BILL NUMBER: AB 1002 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY APRIL 6, 1999
INTRODUCED BY Assembly Member Wright
FEBRUARY 25, 1999
An act to add Article 10 (commencing with Section 890) to Chapter
4 of Part 1 of Division 1 of the Public Utilities Code, relating to
public utilities, and making an appropriation therefor.
LEGISLATIVE COUNSEL'S DIGEST
AB 1002, as amended, R. Wright. Natural gas: consumption
surcharge.
(1) The Public Utilities Act and other existing law requires
electrical and gas corporations to create certain public purpose
programs, including assistance to low-income customers and low-income
weatherization. The act authorizes the Public Utilities Commission
to allow the inclusion of expenses for research and development in
rates to be charged by, among other utilities, gas corporations.
This bill, except as specified, would require the commission to
impose a surcharge on all natural gas consumed in this state to fund
those public purpose programs, cost-effective energy efficiency and
conservation activities, and public interest research and
development, as prescribed. The bill would require utility and
nonutility gas providers, as described, to collect the surcharge from
natural gas consumers, as specified. The money from the
surcharge would be deposited in the Gas Consumption Surcharge Fund,
which fund the bill would create, for continuous appropriation to
specified entities, as prescribed. This bill would authorize
the commission to authorize a gas corporation to offer natural gas
service to customers who partially or fully bypass the distribution
system of the gas corporation at competitive market-based rates filed
with the commission, as specified. Because a violation of the
act is a crime, this bill would impose a state-mandated local program
by creating a new crime. The bill would make legislative findings
and declarations relating to the surcharge.
(2) The California Constitution requires the state to reimburse
local agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that no reimbursement is required by this
act for a specified reason.
Vote: 2/3. Appropriation: yes. Fiscal committee: yes.
State-mandated local program: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. (a) The Legislature finds and declares that statutes
and regulations have imposed programs and fees, such as
low-income assistance energy efficiency, public
interest research and development, low-income assistance, and
weatherization programs, upon regulated gas utilities that have
public policy goals not directly related to the provision of gas
service. The costs borne by gas utilities to provide these programs
have historically been recovered through gas rates established by the
Public Utilities Commission.
(b) The Legislature also finds and declares that, due to changes
in state and federal regulations, the monopolies for the provisions
of gas service in California that effectively permitted the
commission to allocate the cost of these public policy programs to
all gas users are being replaced with competitive markets. Gas
customers may continue to take advantage of the deregulation of the
gas industries by obtaining service from nonregulated gas providers
who are not required to provide these programs. Thus, these
customers do not pay the costs of public policy programs.
(c) It is the intent of the Legislature to continue public policy
programs in an equitable manner that will ensure that all gas
consumers will provide a fair share of adequate funding for these
programs without increasing the current funding levels for these
programs.
SEC. 2. Article 10 (commencing with Section 890) is added to
Chapter 4 of Part 1 of Division 1 of the Public Utilities Code, to
read:
Article 10. Natural Gas Surcharge
890. (a) No later than January 1, 2000, the commission shall
impose a surcharge, as provided in this article, on all natural gas
consumed in this state to fund low-income assistance programs
required by Sections 739.1, 739.2, and 2790, cost-effective energy
efficiency and conservation activities, and public interest research
and development authorized by Section 740 that is not adequately
provided by the competitive and regulated markets. Upon
implementation of this article, funding for those programs shall be
removed from the rates of gas utilities.
(b) Except as specified in Section 898, a utility gas
provider, as described in Section 891, shall collect the surcharge
imposed pursuant to subdivision (a) from any person consuming natural
gas in this state who receives gas service from the utility gas
provider. A nonutility gas provider, as described in Section 891,
shall collect the surcharge imposed pursuant to subdivision (a) from
any person consuming natural gas in this state who receives gas
service from that nonutility gas provider.
(c) Except as specified in Section 898, all persons consuming
natural gas in this state shall be liable for the surcharge imposed
pursuant to subdivision (a).
(d) The commission shall annually determine the amount of
money required for the following year to administer this chapter and
fund the natural gas related programs described in subdivision (a)
for the service territory of each utility gas provider .
