BILL NUMBER: SCR 30 INTRODUCED BILL TEXT INTRODUCED BY Senator Poochigian MAY 1, 2003 Senate Concurrent Resolution No. 30--Relative to electricity cost refunds. LEGISLATIVE COUNSEL'S DIGEST SCR 30, as introduced, Poochigian. Electricity cost refunds. This measure would urge that energy-related refunds ordered by the Federal Energy Regulatory Commission, or negotiated by the Attorney General, the Governor, or any other agent of the state, should be used solely to provide relief to ratepayers and that, in order to provide relief, money from energy-related refunds should be dedicated strictly to repay the energy bonds or reduce or eliminate the rate surcharges dedicated to bond repayment. Fiscal committee: yes. WHEREAS, In 2000-01, this state experienced skyrocketing electricity costs and an unprecedented number of rolling blackouts. California ratepayers will experience the hardship of excessive electricity costs for the next 20 years; and WHEREAS, Supply shortages, dysfunctional electricity markets, poor regulatory oversight, and increase in demand led to the insolvency of investor-owned utilities and the inability to purchase electricity for customers; and WHEREAS, Inaction and lack of leadership exacerbated the economic impact of the energy crisis on local business, residents, ratepayers, and taxpayers of the state; and WHEREAS, The Department of Water Resources began to purchase electricity for the customers of the investor-owned utilities in December 2000 to avoid electricity service disruptions and to minimize the adverse effect on California's economy; and WHEREAS, The Department of Water Resources spent $11,000,000,000 from the state's General Fund on spot-market purchases, and signed $43,000,000,000 in long-term energy contracts in 2001; and WHEREAS, California issued $12,000,000,000 in revenue bonds, the largest municipal bond sale in the history of the United States, to repay the state's General Fund; and WHEREAS, Ratepayers are now forced to pay an energy surcharge for the debt service of the energy bond over 20 years, totaling $17,400,000,000; and WHEREAS, In addition to an energy surcharge, over the next 20 years ratepayers will be forced to pay higher electricity rates based on California's high-priced long-term energy contracts; and WHEREAS, The ratepayers of California deserve relief from exorbitant energy prices caused by California's dysfunctional electricity markets and bad policy decisions; and WHEREAS, The Federal Energy Regulatory Commission is attempting to determine potential refunds due to California based upon an intensive and exhaustive investigation; and WHEREAS, The Attorney General has initiated legal proceedings to recover funds from market participants, and has negotiated settlements on several energy lawsuits; now, therefore, be it Resolved by the Senate of the State of California, the Assembly thereof concurring, That energy-related refunds ordered by the Federal Energy Regulatory Commission, or negotiated by the Attorney General, the Governor, or any other agent of the state, should be used solely to provide relief to ratepayers who bear the high cost of the energy bonds and the poorly negotiated contracts through rate surcharges; and be it further Resolved, That, in order to provide relief, money from energy refunds should be dedicated strictly to repay the energy bonds or reduce or eliminate the rate surcharges dedicated to bond repayment; and be it further Resolved, That the Secretary of the Senate transmit copies of this resolution to each member of the Federal Energy Regulatory Commission, the Governor, the Attorney General, each member of the Public Utilities Commission, and the Director of Water Resources.