BILL ANALYSIS
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UNFINISHED BUSINESS
Bill No: SB 659
Author: Soto (D)
Amended: 8/23/04
Vote: 21
PRIOR SENATE VOTES NOT RELEVANT
ASSEMBLY FLOOR : 78-0, 8/24/04 - See last page for vote
SUBJECT : Public Utilities Commission: rehearings and
judicial review
SOURCE : The Utility Reform Network
DIGEST : This bill repeals provisions in existing law
that require an expedited rehearing and expedited judicial
review of any Public Utilities Commission (PUC) decisions
arising out of the implementation of AB 1X (Keeley),
Chapter 4, Statutes of 2001.
Assembly amendments delete the prior version. As it left
the Senate, the bill made permanent the law which required
all residential electricity charges to be based on volume
of usage and prohibited the investor-owned utilities from
imposing fixed charges.
ANALYSIS : Existing law:
1. Provides that after any order or decision has been made
by CPUC, any party to the action or proceeding may apply
for a rehearing in respect to any matters determined in
CONTINUED
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the action or proceeding and specified in the
application for rehearing.
2. Specifically prohibits a cause of action arising out of
any decision of CPUC implementing the provisions of AB
1X unless an application for a rehearing has been filed
with CPUC within 10 days after the date the decision has
been issued.
3. Provides that any aggrieved party may petition for a
writ of review to a court of appeal or the California
Supreme Court for the purpose of having the lawfulness
of a CPUC decision or order determined.
4. Allows for a direct and expedited judicial review by the
California Supreme Court of any CPUC decision
implementing AB 1X.
This bill:
1. Repeals a provision that prohibits a cause of action
arising out of any decision of CPUC implementing the
provisions of AB 1X unless an application for a
rehearing has been filed with CPUC within 10 days after
the date the decision has been issued. Instead, this
bill only prohibits a cause of action from arising if an
application for rehearing is not filed within 10 for
matters relating to the State Department of Water
Resources' (DWR) power purchase revenue requirement or
which DWR determines will impact the credit rating on
any bonds DWR issued under its power purchase
obligations.
2. Provides that matters relating to DWR' power purchase
revenue requirement or which DWR determines will impact
the credit rating on any bonds DWR issued under its
power purchase obligations are subject to direct and
expedited judicial review by the California Supreme
Court.
Comments
During the energy crisis, the Legislature approved and
Governor Davis signed AB 1X, which allowed the State
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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, the bill:
1. Required CPUC to set electricity rates to cover DWR's
power purchasing costs.
2. Prohibited any future rate increased for residential
customers for usage under 130 percent of baseline
quantities.
3. Prohibited DWR from entering into any power procurement
contracts after January 1, 2003.
After AB 1X was signed into law, concerns were raised that
revenue bonds could not be issued until proceedings at CPUC
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 31X (Burton), Chapter
9, Statutes of 2001, was enacted with provisions that
called for an expedited rehearing and judicial review
process for all issues relating to AB 1X, include
provisions not directly related to the issuance of bonds.
Since the passage of AB 1X, 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 CPUC 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 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 1X including the allocation of
DWR's power procurement costs, the prohibition on rate
increase for residential customers using less than 130
percent of base line, and the suspension of direct access
should be handled under the regular rehearing and judicial
review process.
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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 CPUC
decision in place. Many observers believe that because of
the complexity of most CPUC decisions and the limited
number of cases the Supreme Court can take in a year, the
court is hesitant to take direct appeals of CPUC decisions.
Generally, the courts of appeal have been more likely to
hear appeals of CPUC decisions. Consequently, leaving the
direct appeal process in place may limit the number of
decisions that the courts will review.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
Any additional costs to the PUC for additional rehearings
and/or judicial reviews would be minor and absorbable.
SUPPORT : (Verified 8/9/04)
The Utility Reform Network (source)
ASSEMBLY FLOOR :
AYES: Aghazarian, Bates, Benoit, Berg, Bermudez, Bogh,
Calderon, Campbell, Canciamilla, Chan, Chavez, Chu,
Cogdill, Cohn, Corbett, Correa, Cox, Daucher, Diaz,
Dutra, Dutton, Dymally, Firebaugh, Frommer, Garcia,
Goldberg, Hancock, Harman, Haynes, Jerome Horton, Shirley
Horton, Houston, Jackson, Keene, Kehoe, La Malfa, La
Suer, Laird, Leno, Leslie, Levine, Lieber, Liu,
Longville, Lowenthal, Maddox, Maldonado, Matthews, Maze,
McCarthy, Montanez, Mountjoy, Mullin, Nakanishi, Nakano,
Nation, Negrete McLeod, Oropeza, Pacheco, Parra, Plescia,
Reyes, Richman, Ridley-Thomas, Runner, Salinas,
Samuelian, Simitian, Spitzer, Steinberg, Strickland,
Vargas, Wesson, Wiggins, Wolk, Wyland, Yee, Nunez
NO VOTE RECORDED: Koretz, Pavley
NC:sl 8/25/04 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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