BILL NUMBER: AB 1002 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY APRIL 14, 1999
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 a gas providers
utility , 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 require 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 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 gas utility, as defined
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. gas utility.
(c) Except as specified in Section 898, all persons consuming
natural gas in this state that has been transported by a gas
utility 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
public utility gas corporation .
(e) The commission shall annually establish a surcharge rate for
each class of customer for the service territory of each
utility gas provider public utility gas corporation
. A customer of a nonutility gas provider
an interstate gas pipeline, as defined in Section 891,
shall pay the same surcharge rate as the customer of a
utility gas provider with comparable natural gas usage
would pay if the customer received service from the public utility
gas corporation in whose service territory the customer resides
. 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 public utility gas
corporation . 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 an interstate pipeline in
the service territory of a utility gas provider
public utility gas corporation .
(g) The State Board of Equalization shall notify each
nonutility gas provider interstate pipeline of
the surcharge rate for each class of customer within the service
territory of a utility gas provider public
utility gas corporation .
(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.
(i) Notwithstanding subdivision (a), gas utilities
public utility gas corporations 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 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 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 natural gas provider.
The State
891. (a) "Gas utility" means any public utility gas corporation
or interstate pipeline as defined in this section.
(b) "Public utility gas corporation" means a public utility gas
corporation as defined in Section 216.
(c) "Interstate pipeline" means any entity that owns or operates a
natural gas pipeline delivering natural gas to consumers in the
state and is subject to rate regulation by the Federal Energy
Regulatory Commission.
(d) Each gas utility shall notify the State Board of Equalization
of its status under this section. The State Board of
Equalization may require any documentation that it determines to be
necessary to implement this article.
892. The revenue from the surcharge imposed pursuant to this
article and collected by utility gas providers and nonutility
gas providers gas utilities 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.
(c) To pay the commission for its costs in carrying out its duties
and responsibilities under this article.
(d) To pay the State Board of Equalization for its costs in
administering this article.
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 , as the
rights and obligations were interpreted as of January 1, 1998 .
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 or rate assistance for low-income customers shall not be
required to collect a surcharge pursuant to this article from
customers within its 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 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.
899. Sections 890 and 892 do not apply to any gas customer of a
municipality, district, or public agency exempted by Section
895 896 from collecting a surcharge.
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 2790 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
2790 . 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 2790, and may conduct financial audits
.
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.