BILL ANALYSIS
AB 1350
Page A
CONCURRENCE IN SENATE AMENDMENTS
AB 1350 (Canciamilla)
As Amended April 16, 2002
2/3 vote. Urgency
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|ASSEMBLY: | |(May 17, 2001 |SENATE: |32-0 |(May 2, 2002) |
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(vote not relevant)
COMMITTEE VOTE : 13-0 (May 6, 2002) RECOMMENDATION : concur
Original Committee Reference: U. & C.
SUMMARY: Allows a competitive natural gas storage company to condemn
property using eminent domain power without first having to obtain a
separate finding from the California Public Utilities Commission (PUC)
that the action would serve the public interest.
The Senate amendments delete the Assembly version of this bill, and
instead:
1)Authorize a gas corporation to acquire property by eminent domain to
compete with another entity, as long as the gas corporation files an
eminent domain complaint in superior court by October 31, 2002 as to
that property.
2)Allow a gas corporation to bring that eminent domain action
notwithstanding existing law that requires PUC to find that the
proposed action would serve the public interest.
3)Make this bill inoperative on October 31, 2002, and repeal it as of
April 1, 2003.
4)Add an urgency clause.
EXISTING LAW :
1)Permits a gas corporation public utility to condemn any property
necessary for the construction and maintenance of its gas plant.
2)Prohibits certain public utilities that offer competitive services
from condemning property for the purpose of competing with another
entity, unless PUC finds that the action would serve the public
interest.
AB 1350
Page B
3)Provides that no public utility shall begin the construction or
expansion of a line or plant without first obtaining a PUC
certificate that the public convenience and necessity (CPCN)
requires it.
4)Provides that, until June 1, 2002, a gas company may exercise the
power of eminent domain to condemn property for the purpose of
competing with another entity in the offering of natural gas and
related services, notwithstanding any law to the contrary.
AS PASSED BY THE ASSEMBLY , this bill stated legislative findings and
declarations regarding the need for increased natural gas production
in California, and that PUC should use its dispute resolution process
to resolve disputes relating to connection of natural gas wells.
FISCAL EFFECT : Unknown
COMMENTS :
1)This bill exempts Wild Goose Storage Inc., from a law requiring a
separate hearing before PUC for expansion of its storage facilities.
A similar exemption was provided to another company, Lodi Gas
Storage, last year.
2)The regulatory process: When a gas, electric or water company seeks
to build or expand a facility, such as Wild Goose's gas storage
project, PUC reviews the proposal to determine if CPCN requires it.
If PUC issues a CPCN, but the project involves condemnation of
property, the person seeking to exercise eminent domain power must
establish public interest, necessity, and that the project will be
completed with the least public injury and the greatest public good.
SB 177 (Peace), Chapter 774, Statutes of 1999, codified as Public
Utilities Code Section 625, requires companies, other than the
regulated monopolies, to establish essentially the same necessity
and public interest to PUC before they can condemn property for a
new or expanded project.
Wild Goose sponsored AB 21 X2 (Canciamilla), Chapter 14, Statutes of
2001, which added Public Utilities Code Section 625.5, clarifying
that the Section 625 proceeding does not apply to a condemnation by
a gas or electric company when PUC already has issued a CPCN for the
project, or for the expansion of a project for which a CPCN already
has been granted.
However, Wild Goose is seeking its CPCN simultaneously with its
AB 1350
Page C
eminent domain action so it can be ready for a shortened June-August
construction period. Thus, the new Section 625.5 will not exempt
Wild Goose from the Section 625 review as it attempts to proceed
with expansion this year.
3)Purpose of this bill: As Wild Goose pursued AB 21 X2 last year,
another private gas storage company, Lodi Gas Storage, obtained a
direct exemption from the additional requirements of Section 625 by
enactment of SB 28 X1 (Sher), Chapter 14, Statutes of 2001. That
exemption expires on June 1, 2002.
Due to the time constraints<1> on Wild Goose's underground gas storage
expansion project, however, it will not be able to begin expansion
of its facility until at least mid-June and it must be completed by
the end of August. Accordingly, this bill would restate the
exemption language of SB 28 X1, extending its expiration date to
October 31, 2002, and further would narrow the exemption to apply
only to utilities that have filed a complaint in eminent domain on
or before October 31, 2002.
This bill takes effect immediately as an urgency statute. If it
passes, Wild Goose believes it could begin condemnation proceedings
as soon as PUC approves its CPCN to expand its storage facility,
which the company expects to occur in June. Without this bill, Wild
Goose believes it will not be able to expand its facility until
2004.
This bill was substantially amended in the Senate and the
Assembly-approved provisions of this bill were deleted, and the
amended bill is inconsistent with Assembly actions on the bill.
Analysis Prepared by : Paul Donahue / U. & C. / (916) 319-2083 FN:
0004564
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<1> The facility is located in the Butte County city of Gridley, in a
wetland area, under a rice field that serves as a waterfowl sanctuary
during the winter. Due to weather, rice planting, and bird migration
timetables, the window for any construction or expansion at the
facility is only a little over two months long, from mid-June to late
August.