BILL ANALYSIS                                                                                                                                                                                                    




                    Appropriations Committee Fiscal Summary
          
                                           1755 (Soto)
          
          Hearing Date:  5/20/02          Amended: 5/20/02       
          Consultant:  Lisa Matocq            Policy Vote: E, U & C  
          5-0                      
          ____________________________________________________________ 
          ___
          BILL SUMMARY: 
          
          SB 1755 authorizes municipal utility districts (MUDs) and  
          county water districts (CWDs) to own and operate electric  
          power plants, and to use the power for their own purposes  
          or sell it wholesale.  

                              Fiscal Impact (in thousands)
           
          Major Provisions                 2002-03           2003-04              
           2004-05               Fund  
          
          DWR power purchasing     Potential unknown uncollected costs, to be   
           Special*
          program                    offset by cost recovery revenues     

          PUC publication                       Unknown, probably not  
          substantial costs.    Special**
                                     Costs should be offset by fee revenues. 

          *Electric Power Fund
          **Public Utilities' Reimbursement Account (PURA)

          
          STAFF COMMENTS:  
          
          AB 1x (Keeley, Ch. 4, St. of 2001) authorizes the  
          Department of Water Resources (DWR) to contract for energy  
          procurement.  Prior to the enactment of AB 1x, customers  
          had the right to obtain power from alternate providers.  AB  
          1x suspended that right until such time as DWR no longer  
          supplies power.  To the extent that MUDs and CWDs generate  
          their own electricity, rather than obtaining it from DWR,  
          DWR could incur stranded costs.  Rather than shifting that  
          burden to remaining ratepayers, a number of bills e.g. SB  
          23xx (Soto), SB 27xx (Bowen), SB 1172 (Kuehl), require that  
          DWR be reimbursed for its uncollected costs, as specified.   










          Consistent with the other bills, this bill requires a  
          district that elects to provide for its own power to  
          reimburse DWR for its uncollected costs of providing power  
          to that district, including financing costs, as specified.   
          It also requires the Public Utilities Commission (PUC) to  
          publish, and update as necessary, a formula for calculating  
          the unrecovered costs. 

          PURA revenues are derived from an annual fee imposed on  
          utilities.  Therefore, any increased costs to the PUC  
          should be recovered through fee revenues. 

          SB 1871 (Monteith), pending on the Senate Floor, authorizes  
          the Root Creek Water District to own and operate electric  
          power plants, and natural gas facilities.