BILL ANALYSIS
Appropriations Committee Fiscal Summary
------------------------------------------------------------
| |1876(Bowen) |
|-------------------------------+----------------------------|
| | |
|-------------------------------+----------------------------|
|Hearing Date: 5/13/02 |Amended: 5/1/02 |
|-------------------------------+----------------------------|
|Consultant: Lisa Matocq |Policy Vote: E, U & C 5-0 |
| | |
| | |
------------------------------------------------------------
____________________________________________________________
___
BILL SUMMARY: SB 1876 is an omnibus bill that (1) repeals
statutes establishing and granting certain powers to the
Electricity Oversight Board (EOB), (2) establishes a
Ratepayer Refund Accounts for the deposit of any refunds of
excessive wholesale power costs recovered by the electrical
corporations, and (3) makes a variety of other changes.
Fiscal Impact (in thousands)
Major Provisions 2002-03 2003-04
2004-05 Fund
PUC Potential costs of $125 annually. Costs
Special*
should be offset by fee revenues.
EOB Unknown, potentially
significant cost Special*/
savings
General
*Public Utilities Reimbursement Account (PURA)
STAFF COMMENTS: The EOB was established pursuant to AB
1890 (Brulte, Ch. 854, St of 1996) to oversee the
Independent System Operator (ISO) and the Power Exchange
(PX). Due to a number of factors, including federal
preemption issues, the EOB's powers have been significantly
diminished. Additionally, the EOB has no voting members
currently. This bill, among other things:
authorizes the Public Utilities Commission (PUC) to
regulate an electrical corporation's holding company for
a specified purpose;
states legislative intent that regional electricity
transmission markets in the western states be developed
and that access to those markets be improved. ; The bill
specifies that voluntary adoption of a regional compact
is the preferred means to accomplish this development;
requires the PUC to establish rates for electrical
corporations which include a reasonable rate of return on
retained generation assets, as specified; and
requires that any gain or loss on the sale of an
electrical corporation's asset, which was included in its
rate base, should be allocated to ratepayers.
The EOB's 2001-2002 budget is about $3.4. It is unknown
whether part or all of the EOB's authority and
responsibilities would be transferred to another entity,
and therefore difficult to determine cost savings. The
Senate Budget Subcommittee No. 2 recently took a number of
actions related to the EOB including, deleting funding and
positions associated with generation maintenance, deleting
six vacant positions and related funding, and requiring the
SB 1876 (Bowen)
Page Two
EOB to submit various reports related to staff activities
compared to the board's authority, and the status of
pending litigation.
PURA revenues are derived from an annual fee imposed on
electrical, gas, telephone, and water corporations and
every other public utility providing service directly to
customers. Therefore, any increased costs to the PUC
should be offset by fee revenues.
Presumably, the Independent System Operator (ISO) would be
the entity participating in any voluntary regional compact
to develop transmission markets. The ISO is a nonprofit
public benefit corporation which receives no state funding,
but rather derives its revenues from a surcharge imposed on
electricity bills.
Staff notes that it is unclear whether striking lines 5-9
on page 9 (the December 31, 2001 sunset on the electrical
corporation's ability to recover uneconomic costs, as
specified) would effectively allow the electrical
corporations to continue recovery of such costs upon
enactment of this bill.