BILL ANALYSIS                                                                                                                                                                                                    



                                                                       


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                                 THIRD READING


          Bill No:  SCR 30
          Author:   Poochigian (R), et al
          Amended:  8/26/03
          Vote:     21

           
           SENATE ENERGY, U.&C. COMMITTEE  :  7-0, 7/8/03
          AYES:  Bowen, Alarcon, Battin, Dunn, McClintock, Murray,  
            Vasconcellos
          NO VOTE RECORDED:  Morrow, Sher

           SENATE APPROPRIATIONS COMMITTEE  :  9-0, 8/20/03
          AYES:  Alpert, Battin, Ashburn, Bowen, Karnette, Machado,  
            Murray, Poochigian, Speier
          NO VOTE RECORDED:  Aanestad, Burton, Escutia, Johnson


           SUBJECT  :    Electricity cost refunds

           SOURCE  :     Author


           DIGEST  :    This resolution concludes that energy-related  
          refunds ordered by the Federal Energy Regulatory  
          Commission, or negotiated by the Attorney General, should  
          be used to benefit ratepayers who were harmed and to  
          reimburse reasonable litigation expenses incurred by the  
          Attorney General.  The resolution states that in order to  
          provide relief, money from the refunds should be dedicated  
          to reduce ratepayers' costs through reduction of rates or  
          the reduction of ratepayer debt obligations incurred as a  
          result of the energy crisis.

           ANALYSIS  :    The Attorney General (AG), on behalf of the  
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          state, has entered several agreements to settle lawsuits  
          arising from the energy crisis.  These include agreements  
          with:

          1.Calpine - $6 million in cash, consisting of:

             A.    $1.5 million dedicated to installing solar energy  
                technology at schools and other public buildings.

             B.    $4.5 million to reimburse the state for  
                investigation costs.

          2.Constellation - $2.5 million in cash, consisting of:

             A.    1.25 million dedicated to installing solar energy  
                technology at schools and other public buildings.

             B.    $1.25 million to reimburse the state for  
                investigation costs.

          3.Williams - $417 million total value, consisting of:

             A.    $147 million in cash through 2010 - $70 million  
                dedicated to installing solar energy technology at  
                schools and other public buildings, $20 million for  
                siting and installing turbines, $12 million divided  
                between the AG, the California Public Utilities  
                Commission and the Electricity Oversight Board for  
                investigation costs, and the balance divided among  
                participating local governments and other states.

             B.    $180 million attributed to a reduction in  
                Williams' energy contract with DWR.

             C.    $90 million attributed to six electric generating  
                turbines given to the cities of San Francisco and San  
                Diego.

          4.El Paso - $1.7 billion total value, consisting of:

             A.    665 million in cash, $225 million up front and  
                $440 million over 20 years - $505.6 million to IOU  
                ratepayers and $159.4 million divided among  
                participating local governments and other states.







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             B.    $900 million worth of natural gas over the next 20  
                years, allocated among the settling parties.

             C.    $125 million attributed to a reduction in El  
                Paso's energy contract with DWR.

             D.    This settlement has not been finalized and the  
                AG's office indicates the numbers and details are  
                subject to change.

          State lawsuits against other energy companies (e.g., Coral,  
          Dynegy, Mirant, PG&E, Powerex, Reliant and Sempra) are  
          pending.

           FISCAL EFFECT  :    Fiscal Com.:  Yes

          Potentially significant reimbursement loss.


          NC:cm  8/26/03   Senate Floor Analyses 

                       SUPPORT/OPPOSITION:  NONE RECEIVED

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