BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 67
                                                                  Page  1

          Date of Hearing:   May 25, 2005

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                   Judy Chu, Chair

                      AB 67 (Levine) - As Amended:  May 2, 2005 

          Policy Committee:                               
          UtilitiesVote:10-0

          Urgency:     No                   State Mandated Local Program:  
          No     Reimbursable:               

           SUMMARY  

          This bill: 

          1)Requires the Public Utilities Commission (PUC) to provide to  
            the Legislature by June 1, 2006, and annually thereafter, a  
            10-year forecast of the elements within the electricity rates  
            of each class of the investor-owned utilities' (IOUs')  
            ratepayers. 

          2)Authorizes the PUC to require the submission of pro-forma  
            analyses, debt-retirement schedules, amortization schedules,  
            wholesale energy cost projections, resource plans, market  
            assessments, and related outlooks from the IOUs, gas  
            corporations, and "energy market participants," as defined by  
            the Independent System Operator.

          3)Requires the PUC to use the forecasts in developing policies  
            to reduce and eventually eliminate elements of electricity  
            rates related to debt payments from previous Department of  
            Water Resources (DWR) power purchases and stranded costs. 

          4)Requires the PUC to ensure that reductions created by (3) are  
            not replaced by other utility costs, new public goods  
            programs, or increased costs of existing public goods  
            programs.

           FISCAL EFFECT  

          Annual special fund costs to the PUC of about $100,000 to  
          produce the annual forecasts. [Public Utilities Reimbursement  
          Account]








                                                                  AB 67
                                                                  Page  2


           COMMENTS  

           Purpose  . According to the author, this bill is intended to  
          provide transparency regarding the various elements that make up  
          the electricity rates of the IOUs. More specifically, the author  
          is interested in when those elements of the rates that resulted  
          from deregulation--such as the costs associated with DWR's  
          purchases of electricity for the IOUs in 2001 and with the  
          PG&E's bankruptcy--will sunset or retire. For example, the costs  
          of DWR power purchase contracts are to decline sharply in 2009  
          and expire by 2012. In addition, the bill is intended to provide  
          the Legislature with a clear understanding of the impacts that  
          any proposals for new or augmented programs will have on  
          electricity rates.

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