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