BILL ANALYSIS                                                                                                                                                                                                    




                    Appropriations Committee Fiscal Summary
          
                                           30 (Poochigian)
          
          Hearing Date:  8/18/03          Amended: 7/16/03       
          Consultant:  Lisa Matocq            Policy Vote: E, U & C  
          7-0                      
          ____________________________________________________________ 
          ___
          BILL SUMMARY:  SCR 30 states that energy-related refunds  
          ordered by the Federal Energy Regulatory Commission (FERC),  
          or negotiated by the Attorney General (AG), should be used  
          to benefit the ratepayers who were harmed, as specified.   
          The resolution does not provide for the recovery of  
          litigation and investigation costs from the electricity  
          settlement proceeds.   

                              Fiscal Impact (in thousands)
           
          Major Provisions            2003-04             2004-05              
           2005-06           Fund  
          
          Litigation and invest-      Potentially significant reimbursement  
          loss      General
           igation costs                                                        
             
                                              
          
          STAFF COMMENTS:  If implemented, this resolution meets the  
          criteria for referral to the Suspense File because it  
          conflicts with budget trailer bill language which  
          establishes, as the number one priority, the repayment of  
          the state's litigation costs from electricity settlement  
          proceeds.
           
          AB 1756 (Committee on Budget), Chapter 228, Statutes of  
          2003, a budget trailer bill, provides that any funds paid  
          to the state as a result of energy litigation are to be  
          allocated in the following priority order: "(1) to  
          reimburse state funds for, or to finance, litigation and  
          investigation expenses," (2) to reduce ratepayer costs of  
          those utility ratepayers harmed by the actions of the  
          defendants, and (3) to reduce or pay debt service on the  
          energy bonds issued by the Department of Water Resources  
          (DWR).  











          This resolution specifies that refunds should be used to  
          reduce the costs of utility ratepayers who were harmed, "to  
          the maximum extent possible, through reduction of rates or  
          the reduction of ratepayer debt obligations incurred as a  
          result of the energy crisis".  The resolution conflicts  
          with the budget trailer language with regard to the  
          recovery, from the electricity settlement proceeds, of  
          litigation and investigation costs.  The Attorney General's  
          Office has incurred significant litigation and  
          investigation costs, in the millions of dollars, funded by  
          the General Fund.  In addition, the Electric Power Fund,  
          funded by ratepayers, has incurred significant  
          investigation support costs. 

          To date, the AG's Office has negotiated more than $2  
          billion (in cash and non-cash) in settlement agreements  
          related to the energy crisis.