BILL ANALYSIS                                                                                                                                                                                                    




                    Appropriations Committee Fiscal Summary
          
                                           2838 (Canciamilla)
          
          Hearing Date:  8/13/02          Amended: 8/5/02        
          Consultant:  Lisa Matocq            Policy Vote: E, U & C  
          8-0                      
          ____________________________________________________________ 
          ___
          BILL SUMMARY: 
          
          AB 2838 requires the Public Utilities Commission (PUC) to  
          issue a decision on a water utility company's application  
          for a general rate increase, within a certain  time period,  
          as specified.  It also requires the PUC to establish a  
          schedule to review the rates of water corporations every  
          three years. 

                              Fiscal Impact (in thousands)
           
          Major Provisions                 2002-03           2003-04              
           2004-05               Fund  
          
          PUC                        Potential costs of $445 in 2002-03, and    
               Special* 
                                     $891 annually thereafter.  Costs should  
          be
                                     offset by fee revenues.

          *Public Utilities' Reimbursement Account (PURA)
          
          STAFF COMMENTS:  
          
          The bill provides that if the PUC fails to issue a decision  
          within the specified time period, the applicant may be  
          granted interim rates (current rate, plus inflation).   
          These rates would be subject to refund, pending the final  
          decision. 

          There is no specific schedule for reviewing water rates  
          under current law.  There are 10 large water companies with  
          a total of 64 districts.  Over the past four years, the PUC  
          has reviewed an average of about 10 per year, and this bill  
          would require them to review approximately 20 per year,  
          thereby doubling their workload.  Increased costs to the  
          PUC are estimated at $445,000 in 2002-03, and $891,000 in  










          2003-04 and annually thereafter.   PURA revenues are  
          derived from an annual fee imposed on public utilities.   
          Therefore, any increased costs should be offset by  
          increased fee revenues.