BILL ANALYSIS
Appropriations Committee Fiscal Summary
39 (Speier)
Hearing Date: 3/5/01 Amended: 2/27/01
Consultant: Lisa Matocq Policy Vote: E, U & C
6-2
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BILL SUMMARY: SB 39x:
expands the statutory definition of "public utility" to
include wholesale generators thereby bringing them within
the jurisdiction of the California Public Utilities
Commission (CPUC), except with regard to rates,
requires the CPUC to ensure that generation facilities
are operated in a manner that ensures their availability
to maintain a reliable electricity supply,
authorizes the CPUC, in consultation with the California
Independent System Operator (ISO) or other area operator,
to establish inspection, operating, and maintenance
procedures for electric plants.
Fiscal Impact (in thousands)
Major Provisions 2001-02 2002-03
2003-04 Fund
PUC Unknown, potentially in excess of $500
Special*
annually and potentially offset by
increased
fee revenues in outyears
*Public Utilities Commission Utilities' Reimbursement Account (URA)
STAFF COMMENTS: AB 1890 (Brulte, Ch. 854, St. of 1996)
exempted wholesale generators from the definition of a
"public utility" for purposes of CPUC regulation.
The Governor's Executive Order D-23-01, of 2/8/01, among
other things, requires (1) generators to provide ISO with
planned outage schedules, (2) ISO to prepare a quarterly,
coordinated outage plan, and develop generation facility
maintenance criteria, and (3) the Electricity Oversight
Board to identify ways to help ensure an adequate
electricity supply during peak demand. STAFF NOTES that it
is unclear whether there would be any duplication of effort
as a result of this bill and implementation of the
Executive Order.
The Governor's Budget sets aside $1 billion for energy
initiatives. In his State of the State, the Governor urged
that 50 new inspectors be added to the CPUC.
Estimates of the number of wholesale generators in the
state vary from 34-100. The increased costs for the
wholesale generator provisions of this bill are unknown and
depend on the number of wholesale generators and the extent
to which they are regulated, inspected, etc. For
illustrative purposes, for every five new inspectors
required by this bill, increased costs for salaries and
benefits alone could be $350,000 annually. This estimate
does not include support staff or other administrative
costs. There is currently a $15 million reserve in the
URA. It is likely that the increased costs could be
absorbed initially by the reserve. CPUC staff indicate
that in outyears, the costs could be recovered by a fee
increase, if necessary. CPUC staff indicate that there are
about 1000 power plants in the state, and that they
currently have 6-10 inspectors inspecting 22 plants. STAFF
NOTES that under current law, electrical, and gas
corporations, and public utilities providing service
directly to customers are charged an annual fee by the CPUC
to help cover the CPUC's budget. STAFF RECOMMENDS that the
bill be amended to extend the CPUC's fee authority to
wholesale generators.
To the extent that a determination must be made, involving
FERC and/or the courts, about whether the provisions of
this bill are appropriate for state regulation, there could
indirect costs.
STAFF ALSO NOTES it is unclear whether "generation
facilities" on page 4, line 28 refers to all generation
facilities or only divested plants.
AB 8x (Migden), awaiting action in the Assembly
Appropriations Committee, contains some provisions similar
to this bill but grants oversight authority to the ISO and
the Electricity Oversight Board.