BILL NUMBER: AB 1350 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY APRIL 25, 2001
AMENDED IN ASSEMBLY APRIL 19, 2001
INTRODUCED BY Assembly Member Canciamilla
(Coauthor: Assembly Member Pescetti)
FEBRUARY 23, 2001
An act to amend Sections 785, 785.1, and 785.5, of the
Public Utilities Code, relating to energy, and declaring
the urgency thereof, to take effect immediately.
LEGISLATIVE COUNSEL'S DIGEST
AB 1350, as amended, Canciamilla. Natural gas: producers
: hookup: gas corporation .
(1) The California Gas Policy Act requires the Public Utilities
Commission, among other things, to encourage as a first priority the
increased production of gas in this state, as specified. The act
also makes it the policy of the state that natural gas produced in
this state is not placed at an unfair economic disadvantage relative
to gas from sources outside of the state as the result of any
transportation tariffs or conditions of service.
This bill would make technical nonsubstantive changes in
those provisions. The bill would state Legislative
legislative findings and declarations regarding
the need for increased natural gas production in California.
(2) This bill would declare that it is to take effect immediately
as an urgency statute.
Vote: 2/3. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. The Legislature finds and declares all of the
following:
(a) California is one of the largest producers of oil and natural
gas in the nation.
(b) Natural gas is a critical commodity necessary to electrical
production, residential heating, commodity production, and industrial
manufacturing.
(c) California has historically produced up to 25 percent of its
total natural gas needs.
(d) It is in the long-term economic interest of the state to
encourage and increase the amount of natural gas produced in
California.
(e) A process should be established governing the timely
connection in California of new standard wells, including those
proposed for connection through an existing meter, and nonstandard
wells to increase in-state natural gas production.
(f) Standard wells should be defined as wells that produce gas
supplies that meet the minimum pipeline quality standards established
by a gas corporation.
(g) Nonstandard wells should be defined as wells that produce gas
that does not meet the minimum pipeline quality standards established
by a gas corporation.
(h) An expedited arbitration process to oversee and resolve any
disputes resulting from the implementation of the process governing
timely connection of natural gas wells should be established.
SEC. 2. Section 785 of the Public Utilities Code is amended to
read:
785. (a) To the extent consistent with federal law and regulation
and contractual obligations regarding other available gas, the
commission shall, in consultation with the Division of Oil and Gas of
the Department of Conservation and with the State Energy Resources
Conservation and Development Commission, encourage, as a first
priority, the increased production of gas in this state, including
gas produced from that area of the Pacific Ocean along the coast of
California commonly known as the outer continental shelf, and shall
require, after a hearing, every gas corporation to purchase gas that
is compatible with the corporation's gas plant and that is produced
in this state having an actual delivered cost, measured in equivalent
heat units, equal to or less than other available gas, unless this
requirement will result in higher overall costs of gas or other
consequences adverse to the interests of gas customers.
(b) The commission shall annually report to the Legislature on its
implementation of this section.
SEC. 3. Section 785.1 of the Public Utilities Code is amended to
read:
785.1. (a) The commission shall require, after a hearing, every
gas corporation to revise its transportation tariffs and conditions
of service to eliminate all components that assess shippers of gas
produced in California for the costs of interstate transmission of
gas produced outside of this state. These revisions shall eliminate
direct or indirect charges for the interstate transportation of gas
produced outside of this state, commonly referred to as "double
demand" charges.
(b) The commission shall consider and approve tariffs consistent
with subdivision (a) on or before October 1, 1994.
(c) Nothing in this section shall be construed to prohibit the
commission from approving intrastate transmission tariffs that
include interstate transition cost surcharges, as described in
commission decisions 91-11-025 and 92-07-025, in an appropriate
manner.
SEC. 4. Section 785.5 of the Public Utilities Code is amended to
read:
785.5. (a) The commission shall require every gas corporation to
adopt and pursue purchasing and procurement practices that assure its
customers the lowest rates consistent with security of supply and
with Section 785.
(b) Pursuant to subdivision (a), the commission may establish and
periodically revise the guidelines for each gas corporation for
priorities among suppliers and sources of supply of gas to gas
corporations, taking into consideration the requirements of Section
785. The establishment of these guidelines does not relieve a gas
corporation of any requirement to make reasonable and prudent
purchases of gas or diminish the authority of the commission to
review the reasonableness of any purchase or procurement decision of
the corporation.
SEC. 5.
SEC. 2. This act is an urgency statute necessary for the
immediate preservation of the public peace, health, or safety within
the meaning of Article IV of the Constitution and shall go into
immediate effect. The facts constituting the necessity are:
In order to ensure, at the earliest possible time, the sufficient
availability of affordable natural gas necessary for electrical
production, residential heating, commodity production, and industrial
manufacturing, it is necessary for this act to take effect
immediately.