BILL ANALYSIS                                                                                                                                                                                                    




                    Appropriations Committee Fiscal Summary
          
                                           33 (Burton)
          
          Hearing Date:  2/15/01          Amended: 2/14/01       
          Consultant:  Lisa Matocq            Policy Vote: E, U & C  
          7-3                      
          ____________________________________________________________ 
          ___
          BILL SUMMARY:  SB 33X authorizes the Governor to develop a  
          plan, as specified, for the state to purchase transmission  
          facilities owned by electrical corporations.
                              Fiscal Impact (in thousands)
           Major Provisions                 2001-02           2002-03              
           2003-04               Fund  
          
          Plan                       Unknown, potentially $500 one-time         
               General
                                                           See comments below 
          
          STAFF COMMENTS:  The bill requires that any such plan be  
          developed through negotiations with representatives of the  
          electrical corporations, and that such plan be submitted to  
          the Legislature for consideration.  STAFF NOTES that there  
          is no due date for submitting such a plan.  The bill also  
          specifies that any subsequent implementing legislation may  
          include authorization for the state to (1) issue revenue  
          bonds, and (2) contract with the utilities for maintenance  
          and upgrades of the transmission facilities. 

          STAFF RECOMMENDS that the bill be amended to (1) specify  
          that to the extent that a plan is developed and  
          subsequently implemented, that the costs to the General   
          Fund of developing the plan be recovered, and (2) clarify  
          that the electrical corporations involved are those under  
          the operational control of Cal-ISO as of 1/1/01.  For  
          purposes of this analysis, staff notes the following: 
          
           there have been a broad range of acquisition cost  
            estimates, all in the billions;
           revenue bond debt and interest could potentially be in  
            the billions;
           cost estimates of operations and maintenance of the  
            transmission grid vary, but are potentially $175 million  
            annually for PG&E, SCE & SDG&E combined.   To the extent  
            that the state acquires/operates the transmission  










            facilities there are potential cost savings to  
            ratepayers;  
           gross revenues from the transmission facilities vary but  
            according to PUC staff are about $750-900 million for  
            PG&E, SCE, and SDG&E combined;
           the California Independent Operator System (Cal-ISO)  
            currently operates most of the transmission grid.   
            Cal-ISO's FY 2001 budget is about $220 million, and it  
            employs about 500 people; and
           Cal-ISO has approved approximately 98 upgrade projects  
            for 2001-2005 totaling an estimated $805 million.