BILL ANALYSIS
SB 659
Page 1
SENATE THIRD READING
SB 659 (Soto)
As Amended June 1, 2004
Majority vote
SENATE VOTE :(vote not relevant)
UTILITIES AND COMMERCE 12-0 APPROPRIATIONS 21-0
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|Ayes:|Reyes, Aghazarian, Bogh, |Ayes:|Chu, Runner, Bates, |
| |Calderon, Canciamilla, | |Laird, Calderon, Corbett, |
| |Diaz, Jerome Horton, La | |Correa, Daucher, |
| |Malfa, Levine, Maddox, | |Firebaugh, Goldberg, |
| |Ridley-Thomas, Wesson | |Haynes, Keene, Leno, |
| | | |Nation, Negrete McLeod, |
| | | |Oropeza, Pavley, Levine, |
| | | |Steinberg, Wiggins, Yee |
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SUMMARY : Repeals provisions in existing law that require an
expedited rehearing and expedited judicial review of California
Public Utilities Commission (PUC) decisions arising out of the
implementation of AB X1 1 (Keeley), Chapter 4, Statutes of
2001-02, First Extraordinary Session. Specifically, this bill :
1)Repeals a provision that prohibits a cause of action arising
out of any decision of PUC implementing the provisions of AB
X1 1 unless an application for a rehearing has been filed with
PUC within 10 days after the date the decision has been
issued.
2)Repeals a provision creating a direct and expedited judicial
review by the California Supreme Court of any PUC decision of
AB X1 1.
EXISTING LAW :
1)Provides that after any order or decision has been made by
PUC, any party to the action or proceeding may apply for a
rehearing in respect to any matters determined in the action
or proceeding and specified in the application for rehearing.
2)Provides that any aggrieved party may petition for a writ of
review to a court of appeal or the California Supreme Court
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Page 2
for the purpose of having the lawfulness of a PUC decision or
order determined.
3)Allows for a direct and expedited judicial review by the
California Supreme Court of any PUC decision implementing AB
X1 1.
FISCAL EFFECT : Unknown
COMMENTS : During the energy crisis, the Legislature approved
and Governor Davis signed AB X1 1, which allowed the Department
of Water Resources (DWR) to purchase electricity on behalf of
the state's investor owned utilities (IOUs) and to recover its
procurement costs through the sale of revenue bonds which would
ultimately be repaid by IOU's ratepayers. Additionally, this
bill:
1)Required PUC to set electricity rates to cover DWR's power
purchasing costs.
2)Prohibited any future rate increased for residential customers
for usage under 130% of baseline quantities.
3)Prohibited DWR from entering into any power procurement
contracts after January 1, 2003.
After AB X1 1 was signed into law, concerns were raised that
revenue bonds could not be issued until proceedings at PUC were
final and no longer subject to rehearing or judicial review.
The normal rehearing and judicial review procedures could have
resulted in delays in issuing the bonds. To address these
concerns, SB X1 31, (Burton) Chapter 9, Statutes of 2001-02,
First Extraordinary Session, was enacted with provisions that
called for an expedited rehearing and judicial review process
for all issues relating to AB X1 1, include provisions not
directly related to the issuance of bonds.
Since the passage of AB X1 1, the bonds have been issued, DWR is
no longer entering into new contracts to purchase power, the
contracts DWR did enter into have been allocated to IOUs and PUC
has made several decisions relating to the allocation of DWR's
power purchase costs.
The sponsors of this bill believe that since the purpose of the
expedited review procedures was to allow the revenue bonds to be
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sold quickly and the bond sales are now complete, there is no
need for a continued expedited review. They believe that any
review of decisions relating to other provision in AB X1 1
including the allocation of DWR's power procurement costs, the
prohibition on rate increase for residential customers using
less than 130% of base line, and the suspension of direct access
should be handled under the regular rehearing and judicial
review process.
DWR claims that the removal of the expedited rehearing and
judicial review process would lead to an increase and the number
of and duration of judicial appeals of PUC decision relating to
AB X1 1. They are additionally concerned that while the bonds
already been sold, a return to the expedited review could
jeopardized the creditworthiness of the DWR bonds. Any
downgrade in the credit ratings of the bonds will increase
certain ongoing expenses DWR must pay in relation to the bonds
and consequently increase ratepayer costs.
Under the expedited review process, several decisions have been
appealed to the California Supreme Court. In each case, the
court denied a writ of review, leaving PUC decision in place.
Many observers believe that because of the complexity of most
PUC decisions and the limited number of cases the Supreme Court
can take in a year, the court is hesitant to take direct appeals
of PUC decisions. Generally, the courts of appeal have been
more likely to hear appeals of PUC decisions. Consequently,
leaving the direct appeal process in place may limit the number
of decisions that the courts will review.
Analysis Prepared by : Edward Randolph / U. & C. / (916)
319-2083
FN: 0007726