BILL ANALYSIS
Appropriations Committee Fiscal Summary
1157 (Canciamilla)
Hearing Date: 8/04/04 Amended: 6/30/04
Consultant: Lisa Matocq Policy Vote: E. U. & C.
5-1
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BILL SUMMARY: AB 1157 eliminates the Public Utilities
Commission's (PUC) authority, regarding an application for
a general rate increase by a water utility with more than
10,000 service connections, to (1) issue a lesser increase
in interim rates if the commission finds the rates to be in
the public interest, and (2) require a different effective
date for the interim rates in cases where the commission's
decision is delayed due to actions by the water utility.
The bill also makes related changes.
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Fiscal Impact (in thousands)
Major Provisions 2004-05 2005-06
2006-07 Fund
ORA Unknown costs, if any. See comments
Special*
below. Any increased costs should
be
offset by increased fee revenues.
PUC Unknown costs or savings
Special*
*Public Utilities' Reimbursement Account (PURA)
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STAFF COMMENTS: AB 2838 (Canciamilla, Ch. 1147, St. of
2002) required the PUC to (1) establish a schedule to
review the rates of water utilities, with greater than
10,000 service connections, every three years, and (2)
issue a decision on a water utility's application for a
general rate increase within a certain time period. It
also provided that if the PUC fails to issue a timely
decision, the applicant may be granted interim rates.
Interim rates are based on the current rate, plus
inflation, and adjusted upward or downward, consistent with
the final rate, back to the effective date of the interim
rates. This bill also extends (2) above to all pending
general rate case applications, including those that were
filed prior to passage of AB 2838, and states that this is
declaratory of the legislative intent of AB 2838. There
may be a few pending applications that could be impacted by
this provision.
The Office of Ratepayer Advocate (ORA), within the PUC, has
expressed concern that removing existing incentives for
water utilities to act, and respond to the PUC,
expeditiously (for example, eliminating the PUC's authority
to change the effective date of interim rates under certain
circumstances) could adversely impact ORA staffing, work
flow, and the timely processing of applications, and result
in increased staff costs of $160,000 to $240,000 annually.
Staff notes, however, that this estimate assumes that water
utilities will cause delays in the future. Any additional
costs or savings to the PUC are unknown. However, PURA
revenues are derived from an annual fee imposed on public
utilities. Therefore, any increased costs to the PUC,
including the ORA, should be offset by increased fee
revenues.