BILL ANALYSIS
AB 1234
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CONCURRENCE IN SENATE AMENDMENTS
AB 1234 (Pescetti)
As Amended August 7, 2002
Majority vote
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|ASSEMBLY: |78-0 |(August 29, |SENATE: |39-0 |(August 27, 2002) |
| | |2002) | | | |
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|COMMITTEE VOTE: |12-0 |(August 29, 2002) |RECOMMENDATION: |Concur |
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Original Committee Reference: U. & C.
SUMMARY : Permits an individual natural gas producer to acquire an
easement from a public utility.
The Senate Amendments
1)Permit an individual natural gas producer to acquire an easement
from a public utility.
2)Provide the easement shall be deemed to be held for a public
purpose if the Public Utilities Commission (PUC) finds the use is
in the public interest.
3)Require a public utility, within 10 days after applying to PUC
for an order authorizing the transfer of an easement, to provide
written notification of the application and of PUC's pending
review to each owner of real property affected by the easement.
EXISTING LAW :
1)Permits a cooperative association of natural gas producers to
acquire an easement from a public utility and provides the
easement shall be deemed to be held for a public purpose if PUC
finds the use is in the public interest.
2)Provides that easements held for public purposes revert to the
AB 1234
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grantor if the public purpose is abandoned.
AS PASSED BY THE ASSEMBLY , this bill required any gas corporation
that has entered into a specified settlement before the PUC to put
its historical gas gathering system to auction not later than April
30, 2002.
FISCAL EFFECT : Unknown
COMMENTS :
This bill was substantially amended in the Senate and the
Assembly-approved provisions of this bill were deleted. The
amended bill is inconsistent with Assembly actions on the bill.
Pacific Gas & Electric Company (PG&E) currently owns the gathering
lines used to transport natural gas from the production wells in
its service area to PG&E's main gas transmission system. According
to PG&E, it has 530 miles of gathering lines currently in
operation. Over the course of developing its natural gas delivery
system, PG&E secured easements in the form of rights-of-way to
allow these gathering lines to cross the property of others.
According to PG&E, none of these easements were acquired using
eminent domain; all were granted by the property owners under
varying terms and conditions.
PUC decisions associated with the deregulation of the natural gas
industry have encouraged the divestiture of PG&E's gathering lines.
In a 1989 decision, PUC authorized rates that allowed PG&E to
amortize its investments in gathering lines in eight years. In
1996, PUC approved a settlement between PG&E and gas producers,
which contemplated that PG&E's lines would be sold to the gas
producers who used them.
This bill allows a private gas producer purchasing a public
utility's gas facility to also acquire the underlying easement, and
allows the easement to retain its public purpose status if the PUC
finds its use is in the public interest. Absent this bill, many
easements associated with a gathering line purchased by a private
gas producer would likely revert to the property owner, thus
requiring the gas producer to negotiate a new easement with the
property owner on terms less favorable to the producer.
AB 1234
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Analysis Prepared by : Paul Donahue / U. & C. / (916) 319-2083
FN: 0007894