BILL NUMBER: AB 2838	AMENDED
	BILL TEXT

	AMENDED IN SENATE  JUNE 19, 2002
	AMENDED IN ASSEMBLY  APRIL 1, 2002

INTRODUCED BY   Assembly Member Canciamilla

                        FEBRUARY 25, 2002

   An act to add Section 455.2 to the Public Utilities Code, relating
to public utilities.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 2838, as amended, Canciamilla.  Water rates.
   Existing law requires the Public Utilities Commission to establish
rates for water corporations.  
   This bill would require the commission to follow a certain
procedure when a water corporation files with the commission,
pursuant to the commission's rate case plan for general rate increase
applications or pursuant to an advice letter submitted in accordance
with commission procedures, a schedule stating rates,
classifications, contracts, practices, or rules for the service of
water.  
   This bill would require the commission to issue a final decision,
within a specified timeframe, on a water corporation's application
for a general rate increase pursuant to the commission's rate case
plan for general rate increase applications.  The bill would
authorize the applicant to file a tariff implementing new rates
sufficient to recover 75% of the rate increase requested in the
application if the commission decision is not effective in accordance
with the specified timeframe.  The bill would require the commission
to establish a schedule to require every water corporation that is
subject to the rate case plan for water corporations to file an
application pursuant to the plan every 3 years.  The bill would
provide that its provisions may be waived at any time by mutual
consent of the commission and the water corporation. 
   Vote:  majority.  Appropriation:  no.  Fiscal committee:  yes.
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) Water corporations are currently faced with and will continue
to be faced with the following:  
   (a) The rate case plan for water corporations adopted by the
Public Utilities Commission in Decision No. 90-08-045 has not been
updated or revised to reflect statutes adopted since its promulgation
in 1990.
   (b) It is in the public's interest to provide a certain but
flexible schedule for investigating and addressing rate changes
proposed by water corporations.
   (c) Not later than December 31, 2003, the commission should review
and revise, as appropriate, the rate case plan for water
corporations adopted by Decision No. 90-08-045 to ensure its
consistency with relevant statutes and commission practice in
addressing rate applications by water corporations.
   (d) Whenever a water corporation files an application for a rate
change pursuant to the rate case plan for water corporations, the
commission should render a decision consistent with the schedule
established in the plan.
  SEC. 2.  Section 455.2 is added to the Public Utilities Code, to
read:
   455.2.  (a) The commission shall issue its final decision on a
water corporation's general rate case application in a manner that
ensures that the commission's decision becomes effective on the first
day of the first test year in the general rate increase application
for applicants filing in January, or on the first day of June of the
first test year in the general rate increase application for
applicants filing in July.
   (b) If the commission's decision is not effective in accordance
with subdivision (a), the applicant may file a tariff implementing
new rates sufficient to recover 75 percent of any increase in revenue
requirement requested in its application.  Any recovery of
additional revenue requirement shall be subject to refund to the
extent that it is inconsistent with the final decision of the
commission.
   (c) The rate schedules for a water corporation that files a tariff
pursuant to subdivision (b) shall become effective on the first day
of the first test year in the general rate increase application for
applicants filing in January, or on the first day of June of the
first test year in the general rate increase application for
applicants filing in July.
   (d) The commission shall establish a schedule to require every
water corporation subject to the rate case plan for water
corporations to file an application pursuant to the plan every three
years.  The plan shall include a provision to allow the filing
requirement to be waived upon mutual agreement of the commission and
the water corporation.
   (e) The requirements of this section may be waived at any time by
mutual consent of the commission and the water corporation. 

   (1) The need to devote ever increasing resources, time, and
capital to secure and protect their public water supplies and public
water systems from sabotage, infection, contamination, damage, or
interference by terrorists, or threats of terrorists.
   (2) The need to design, construct, and operate water system
infrastructure, plants, and facilities, using the best available
technologies, to comply with increasingly stringent state and federal
safe drinking water laws and resolutions.
   (3) The need to develop new sources of supply, make existing
sources of supply safe, secure, and more reliable, and encourage and
implement water conservation measures, including water reclamation
and reuse.
   (4) The need to replace or upgrade water infrastructure, plants,
and facilities to meet the governing fire flow standards for public
fire protection purposes and to protect the public health and safety.

   (b) The Public Utilities Commission needs to act timely in making
determinations and establishing rates for water service so that water
corporations can meet their obligation to provide their ratepayers
with safe, secure, and reliable water service.
  SEC. 2.  Section 455.2 is added to the Public Utilities Code, to
read:
   455.2.  Whenever a water corporation files with the commission,
pursuant to the commission's rate case plan for general rate increase
applications or pursuant to an advice letter submitted in accordance
with commission procedures for this means of submission, a schedule
stating rates, classifications, contracts, practices, or rules for
the service of water, the commission shall observe the following
procedures:
   (a) Except as provided in subdivisions (b) and (c), the schedule,
as filed, shall become effective, on an interim basis subject to
refund, 214 days following the date the application was filed
pursuant to the commission's rate case plan for general rate increase
applications or 40 days following the filing of the schedule
pursuant to an advice letter.
   (b) If, upon its own initiative, the commission, acting through
the staff organization with responsibility for reviewing general rate
case applications or advice letter filings, determines that the
schedule filed by a water corporation is not justified, it shall
notify the water corporation of the determination in writing 99 days
from the date of filing of an application and 30 days from the date
of filing of the schedule pursuant to an advice letter and shall
state in the notice all changes to the schedule that are required to
make it just and reasonable in the opinion of the staff organization.
  Upon the filing of a revised schedule by the water corporation
within 10 days of receipt of the notice from the commission, acting
through the staff organization, incorporating all changes specified
in the notice, the revised schedule shall become effective, on an
interim basis not subject to refund, upon the expiration of five days
from the date of the refiling.
   (c) If the commission, acting through the staff organization,
files a notice of changes as provided in subdivision (b), the
commission shall set the matter for a hearing on the application or
advice letter to be held within a reasonable time from the date of
the notice.  The revised schedule shall become final upon commission
action approving the revised schedule or otherwise as the commission
finds to be just and reasonable.