BILL ANALYSIS                                                                                                                                                                                                    



                                                                  SB 521
                                                                  Page  1

          Date of Hearing:   July 16, 2003

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                              Darrell Steinberg, Chair

                     SB 521 (Bowen) - As Amended:  June 23, 2003 

          Policy Committee:                               
          UtilitiesVote:13-0

          Urgency:     No                   State Mandated Local Program:  
          No     Reimbursable:               

           SUMMARY  

          This bill provides for increased representation of small  
          business interests before the Public Utilities Commission (PUC).  
           Specifically, this bill:

          1)Allows organizations representing small business customers  
            that receive bundled electric service to receive intervenor  
            compensation for the reasonable costs of participating in  
            proceedings at the PUC.  

          2)Defines small business customers as those with maximum peak  
            demand less than 50 kilowatts, but allows the commission to  
            modify this definition in order to increase participation by  
            organizations representing small businesses. 

          3)Precludes any party representing small business customers from  
            receiving intervenor compensation if they have a conflict of  
            interest arising from prior representation before PUC. 

          4)Requires the Office of Ratepayer Advocates (ORA) to primarily  
            consider the interests of residential and small business  
            customers in proceedings involving issues of revenue  
            allocation or rate design.

           FISCAL EFFECT  

          Minor special fund costs to the PUC to review additional  
          applications for intervenor fees.  [Public Utilities  
          Reimbursement Account]

           COMMENTS  








                                                                  SB 521
                                                                  Page  2


           Background and Purpose  .  To encourage participation in PUC  
          proceedings, customers may be compensated for their expenses  
          related to contributions to PUC decisions via the intervenor  
          program. Compensation is allowed if the PUC finds that a  
          participant substantially contributed to the PUC's decision and  
          the participant could not otherwise afford to take part without  
          undue hardship.  Any intervenor compensation ordered by the PUC  
          is to be paid by the public utility which is subject to the  
          proceeding, and, in the case of electric utilities will  
          ultimately be recovered through consumer rates.  In 2001 (the  
          most current year available), the intervenor compensation awards  
          totaled $1.3 million, with most of the money going to  
          organizations representing residential customers.  The author  
          wishes to allow organizations representing small businesses to  
          also receive intervenor compensation as appropriate.

          The ORA was created as part of PUC, but its director is  
          separately appointed by the Governor and confirmed by the  
          Senate. ORA is statutorily required to represent the interests  
          of all ratepayers in every substantial PUC proceeding. In many  
          cases ORA is able to represent the interest of all ratepayers  
          without conflict, but in some cases, such as the apportionment  
          of rate increases among customer classes, there are conflicts  
          between the interest of various ratepayers. 

          According to the author's office, industrial customers have been  
          reasonably successful at communicating their concerns to the  
          PUC, and residential customers are well represented by ORA and  
          other intervening parties, but small business customers have not  
          been particularly well heard.  The ORA does not focus on them  
          and small business groups generally don't participate at the  
          PUC.  This bill is intended to assure that the small businesses  
          are adequately represented by the ORA.

           Analysis Prepared by  :    Chuck Nicol / APPR. / (916) 319-2081