Amended in Senate September 1, 2015

California Legislature—2015–16 Regular Session

Assembly BillNo. 895


Introduced by Assembly Member Rendon

February 26, 2015


An actbegin insert to amend Sections 16428.3 and 16428.5 of, and to add Section 16428.25 to, the Government Code, andend insert to amend Section 453.5 of the Public Utilities Code, relating to utility rates.

LEGISLATIVE COUNSEL’S DIGEST

AB 895, as amended, Rendon. Utility rate refunds: energy crisis litigation.

Under existing law, the Public Utilities Commission has regulatory authority over public utilities. Existing law authorizes the commission to fix the rates and charges for every public utility, and requires that those rates and charges be just and reasonable. When the commission orders rate refunds to be distributed, existing law requires the commission to require the public utility to pay refunds to all current utility customers, and, when practicable, to prior customers, on an equitable pro rata basis without regard as to whether or not the customer is classifiable as a residential or commercial tenant, landlord, homeowner, business, industrial, educational, governmental, nonprofit, agricultural, or any other type of entity.

Existing law establishes the Ratepayer Relief Fund in the State Treasury to benefit electricity and natural gas ratepayers and to fund investigation and litigation costs of the state in pursuing allegations of overcharges and unfair business practices against generators, suppliers, or marketers of electricity or natural gas arising from the energy crisis of 2000-02. Existing law requires that any energy settlement agreement, as defined, entered into by the Attorney General, after reimbursing the Attorney General’s litigation and investigation expenses, direct settlement funds to the following purposes in priority order: (1) to reduce ratepayer costs of those utility ratepayers harmed by the actions of the settling parties; and (2) for deposit in the Ratepayer Relief Fund. Existing law authorizes the moneys deposited in the Ratepayer Relief Fund to be appropriated for certain purposes for the benefit of ratepayers.

This bill wouldbegin insert require the Attorney General or the Public Utilities Commission to enter into an energy settlement agreement solely on a monetary basis and would prohibit the agreement from including nonmonetary compensation in lieu of monetary compensation. The bill wouldend insert prohibit thebegin delete Public Utilities Commissionend deletebegin insert commissionend insert from distributing or expending the proceeds of claims in any litigation or settlement to obtain ratepayer recovery for the effects of the 2000-02 energy crisis and would require that thebegin delete proceedsend deletebegin insert proceeds, after reimbursing the commission’s litigation and investigation expenses,end insert be deposited into the Ratepayer Relief Fund.begin insert The bill would require the moneys in the fund to be appropriated for those purposes for the benefit of ratepayers.end insert

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

P2    1begin insert

begin insertSECTION 1.end insert  

end insert

begin insertSection 16428.25 is added to the end insertbegin insertGovernment
2Code
end insert
begin insert, end insertimmediately following Section 16428.2begin insert, to read:end insert

begin insert
3

begin insert16428.25.end insert  

(a) The Attorney General or the Public Utilities
4Commission shall enter into an energy settlement agreement solely
5on a monetary basis. The energy settlement agreement shall not
6include any nonmonetary compensation in lieu of monetary
7compensation.

8(b) The section does not apply to a settlement agreement entered
9into before January 1, 2016.

end insert
10begin insert

begin insertSEC. 2.end insert  

end insert

begin insertSection 16428.3 of the end insertbegin insertGovernment Codeend insertbegin insert is amended
11to read:end insert

12

16428.3.  

begin delete(a)end deletebegin deleteend deleteAny energy settlement agreement entered into
13by the Attorney General, after reimbursing the Attorney General’s
14litigation and investigation expenses, to the maximum extent
15possible, shall direct settlement funds to the following purposes
16in priority order:

begin delete

P3    1(1)

end delete

2begin insert(a)end insert To reduce ratepayer costs of those utility ratepayers harmed
3by the actions of the settling parties. To the extent the ratepayers
4of the investor-owned utilities were harmed, the settlement funds
5shall be directed to reduce their costs, to the maximum extent
6possible, through reduction of rates or the reduction of ratepayer
7debt obligations incurred as a result of the energy crisis.

begin delete

8(2)

end delete

9begin insert(b)end insert For deposit in the fund.

begin delete

10(b) Nothing in this article shall preclude nonmonetary
11compensation to the state through an energy settlement agreement,
12provided that the allocation of benefits from any nonmonetary
13compensation is consistent with paragraph (1) of subdivision (a).

end delete
14begin insert

begin insertSEC. 3.end insert  

end insert

begin insertSection 16428.5 of the end insertbegin insertGovernment Codeend insertbegin insert is amended
15to read:end insert

16

16428.5.  

Moneys in the fund shall be expended upon
17appropriation by the Legislature, for the benefit of ratepayers.
18Moneys in the fundbegin delete mayend deletebegin insert shallend insert be appropriated for the following
19purposes:

begin delete

20(a) To finance energy litigation and investigation expenses of
21state entities.

end delete
begin delete

22(b)

end delete

23begin insert(a)end insert To reduce rates for customers in the affected service areas
24of electrical utilities and gas utilities.

begin delete

25(c)

end delete

26begin insert(b)end insert To reduce the debt service on bonds issued pursuant to
27Division 27 (commencing with Section 80000) of the Water Code.

28

begin deleteSECTION 1.end delete
29begin insertSEC. 4.end insert  

Section 453.5 of the Public Utilities Code is amended
30to read:

31

453.5.  

(a) (1) If the commission orders rate refunds to be
32distributed, the commission shall require public utilities to pay
33refunds to all current utility customers, and, when practicable, to
34prior customers, on an equitable pro rata basis without regard as
35to whether or not the customer is classifiable as a residential or
36commercial tenant, landlord, homeowner, business, industrial,
37educational, governmental, nonprofit, agricultural, or any other
38type of entity.

39(2) For the purposes of this section, “equitable pro rata basis”
40means in proportion to the amount originally paid for the utility
P4    1service involved, or in proportion to the amount of the utility
2service actually received.

3(3) This section shall not prevent the commission from
4authorizing refunds to residential and other small customers to be
5based on current usage.

6(b) (1) The commission shall not distribute or expend the
7proceeds of claims in any litigation or settlement to obtain ratepayer
8recovery for the effects of the 2000-02 energy crisis.

9(2) Proceeds of any claimsbegin insert recovered by the commissionend insert arising
10out of the energy crisis ofbegin delete 2000-02end deletebegin insert 2000-02, after reimbursing
11the commission’s litigation and investigation expenses, to the
12maximum extent possible,end insert
shall be deposited into the Ratepayer
13Relief Fund established pursuant tobegin delete Article 9.5 (commencing with
14Section 16428.1) of Chapter 2 of Part 2 of Division 4 of Title 2end delete

15begin insert Section 16428.15 of the Government Code and expended, upon
16appropriation, for purposes set forth in Section 16428.5end insert
of the
17Government Code.

18begin insert

begin insertSEC. 5.end insert  

end insert

begin insertThis act does not apply to any claims brought by an
19electrical corporation, as defined in Section 218 of the Public
20Utilities Code, that arise from the energy crisis of 2000-02.end insert



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