BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 1234
                                                                  Page  1

          ASSEMBLY THIRD READING
          AB 1234 (Pescetti)
          As Amended May 3, 2001
          Majority vote

           UTILITIES AND COMMERCE     15-0 APPROPRIATIONS      19-0        
           
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          |Ayes:|Wright, Pescetti,         |Ayes:|Migden, Bates, Alquist,   |
          |     |Calderon, Bill Campbell,  |     |Aroner, Ashburn, Cedillo, |
          |     |John Campbell,            |     |Correa, Daucher,          |
          |     |Canciamilla, Cardenas,    |     |Goldberg, Maldonado,      |
          |     |Diaz, Jackson, Kelley,    |     |Robert Pacheco, Papan,    |
          |     |Leonard, Maddox, Papan,   |     |Pavley, Runner, Thomson,  |
          |     |Reyes, Wesson             |     |Wesson, Wiggins, Wright,  |
          |     |                          |     |Zettel                    |
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          SUMMARY  :  Adds Public Utilities Code Section 857 to require gas  
          corporations to put gas gathering lines that have been retired  
          but are still functional to auction by December 31, 2001.

           EXISTING LAW  prohibits public utilities from transferring or  
          encumbering, in whole or in part, any property necessary or  
          useful in performance of its duties to the public without prior  
          authorization from the California Public Utilities Commission  
          (CPUC). 

           FISCAL EFFECT  :  Unknown

           COMMENTS  :  This bill contains provisions formerly contained in  
          ABX1 117 (Pescetti), pending in the Assembly, regarding  
          auctioning of gas gathering lines.  AB 1234 defines gas  
          gathering lines as pipelines that transport liquid hydrocarbons  
          between multiple wells, testing facilities, treating and  
          production facilities, storage facilities or custody transfer  
          facilities.  AB 1234 requires gas corporations to obtain  
          approval of CPUC prior to retiring any portion of their gas  
          gathering systems, and requires gas corporations to put retired  
          but still functional gas lines to auction by December 31, 2001.

          This bill allows the retired, functional lines to be placed into  
          service by other providers to augments the gas distribution  
          system in California and alleviate some of the strain on gas  
          supply which is believed to have contributed to skyrocketing  








                                                                  AB 1234
                                                                  Page  2

          natural gas prices.  This bill allows CPUC to determine the  
          manner, terms and conditions of the auctions, to keep these  
          parameters within CPUC's purview.  This bills' provisions ensure  
          that no lines will be prematurely retired and that terms for  
          auction of lines or for any ratemaking or other considerations  
          under the jurisdiction of CPUC shall remain within that agency. 

           
          Analysis Prepared by  :  Kelly Boyd / U. & C. / (916) 319-2083 



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