BILL ANALYSIS
AB 2838
Page 1
GOVERNOR'S ITEM VETO
AB 2838 (Canciamilla)
As Amended August 31, 2002
2/3 vote
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|ASSEMBLY: | |(May 2, 2002) |SENATE: |38-1 |(August 31, |
| | | | | |2002) |
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(vote not relevant)
ASSEMBLY: 66-2 (August 31, 2002)
Original Committee Reference: W., P. & W.
SUMMARY : Among other things, requires the Public Utilities
Commission (PUC) to issue a final decision on a water
corporation's application for a general rate increase within a
specified timeframe.
The Senate amendments delete the Assembly version of the bill,
and instead:
1)Add a finding that states that the provisions of the act
should not be construed as precedent for any other utility.
2)Specify that a penalty collected pursuant to PUC Section 405
or 406 shall be deposited in the General Fund, as opposed to
other fees and charges collected by the PUC from each public
utility subject to the jurisdiction of the PUC, which are
deposited in the Public Utilities Commission Utility
Reimbursement Account.
3)Require the PUC to issue its final decision on a general rate
case application of a water corporation with greater than
10,000 service connections in a manner that ensures that the
PUCs decision becomes effective on the first day of the first
test year in the general rate increase application.
4)Provide that if the PUC's decision is not effective on the
first day of the first test year that the applicant may file a
AB 2838
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tariff implementing interim rates that may be increased by an
amount equal to the rate of inflation as compared to existing
rates.
5)Specify that the interim rates shall be effective on the first
day of the first test year in the general rate case
application, and that the interim rates are subject to refund
and shall be adjusted up or down back to the interim rate
effective date, consistent with the final rates adopted by the
commission.
6)Allow the PUC to authorize lower interim rates if the PUC
finds the rates to be in the public interest.
7)Allow, if it is determined that the PUC'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
the PUC to require a different effective date for the interim
rates or final rates.
8)Require the PUC to establish a schedule to require every water
corporation subject to the rate case plan to file an
application every three years. The plan shall include a
provision to allow the filing requirement to be waived upon
mutual agreement.
9)Allow the requirements of the bill to be waived at any time by
mutual consent of the executive director of the PUC and the
water corporation.
10)Appropriate $445,000 from the PUC Utilities Reimbursement
Account in the General Fund for costs incurred by the PUC in
the 2002-03 fiscal year in the administration of the
requirements of this bill.
11)Specifies that the appropriation shall be allocated from
those moneys in the PUC Utilities Reimbursement Account
derived from the imposition of regulatory fees, and may not
include moneys in the PUC Reimbursement Account derived from
the imposition of penalties.
EXISTING LAW : Provides that all hearings, investigations, and
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proceedings shall be governed by the Public Utilities Code and
by rules of practice and procedure adopted by the PUC. Existing
law requires the PUC to act on a proposed decision in a
rate-making proceeding within 60 days of the proposed decision's
issuance, unless an alternate decision is put forward, or unless
"extraordinary circumstances" prevent the PUC from acting.
AS PASSED BY THE ASSEMBLY , the bill required the PUC to follow
certain specified procedures when a water corporation files a
schedule stating rates, classifications, contracts, practices or
rules for the service of water.
FISCAL EFFECT : According to the Senate Appropriations Committee
analysis, increased costs to the PUC are estimated at $445,000
in 2002-03, and $891,000 in 2003-04 and annually thereafter.
COMMENTS : While the bill was substantially amended in the
Senate, and the Assembly approved provisions of the bill were
deleted, the thrust of the bill, to ensure that the PUC makes
decisions in a timely manner, remains the same.
GOVERNOR'S ITEM VETO MESSAGE :
"I am signing Assembly Bill 2838, but reducing the appropriation
from the Public Utilities Commission Utilities Reimbursement
Account from $445,000 to $222,500.
"This bill requires the Public Utilities Commission (PUC) to act
on water utilities' rate applications within specified timelines
and allows water utilities to enact interim rates at the rate of
inflation when their rate cases are delayed, subject to refunds
by the PUC. The bill also requires water utilities to file a
rate application with the PUC every three years."
Analysis Prepared by : Kathy Mannion / W., P. & W. / (916)
319-2096
FN: 0008096