BILL ANALYSIS
AB 1157
Page A
Date of Hearing: April 28, 2003
ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
Sarah Reyes, Chair
AB 1157 (Canciamilla) - As Amended: April 22, 2003
SUBJECT : Public utilities: water rates.
SUMMARY : Clarifies that existing law governing the time frames
within which water rate case decisions must be issued applies to
rate cases now pending before the California Public Utilities
Commission (PUC). Specifically, this bill :
1)Provides that existing law requiring PUC to issue timely final
decisions on general rate case applications of a water
corporations applies to every pending general rate case
application of a water corporation with greater than 10,000
service connections, without regard to when the application is
filed.
2)Specifies that the provision is declaratory of the intent of
the Legislature in enacting the law in the 2001-2002 Session
of the Legislature.
EXISTING LAW :
1)Requires PUC to issue a final decision on a general rate case
application of a water corporation with greater than 10,000
service connections to coincide with the first day of the
first test year in the general rate case application.
2)Provides that if PUC's rate case decision is not effective on
the first day of the first test year, then the applicant may
file a tariff implementing interim rates that can be increased
by an amount equal to the rate of inflation, as compared to
existing rates.
3)Specifies that any interim rate is subject to refund and shall
be adjusted up or down consistent with the final rates adopted
by PUC.
FISCAL EFFECT : Unknown.
COMMENTS :
AB 1157
Page B
Investor-owned water utilities provide potable water to 20% of
Californians. They differ from the municipal water utilities
such as East Bay Municipal Utility District and Los Angeles
Department of Water and Power in that they are for-profit
private corporations subject to economic regulation by PUC.
PUC categorizes the investor-owned water utilities by size. The
largest are the ten Class A water utilities, which serve at
least 10,000 customers. PUC adopted a rate case plan for Class
A water corporations in 1990 to promote timely resolution of
their rate cases. The plan allows Class A water corporation
general rate case applications once every three years, and
permits minor rate increases to be handled by way of advice
letter.
Recent legislation
Last year, the Governor signed AB 2838 (Canciamilla) into
law,<1> which requires PUC to issue timely final decisions on
general rate case applications of water corporations with
greater than 10,000 service connections.
After its enactment, PUC staff interpreted the law to apply only
to water rate cases that began after the beginning of this year,
not to pending rate case applications.
This bill is written to clarify that the law applies to all
water rate cases now pending before PUC.
REGISTERED SUPPORT / OPPOSITION :
Support
California Water Association
Opposition
None on file.
Analysis Prepared by : Paul Donahue / U. & C. / (916) 319-2083
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<1> Chapter 1147, Statutes of 2002
AB 1157
Page C