BILL ANALYSIS                                                                                                                                                                                                    ”



                                                                       AB 895


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          ASSEMBLY THIRD READING


          AB  
          895 (Rendon)


          As Introduced  February 26, 2015


          Majority vote


           ------------------------------------------------------------------ 
          |Committee       |Votes |Ayes                |Noes                 |
          |                |      |                    |                     |
          |                |      |                    |                     |
          |----------------+------+--------------------+---------------------|
          |Utilities       |15-0  |Rendon, Patterson,  |                     |
          |                |      |Achadjian, Bonilla, |                     |
          |                |      |Burke, Dahle,       |                     |
          |                |      |Eggman,             |                     |
          |                |      |                    |                     |
          |                |      |                    |                     |
          |                |      |Cristina Garcia,    |                     |
          |                |      |Hadley, Roger       |                     |
          |                |      |HernŠndez,          |                     |
          |                |      |Obernolte, Quirk,   |                     |
          |                |      |Santiago, Ting,     |                     |
          |                |      |Williams            |                     |
          |                |      |                    |                     |
          |----------------+------+--------------------+---------------------|
          |Appropriations  |17-0  |Gomez, Bigelow,     |                     |
          |                |      |Bonta, Calderon,    |                     |
          |                |      |Chang, Daly,        |                     |
          |                |      |Eggman, Gallagher,  |                     |
          |                |      |                    |                     |
          |                |      |                    |                     |
          |                |      |Eduardo Garcia,     |                     |








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          |                |      |Gordon, Holden,     |                     |
          |                |      |Jones, Quirk,       |                     |
          |                |      |Rendon, Wagner,     |                     |
          |                |      |Weber, Wood         |                     |
          |                |      |                    |                     |
          |                |      |                    |                     |
           ------------------------------------------------------------------ 


          SUMMARY:  Directs money collected from litigation claims  
          associated with the 2000 to 2002 energy crisis away from the  
          California Public Utilities Commission (CPUC) programs and towards  
          the Ratepayer Relief Fund, ensuring legislative oversight over the  
          use of these funds.


          FISCAL EFFECT:  According to the Assembly Appropriations  
          Committee, unknown future, likely significant, revenues available  
          for Legislature to expend on programs to benefit ratepayers. To  
          date, energy crisis litigation has gleaned over $5 billion for the  
          state. 



          COMMENTS:  



           1)Purpose:  The purpose of this bill is to ensure legislative  
            oversight of the use of ratepayer refunds resulting from  
            electricity crisis litigation.



          2)Energy crisis background:  In 1996, the Legislature established  
            a deregulated electricity market.  In 2000, a serious drought  
            diminished the supply of inexpensive hydropower.  The resulting  
            increased electricity prices, inadequate infrastructure, and the  
            deteriorating financial stability of the investor-owned  








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            utilities triggered an electricity crisis.  During the crisis,  
            market manipulation resulted in high retail electricity prices  
            and power outages throughout the state. Since that time, various  
            lawsuits have sought billions of dollars in refunds.  Litigation  
            continues to this day, resulting in settlements and judgments in  
            favor of California electric ratepayers.  The Attorney General's  
            Office has negotiated upwards of $2 billion in settlement  
            agreements related to the energy crisis.



            A recent out-of-court case settlement (Dynegy 2012), negotiated  
            by the CPUC, resulted in money being spent on developing a  
            statewide electric vehicle charging program, rather than on  
            refunding ratepayers.  This program is not meeting the  
            milestones specified in the settlement order, raising questions  
            about the supposed benefit to ratepayers and the effectiveness  
            of the current process. 


          3)Role of the Ratepayer Relief Fund:  The Ratepayer Relief Fund  
            was established primarily to benefit ratepayers, and fund  
            investigation and litigation costs of the state in pursuing  
            allegations of overcharges or unfair practices that adversely  
            affected ratepayers.  In directing settlement money into the  
            Ratepayer Relief Fund, this bill ensures that the money truly  
            benefits ratepayers and is spent in accordance with the  
            principles of the Ratepayer Relief Fund and the legislature. 




          Analysis Prepared by:                                               
                          Allegra Roth / U. & C. / (916) 319-2083  FN:  
          0000711












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