utilization study for the past ten years in AB 1031 Page 2 California and other areas. The study required by AB 1031 and the study and actions required in AB 1445 should be complementary. It is most efficient to conduct any additional demand forecasting studies at CPUC in consort with the capacity and demand forecasting required by AB 1445 and in conjunction with rate-setting proceedings at CPUC. The provisions of AB 1445 are more detailed, and are end product oriented toward finding solutions to the natural gas supply and price crisis the state is currently experiencing. Augmenting AB 1445's studies and requirements with the demand forecasting required by AB 1031 would provide a broader overall picture of California's natural gas situation. The demand forecasting will also better enable CPUC rate design efforts for gas corporations going forward and allow for demand estimate adjustments over time. REGISTERED SUPPORT / OPPOSITION : Support None on file. Opposition None on file. Analysis Prepared by : Kelly Boyd / U. & C. / (916) 319-2083