BILL ANALYSIS
AB 2838
Page 1
Date of Hearing: April 24, 2002
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Darrell Steinberg, Chair
AB 2838 (Canciamilla) - As Amended: April 1, 2002
Policy Committee: Water, Parks, and
Wildlife Vote: 18-0
Utilities and Commerce 15-0
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill requires the Public Utilities Commission (PUC) to meet
certain timelines regarding 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, but subject to
refund depending on the PUC's final decision:
a) 214 days following the date on which the application was
filed with the PUC or ,
b) 40 days following the date that the schedule was filed
by way of an advice letter.
2)Provides that, if the PUC determines that the schedule is not
justified, it must notify the water corporation in writing
within:
a) 99 days from the date of filing of the schedule
application or,
b) 30 days from the date the schedule was filed by advice
letter.
3)Requires the "not justified" notice from the PUC to indicate
all changes to the rate schedule that the PUC maintains are
required. If the water corporation revises its schedule
within 10 days in accordance with the PUC's notice, the
re-filed rate schedule becomes final, and effective within 5
AB 2838
Page 2
days from the date of re-filing.
4)Requires PUC to set a rate schedule it deems not justified for
hearing within a reasonable time.
FISCAL EFFECT
Absorbable special fund costs to the PUC. [Public Utilities
Reimbursement Account]
COMMENTS
1)Background . In 1990, the PUC adopted a rate case plan (RCP)
for Class A water corporations (those with more than 10,000
service connections) to promote timely resolution of such
cases. The RCP permits general rate case applications once
every three years, and allows minor rate increases to be filed
by way of advice letter. The RCP schedule summary establishes
the time frame for the rate case process, from the filing of
the Notice of Intent to PUC final order. The PUC's schedule
contemplates issuance of a final order within 214 to 259 days
after filing of the application, depending on the number of
districts included in the filing.
2)Purpose . Most water companies experienced significant
increases in electric costs in 2001. Some water districts had
difficulty getting the PUC to accept offset rate increase
requests to recover these higher power costs. This bill,
sponsored by the California Water Association, is intended to
create an incentive for the PUC to complete ratemaking cases
according to the timetables it has itself established.
Although a water company must assume some risk by charging its
proposed rate on an interim basis pending PUC approval, it
will enable the company to cover infrastructure and operating
costs when needed. The author and sponsor maintain that the
PUC has often failed to adhere to its own deadlines and
practice rules.
Analysis Prepared by : Chuck Nicol / APPR. / (916) 319-2081