BILL ANALYSIS
AB 1235
Page A
CONCURRENCE IN SENATE AMENDMENTS
AB 1235 (Leslie)
As Amended August 14, 2002
Majority vote
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|ASSEMBLY: | |(May 17, 2001) |SENATE: |39-0 |(August 19, 2002) |
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(vote not relevant)
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|COMMITTEE VOTE: |12-0 |(August 23, 2002) |RECOMMENDATION: |Concur |
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Original Committee Reference: U. & C.
SUMMARY : Exempts four Truckee River hydroelectric projects and two
hydroelectric projects located on the Naches River in the State of
Washington from the prohibition on sales of electric generating
facilities by a public utility that is in effect until January 1,
2006.
The Senate amendments delete the Assembly version of the bill and
instead:
1)Exempt four run-of-river hydroelectric project works located on
the Truckee River and two run-of-river hydroelectric projects in
the State of Washington from laws prohibiting public utility
sales of electric generation facilities.
2)Declare that a special statute is necessary because a statute of
general applicability cannot be enacted under the circumstances.
3)Add an urgency clause.
EXISTING LAW prohibits any public utility from disposing of a
facility for the generation of electricity prior to January 1,
2006.
AS PASSED BY THE ASSEMBLY , this bill among other things prohibited
certain switching of specified core gas transportation services
AB 1235
Page B
unless the customer agreed, in writing, to remain on core natural
gas service for a minimum period of one year.
FISCAL EFFECT : Unknown
COMMENTS : Public Utilities Code Section 851 requires a public
utility to obtain Public Utilities Commission (PUC) approval prior
to selling utility property that is "necessary or useful" to the
utility as it performs its duties to the public.
AB 6X (Dutra), Chapter 2, Statutes of 2001, prohibits the sale of
any public utility-owned power plant until January 1, 2006, and
requires, in any event, that the PUC ensure that generation assets
remain dedicated to service for the benefit of California
ratepayers.
In 1999, Sierra Pacific Power (SPP) merged with Nevada Power and
became the largest utility in the State of Nevada. In approving
the merger, the Public Utilities Commission of Nevada (PUCN) and
the Federal Energy Regulatory Commission (FERC) ordered SPP to
divest themselves of electric generation assets to avoid the
potential for them to exercise market power as a result of the
merger.<1> Thus, SPP agreed to sell off its municipal water
system, which serves Reno and Sparks. Among the assets in the
system are four hydroelectric facilities,<2> one in California<3>
and three in Nevada. If the sale of these assets to the Truckee
Meadows Water Authority is completed, it will also serve to
essentially complete the final steps needed to make the Truckee
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<1> PUCN and FERC have jurisdiction over 95 percent of SPP's
electric generation assets.
<2> The total electric output from these facilities is about 10
megawatts, a very small portion of the load in the service area.
<3> The hydroelectric facility in California was destroyed during
recent floods, but the sale agreement requires SPP to repair the
facility in California.
AB 1235
Page C
River Operating Agreement (TROA) become operative.<4>
The other PUC-regulated electric utility whose principal place of
business is currently outside the state is PacificCorp, an
Oregon-based company that serves Del Norte and Siskiyou Counties in
Superior California. This bill also permits PacificCorp to sell
its hydroelectric assets located in the State of Washington,
notwithstanding the prohibition in AB 6X (Dutra).
The Bonneville Power Administration (BPA), in a cost-sharing
arrangement with the U.S. Bureau of Reclamation (USBOR), has set a
high priority on the purchase of the water rights for
Wapatox/Naches Power Plant diversions from the Naches River for the
benefit of anadromous fish species.<5> The acquisition of these
assets by project serves several purposes from a biological
perspective, is a cost share between USBOR and BPA, was a
recommended project in the 1994 U.S. Fish and Wildlife Plan, has
been approved by Yakima Nation and is part of the Tribal Recovery
Plan. The Washington State Department of Fish and Wildlife,
Washington Department of Ecology, as well as USBOR and BPA supports
the project and sale.
Analysis Prepared by : Paul Donahue / U. & C. / (916) 319-2083
FN: 0007127
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<4> The TROA encompasses interstate allocation of water on Lake
Tahoe, and the Carson and Truckee Rivers. Among other things, the
TROA allows California to make use of its Truckee River Basin water
allocation, and permits California to store part of its Truckee
River allocation in federal reservoirs for environmental,
industrial and municipal use.
<5> Anadromous fish are born in fresh water, migrate to the ocean
to grow into adults, and then return to fresh water to spawn, and
include Salmon, Steelhead Trout, Pacific Cod and Pacific Herring.