BILL ANALYSIS
AB 2803
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Date of Hearing: April 12, 2004
ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
Sarah Reyes, Chair
AB 2803 (Horton) - As Amended: March 26, 2006
SUBJECT : Public Utilities Commission: Office of Economic
Development
SUMMARY : Establishes the Office of Economic Development (OED)
as a division within the California Public Utilities Commission
(CPUC). Specifically, this bill :
1)Establishes the OED as a division within the CPUC to review
and assess the beneficial and adverse economic impacts,
intended and unintended, of CPUC decisions and orders. The
goal of the OED is to assist the CPUC in making decisions that
will promote economic development and to avoid making
decisions that will suppress economic development.
2)Defines "adverse economic impacts" as increasing costs,
raising prices, loss of jobs or employment opportunities,
reducing technological innovation or investment in
technological innovation, reducing investment in
infrastructure to serve consumers, and reducing consumer
choices.
3)Defines "beneficial economic impacts" as increased efficiency,
reduced costs, reduced prices, technological innovation,
increased employment, increased consumer choices, and
increased information reasonably available to consumers to
make informed choices.
4)Repeals existing law prohibiting the CPUC from establishing a
separate office for the purpose of evaluating economic
development consequences of CPUC activities.
EXISTING LAW
1)States the intent of the Legislature that the CPUC assess the
economic effects or consequences of its decisions as part of
each ratemaking, rulemaking, or other proceeding.
2)Prohibits the CPUC from creating a separate office to evaluate
economic development consequences of CPUC activities.
AB 2803
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FISCAL EFFECT : Unknown.
COMMENTS : The CPUC regulates a varying array of public
utilities and activities, ranging from electricity and natural
gas to hot air balloons and railroad crossing. CPUC regulatory
decision can affect a broad range of issues. CPUC regulations
can promote low rates and consumer protection and can advance
reliable and high quality service. The CPUC also has
enforcement powers and can levy fines to punish companies that
defraud customers or intentionally offer subpar service. As with
any regulatory agency, consequences of CPUC actions will
necessarily also have economic development impacts.
This bill creates an office within the CPUC with the sole job of
assessing the economic impacts of CPUC decisions.
Unlike most state agencies, all major decisions made at the CPUC
are completed through a trial like proceeding where all parties
are allowed to submit testimony and the final decision is based
on highly developed record. This procedure allows all parties
to submit testimony regarding all aspects of the proceeding,
including the economic impact of the action.
Supporters of this bill believe that establishing an OED would
ensure that policies and regulations created at the CPUC would
enhance investment and development in California. The bill does
create an office to assist the CPUC in assessing the economic
impacts of CPUC decision, but final decisions will still lie
with the Commissioners who make their determinations based on a
broad range of issues and the fully developed record. Given the
comprehensive rule making process already in place at the CPUC,
there is little evidence that the creation of an OED will
provide any additional assurance that economic impacts will be
evaluated any differently than they are today.
Amendments
Given the state's current fiscal situation, the committee may
wish to consider amending the bill to require that the OED be
funded through existing CPUC revenues and prohibit the CPUC from
funding the OED through increased rate surcharges.
REGISTERED SUPPORT / OPPOSITION :
AB 2803
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Support
California Chamber of Commerce
California Independent Grocers & Convenience Stores (CIGCS)
California Manufacturers & Technology Association (CMTA)
Pacific Gas & Electric (PG&E)
SBC
Sempra
Verizon
Opposition
The Utility Reform Network (TURN)
Analysis Prepared by : Edward Randolph / U. & C. / (916)
319-2083