BILL ANALYSIS
AB 2838
Page A
Date of Hearing: April 15, 2002
ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
Roderick D. Wright, Chair
AB 2838 (Canciamilla) - As Amended: April 1, 2002
SUBJECT : Water rates.
SUMMARY : Requires the California Public Utilities Commission
(PUC) to follow certain procedures in regard to water rate
schedule filings. Specifically, this bill :
1)Provides that a general water rate increase schedule shall
become effective as filed on an interim basis, subject to
refund, 214 days following the date on which the application
was filed, or after 40 days if the schedule was filed by way
of an advice letter.
2)Specifies that if PUC in its final decision revises the rates
downward from what was filed, the amount collected above the
approved rate increase would be refunded to the ratepayer.
3)If PUC determines that the schedule is not justified, it must
so notify the water corporation in writing within 99 days from
the date of filing of the schedule application, or within 30
days if the schedule was filed by advice letter.
4)Requires the "not justified" notice from PUC to indicate all
changes to the rate schedule that are required in PUC's
opinion. If the water corporation revises its schedule in
accordance with the notice, the re-filed rate schedule becomes
final, and effective within 5 days from the date of re-filing.
5)Requires PUC to set a rate schedule it deems not justified for
hearing within a reasonable time.
EXISTING LAW :
1)Requires PUC to establish rates for water corporations.
2)Authorizes PUC to adopt rules of practice and procedure.
FISCAL EFFECT : Unknown.
COMMENTS :
AB 2838
Page B
PUC adopted a rate case plan (RCP) for Class A water
corporations<1> in 1990 to promote timely resolution of such
cases. RCP permits Class A water corporation general rate case
applications once every three years, and allows minor rate
increases to be filed by way of advice letter.
RCP schedule summary establishes the time frame for the rate
case process, from the filing of the Notice of Intent to PUC
final order. PUC schedule contemplates issuance of a final
order within 214 - 259 days after filing of the application,
depending on the number of districts included in the filing.
Most water companies experienced significant increases in
electric costs in 2001, approximately 50% in some instances.
Some water districts had difficulty getting PUC to accept offset
rate increase requests to recover these higher power costs.
Author's intent
The provisions enacted in this bill should create an incentive
for PUC to complete ratemaking cases according to the timetables
it has itself established. Although the water company must
assume some risk by charging its proposed rate on an interim
basis while it awaits PUC approval, it enables the company to
cover infrastructure and operating costs when needed.
The author and sponsor state that PUC has often failed to adhere
to its deadlines and practice rules.
REGISTERED SUPPORT / OPPOSITION :
Support
California Water Association (sponsor)
Opposition
None on file.
Analysis Prepared by : Paul Donahue / U. & C. / (916) 319-2083
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<1> Class A water corporations are those with more than 10,000
service connections.
AB 2838
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