BILL ANALYSIS                                                                                                                                                                                                              1
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                SENATE ENERGY, UTILITIES AND COMMUNICATIONS COMMITTEE
                               DEBRA BOWEN, CHAIRWOMAN
          

          AB 1031 -  Canciamilla                            Hearing Date:   
          June 26, 2001                   A
          As Amended:         May 14, 2001             FISCAL       B

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                                      DESCRIPTION
           
           Existing law  requires the California Energy Commission (CEC) to  
          prepare a biennial report that includes a description of  
          emerging trends in the use of natural gas, including long-range  
          forecasts of natural gas demand.

           This bill  requires the California Public Utilities Commission  
          (CPUC), by January 1, 2004, and every two years thereafter, to  
          report to the Legislature the 10-year forecast of natural gas  
          demand, including best- and worst-case scenarios, and the impact  
          of increasing renewable resources.

                                      BACKGROUND
           
          Currently, the CEC is required under the Warren-Alquist Act to  
          submit a biennial fuels report to the Governor and the  
          Legislature that includes a description of emerging trends in  
          the use of natural gas.  The report is required to include  
          long-range forecasts of natural gas demand from retail  
          consumers, electrical generation and transportation.  The CPUC  
          is required to review and comment on the report as it relates to  
          its jurisdiction.

          Separately, the CPUC adopts a biennial forecast of natural gas  
          demand for each utility it regulates in order to set rates.  The  
          CPUC also requires each utility to prepare an annual natural gas  
          report.  These reports include historical gas demand and  
          long-term (i.e., 20-year) forecasts of gas demand.  The CPUC may  
          use these forecasts for long-term planning purposes, such as  
          determining the need for infrastructure additions to ensure  










          adequate service.

                                       COMMENTS
           
           1)Dueling Forecasts?   This bill is intended to compel the  
            preparation of a statewide forecast of natural gas demand by  
            the CPUC.  Currently, the scope of CPUC's involvement in  
            forecasting gas demand is limited to ensuring adequate service  
            and setting rates for each of the utilities it regulates.  













































            Preparation of statewide demand forecast seems more aligned  
            with the  planning  function of the CEC, rather than the  
             regulatory  function of the CPUC.  In fact, there is an  
            existing statutory requirement for a CEC-prepared gas demand  
            forecast similar to the one contemplated by this bill.  

            To the extent the additional specific considerations in this  
            bill are desired (an assessment of best- and worst-case  
            scenarios and the impact of increasing renewable resources),  
             the author and the committee may wish to consider  amending the  
            requirement for the existing CEC report (Public Resources Code  
            Section 25310) to include these considerations, instead of  
            establishing a separate and somewhat duplicative requirement  
            for the CPUC.  

                                   ASSEMBLY VOTES
           
          Assembly Floor                     (74-0)
          Assembly Appropriations Committee  (21-0)
          Assembly Utilities and Commerce Committee                       
          (16-0)


                                       POSITIONS
           
           Sponsor:
           
          Author

           Support:
           
          None on file

           Oppose:
           
          None on file

          





















          Lawrence Lingbloom 
          AB 1031 Analysis
          Hearing Date:  June 26, 2001