BILL ANALYSIS                                                                                                                                                                                                    



                                                                  SB 7 x1
                                                                  Page  1

          Date of Hearing:   January 18, 2001

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                              Carole Migden, Chairwoman

                  SB 7 x1 (Burton) - As Amended:  January 18, 2001 

          Policy Committee:                              E.C.&A.Vote:

          Urgency:     Yes                  State Mandated Local Program:  
          No     Reimbursable:              No

           SUMMARY  

          This bill appropriates $400 million from the General Fund to the  
          Department of Water Resources (DWR) to purchase electric power  
          and sell the power to the Independent System Operator (ISO),  
          public utility corporations, or retail end-users.  Specifically,  
          this bill: 

          1)Authorizes the DWR to enter into contracts to purchase  
            electric power, but only through February 1st, 2001.  No such  
            contracts may extend beyond February 15th.  

          2)Authorizes the DWR to sell the power at its purchase cost plus  
            administrative costs (not to exceed $1 million), transmission,  
            scheduling, and other related costs to the ISO, public utility  
            corporation, or end-users.  

          3)Requires that, for sales to retail end-users, costs will be no  
            more than the rates in effect and as established by the Public  
            Utilities Commission (PUC).  

          4)Requires the DWR to use all means feasible to secure the  
            state's right to recover expended funds.  

          5)Establishes the continuously-appropriated Department of Water  
            Resources Electric Power Fund and requires all payments from  
            the fund be made only for purposes authorized in the bill.  

          6)Transfers $400 million from the General Fund to the Electric  
            Power Fund for the power purchases.

          7)Requires the PUC to adopt emergency regulations implementing  
            delivery and payment mechanisms for sale of the power.








                                                                  SB 7 x1
                                                                  Page  2

           
           FISCAL EFFECT  

          1)One-time General Fund cost of $400 million, offset to an  
            unknown extent by payments from power sales.  (To the extent  
            that power is purchased and sold to retail end-users, at costs  
            exceeding the PUC's retail rate, the state will not fully  
            recover costs.)

          2)Minor absorbable special fund costs for the PUC to adopt the  
            billing mechanisms.

           
          COMMENTS  

           General Fund Impact  .  According to the Legislative Counsel, any  
          funds remaining in the Electric Power Fund upon cessation of the  
          program would revert to the General Fund.    

           Analysis Prepared by  :    Chuck Nicol / APPR. / (916)319-2081