(c)
(e) The commission shall annually establish a surcharge rate
for each class of customer for the service territory of each
utility gas provider. A customer of a nonutility gas provider shall
pay the same surcharge rate as the customer of a utility gas provider
with comparable natural gas usage. The commission shall, in
determining the total retail natural gas transported within the
service territory of a utility gas provider for the purpose of
establishing the surcharge rate, shall rely on information reported
in the California Gas Report to determine the volumes of retail gas
transported within the service territory of the utility gas provider
. The commission shall allocate the surcharge for gas used by
noncore customers, including those customers who were not subject to
the surcharge prior to January 1, 2000, on an equal cent per therm
basis. The rates for core customers shall not be affected by
the inclusion of those noncore customers who were not required to
fund the programs described in subdivision (a) prior to January 1,
2000.
(f) The commission shall notify the State Board of Equalization of
the surcharge rate for each class of customer served by a nonutility
provider in the service territory of a utility gas provider.
(g) The State Board of Equalization shall notify each nonutility
gas provider of the surcharge rate for each class of customer within
the service territory of a utility gas provider.
(d)
(h) The surcharge imposed pursuant to subdivision (a) shall be in
addition to any other charges for natural gas sold or transported for
consumption in this state. The surcharge imposed pursuant to
this article shall be identified as a separate line item on all gas
bills received by each class of customer.
(e)
(i) Notwithstanding subdivision (a), gas utilities shall
continue to collect in rates those costs of programs associated with
Sections 739.1, 739.2, and 2790 that are uncollected prior to the
operative date of this article.
891. Each utility gas corporation
transporting or selling natural gas for consumption in this state
shall notify the State Board of Equalization that it is a utility gas
provider. Each nonutility pipeline company
transporting natural gas in this state that operates pursuant to
a certificate issued by the Federal Energy Regulatory Commission and
that is not regulated by the commission shall notify the State
Board of Equalization that it is a nonutility gas
transporter natural gas provider . The State
Board of Equalization may require any documentation that it
determines to be necessary to implement this article. The
State Board of Equalization shall provide the commission with
information necessary to establish a surcharge pursuant to Section
890.
892. "Consumption" means the utilization or employment of natural
gas. Consumption does not include the use or employment of natural
gas to generate power for sale, the sale or purchase of natural gas
for resale to end users, or natural gas utilized in cogeneration
technology projects to produce electricity in accordance with Section
454.4 of the Public Utilities Code.
893. Except as specified in Section 897, all utility gas
providers shall collect a surcharge pursuant to this article from
persons consuming natural gas in this state who receive gas service
from a utility. All nonutility gas pipelines shall collect that
surcharge from persons consuming natural gas in this state who
receive gas transportation service from a nonutility gas transporter.
The surcharge shall be in addition to the charges for the natural
gas sold or transported for consumption in this state.
894. The revenue from the surcharge imposed pursuant to this
article and collected by utility gas providers and nonutility gas
providers shall be paid to the State Board of Equalization.
895. Except as specified in Section 892, all persons consuming
natural gas in this state shall be liable for the surcharge imposed
pursuant to this article.
896. (a) All money required to be paid to the state under this
article shall be paid in the form of remittances payable to the State
Board of Equalization. The board shall transmit the payments to the
Treasurer to be deposited in the Gas Consumption Surcharge Fund,
which is hereby created in the State Treasury.
(b) Notwithstanding Section 13340 of the Government Code, funds in
the Gas Consumption Surcharge Fund are continuously appropriated
solely for the following, to be paid by the Controller as follows:
(1) To pay eligible persons providing natural gas related programs
and projects specified in subdivision (a) of Section 890. This
amount shall not exceed the amount determined by the commission to
fund those programs.
892. The revenue from the surcharge imposed pursuant to this
article and collected by utility gas providers and nonutility gas
providers shall be paid to the State Board of Equalization in the
form of remittances. The board shall transmit the payments to the
Treasurer who shall deposit the payments in the Gas Consumption
Surcharge Fund, which is hereby created in the State Treasury.
893. The State Board of Equalization shall administer the
surcharge imposed pursuant to this article in accordance with the Fee
Collection Procedures Law (Part 30 (commencing with Section 55001)
of Division 2 of the Revenue and Taxation Code.
894. The State Board of Equalization may collect any unpaid
surcharge imposed pursuant to this article.
