BILL NUMBER: AB 2838	AMENDED
	BILL TEXT

	AMENDED IN SENATE  AUGUST 5, 2002
	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 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   interim rates that may be increased by an
amount equal to the rate of inflation as compared to existing rates
 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  executive director 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) 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.  
   (e) The provisions of this act should not be construed as
precedent for any other utility. 
  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   general rate case application of a water
corporation with greater than 10,000 service connections 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.  
application. 
   (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)   interim rates that may be increased by an
amount equal to the rate of inflation as compared to existing rates.
The interim rates shall be effective on the first day of the first
test year in the general rate case application.  These interim rates
shall be subject to refund and shall be adjusted upward or downward
back to the interim rate effective date, consistent with the final
rates adopted by the commission.  The commission may authorize lower
interim rates if the commission finds the rates to be in the public
interest.  If the presiding officer in the case determines that the
commission's decision cannot become effective on the first day of the
first test year due to actions by the water corporation, the
presiding officer or commission may require a different effective
date for the interim rates or final rates.
   (c)  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. 

   (d) The requirements of subdivisions (a) and (b) may be waived at
any time by mutual consent of the executive director of the
commission and the water corporation.