BILL ANALYSIS Ó AB 895 Page 1 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 | | | | |Hernández, | | | | |Obernolte, Quirk, | | | | |Santiago, Ting, | | | | |Williams | | | | | | | |----------------+------+--------------------+---------------------| |Appropriations |17-0 |Gomez, Bigelow, | | | | |Bonta, Calderon, | | | | |Chang, Daly, | | | | |Eggman, Gallagher, | | | | | | | | | | | | | | |Eduardo Garcia, | | AB 895 Page 2 | | |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 AB 895 Page 3 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 AB 895 Page 4