BILL ANALYSIS
SB 31 X1
Page 1
( Without Reference to File)
SENATE THIRD READING
SB 31 X1 (Burton)
As Amended May 7, 2001
Majority vote
SENATE VOTE :Vote not relevant
ENERGY APPROPRIATIONS
(vote not relevant) (vote not
relevant)
SUMMARY : Caps the Department of Water Resources (DWR) bond
authority at $13,423,000,000 with respect to purchases of power,
requires that repayment to the General Fund (GF) and DWR be made
as soon as practicable, prohibits revenues of the DWR Electric
Power Fund from being used to pay for any undercollected amount
due to any electrical corporation or to any entity to which the
amount has been assigned, and makes other clarifying and
technical changes to the DWR electricity purchase and sales
program. Specifically, this bill :
1)Provides that no cause of action arising out of any California
Public Utilities Commission (CPUC) order construing, applying,
or implementing AB1 X1 (Keeley), Chapter 4, Statutes of 2001,
shall accrue in any court to any corporation or person unless
the corporation or person has filed an application to CPUC for
a rehearing within 10 days after the issuance of the order or
decision. Additionally, requires CPUC to issue its decision
or order on rehearing within 20 days after the filing of that
application.
1)Provides that no CPUC order interpreting or implementing AB1
X1 shall be subject to review in the courts of appeal.
1)Makes other clarifying and technical changes to the appellate
review process and writ of review timelines applying to
judicial review of a CPUC order relating to AB1 X1.
1)Authorizes DWR to contract with an electrical corporation and
its successor to transmit and distribute all power made
available by DWR, and other related services, on terms and
conditions that adequately secure payment to DWR.
SB 31 X1
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1)Requires CPUC, at request of DWR, to order an electrical
corporation or its successor to transmit and distribute all
power made available by DWR, and other related services, on
terms and conditions that adequately secure payment to DWR.
1)Authorizes DWR to authorize the issuance of bonds (excluding
notes issued in anticipation of the issuance of bonds and
retired from the proceeds of those bonds) in an aggregate
amount up to the greater of $13,423,000,000 or the amount
calculated by multiplying by a factor of four the annual
revenues generated by the California Procurement Adjustment,
as determined by CPUC. Until the effective date of this bill,
DWR is authorized to use the formula as specified in AB1 X1,
but not to exceed the $13,423,000,000 total cap.
1)Provides that the refunding of bonds to obtain a lower
interest rate shall not be included in the calculation of the
aggregate amount.
1)Provides that the issuance of bonds shall be in a public
offering.
1)Requires that repayment to the GF and DWR be made as soon as
practicable.
1)Provides that, after November 15, 2001, the Department of
Finance (DOF) deficiencies pursuant to AB1 X1, shall be
limited to amounts required for short-term cash flow purposes
of no more than $500 million in the aggregate and shall be
repaid from the DWR Electric Power Fund within 180 days.
1)Requires DOF to certify to the Joint Legislative Budget
Committee and the Appropriations Committee as to the need for
a short-term cash flow loan not less than 10 days prior to the
written notification, and repeal these provisions as of
January 1, 2003.
1)Prohibits revenues of the DWR Electric Power Fund established
pursuant to AB1 X1 from being used to pay for any
undercollected amount due to any electrical corporation or to
any entity to which the amount has been assigned.
1)Make other clarifying and technical changes to DWR electricity
purchase and sales program.
SB 31 X1
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EXISTING LAW :
1)Authorizes DWR to contract with an electrical corporation to
transmit or provide for the transmission of, and distribute
the power and provide billing, collection, and other related
services, as the agent of DWR, on terms and conditions that
reasonably compensate the electrical corporation for its
services, and requires CPUC, at the request of DWR, to order
such actions.
1)Authorizes DWR to enter into contracts for the purchase of
electric power and to sell power to retail end-use customers
and to local publicly owned electric utilities.
1)Requires CPUC to take necessary action to ensure that all, or
a portion of, the component rates that are available to
electrical corporations for the purchase of their net short
position of electricity are used to recover the revenue
requirements for the purchase and sale of power by DWR.
1)Authorizes DWR to issue revenue bonds not to exceed a certain
amount, containing specified terms and conditions, upon
authorization by written determination of DWR and with the
approval of the Director of Finance and the Treasurer.
FISCAL EFFECT : Unknown
COMMENTS : In February of this year, pursuant to AB1 X1
(Keeley), Chapter 4, Statutes of 2000, DWR stepped in and
assumed the utilities' role of procuring power. DWR intends to
finance its purchases through the sale of bonds and charges to
its customers to ensure those bonds will be repaid. This bill
allows DWR to authorize the issuance of bonds (excluding notes
issued in anticipation of the issuance of bonds and retired from
the proceeds of those bonds) in an aggregate amount up to the
greater of $13,423,000,000 or the amount calculated by
multiplying by a factor of four the annual revenues generated by
the California Procurement Adjustment, as determined by CPUC
(Until the effective date of this bill, DWR is authorized to use
the formula as specified in AB1 X1, but not to exceed the
$13,423,000,000 total cap).
Additionally, this measure requires that repayment to the GF and
DWR be made as soon as practicable, and prohibits revenues of
the DWR Electric Power Fund from being used to pay for any
SB 31 X1
Page 4
undercollected amount due to any electrical corporation or to
any entity to which the amount has been assigned. Additionally,
this bill provides that no CPUC order interpreting or
implementing AB1 X1 shall be subject to review in the courts of
appeal, and makes other clarifying and technical changes to
judicial review of a CPUC order relating to AB1 X1 and the DWR
electricity purchase and sales program
Analysis Prepared by : Joseph Lyons / E. C. & A. / (916)
319-2083
FN: 0000607