895. Notwithstanding Section 13340 of the Government Code, funds
in the Gas Consumption Surcharge Fund are continuously appropriated,
without regard to fiscal years, as follows:
(a) To the commission or an entity designated by the commission to
fund programs pursuant to Sections 739.1, 739.2, and 2790.
(b) To the California Board for Energy Efficiency, or an entity
designated by the commission, to fund public interest research and
development not adequately provided by the competitive and regulated
markets.
(2)
(c) To pay the commission for its costs in carrying out its
duties and responsibilities under this article.
(3) To pay the Controller for its costs in administering this
article.
(4)
(d) To pay the State Board of Equalization for its costs in
administering this article.
897.
896. "Consumption" means the use or employment of natural gas.
Consumption does not include the use or employment of natural gas to
generate power for sale, the sale or purchase of natural gas for
resale to end users, the sale or use of gas for enhanced oil
recovery, or natural gas utilized in cogeneration technology projects
to produce electricity.
897. Nothing in this article impairs the rights and obligations
of parties to contracts approved by the commission.
898. Notwithstanding Section 890, a municipality, district,
or public agency that provides programs similar to those
described in subdivision (a) of Section 890, including home
weatherization services for low-income customers or that
offers rate assistance to low-income customers shall not be
weatherization services or rate assistance for low-income
customers shall not be required to collect a surcharge pursuant
to this article from customers within its jurisdiction
service territory . A municipality, district,
or public agency shall be required to collect a surcharge pursuant to
this article from customers served by the municipality, district, or
public agency outside of its jurisdiction
service territory unless the commission determines that the
entity offers those customers services similar to those offered by
gas utilities as described in subdivision (a) of Section 890.
898. Sections 895 and 896 shall
899. Sections 890 and 892 do not apply to any gas customer
of a municipality, district, or public agency exempted by Section
897 895 from collecting a surcharge.
899. The State Board of Equalization shall administer the
surcharge imposed pursuant to this article in accordance with the Fee
Collection Procedures Law (Part 30 (commencing with Section 55001)
of Division 2 of the Revenue and Taxation Code).
900. The State Board of Equalization shall have the authority to
collect any unpaid surcharges imposed pursuant to this article.
900. The commission shall create an advisory board to make
recommendations regarding the most efficient and cost-effective way
to provide programs pursuant to Sections 739.1, 739.2, and 2970 in a
consistent manner statewide by utility provider service territory.
The advisory board shall be comprised of representatives from utility
gas providers, nonutility gas providers, the Office of Ratepayer
Advocates, the Energy Division within the commission, consumer
groups, community-based organizations providing programs, and other
interested parties. On or before July 1, 2000, the advisory group
shall prepare and submit to the commission a report. The commission
may accept, reject, or modify the recommendations. On or before July
1, 2001, the commission shall implement efficient and cost-effective
programs pursuant to Sections 739.1, 739.2, and 2970. The
commission may conduct compliance audits to ensure compliance with
any commission order or resolution relating to the implementation of
programs pursuant to Sections 739.1, 739.2, and 2970.
901. (a) The Legislature finds and declares that recent changes
in the natural gas industry have provided natural gas customers with
the opportunity to take some or all of their natural gas services
from natural gas providers regulated by the Federal Regulatory Energy
Commission. Despite these changes in the industry, natural gas
corporations regulated by the Public Utilities Commission continue to
have an obligation to serve customers who partially or fully bypass
their distribution system.
(b) It is the intent of the Legislature to authorize gas
corporations to fulfill their obligation to serve customers who
partially or fully bypass the gas corporation's distribution system
by offering service at competitive market-based rates.
(c) The commission shall authorize a gas corporation to offer to
provide natural gas service to customers who partially or fully
bypass the gas corporation's distribution system at competitive
market-based rates filed with the commission.
(d) Notwithstanding subdivision (c), the commission shall not
approve any rate application that relieves the gas corporation of the
obligation to serve wholesale customers where the bypass gas supply
is natural gas produced and consumed within the service territory of
the wholesale customer.
SEC. 3. No reimbursement is required by this act pursuant to
Section 6 of Article XIIIB of the California Constitution because the
only costs that may be incurred by a local agency or school district
will be incurred because this act creates a new crime or infraction,
eliminates a crime or infraction, or changes the penalty for a crime
or infraction, within the meaning of Section 17556 of the Government
Code, or changes the definition of a crime within the meaning of
Section 6 of Article XIIIB of the California Constitution.