BILL NUMBER: AB 1002 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY APRIL 26, 1999
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 a gas 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 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 repeal a specified existing tariff adopted
by the commission and replace it with a tariff based on a prescribed
calculation. The bill would require that new tariff to apply until
the commission determines that workable competition exists, at which
point the bill would require the commission to allow a public utility
gas corporation, as defined, to provide service at competitive
market-based rates . The bill would provide an
unspecified definition of workable competition. 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
and the tariff .
(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 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 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 public utility gas corporation.
(e) The commission shall annually establish a surcharge rate for
each class of customer for the service territory of each public
utility gas corporation. A customer of an interstate gas pipeline,
as defined in Section 891, shall pay the same surcharge rate as the
customer 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 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 an
interstate pipeline in the service territory of a public utility gas
corporation.
(g) The State Board of Equalization shall notify each interstate
pipeline of the surcharge rate for each class of customer within the
service territory of a 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), 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. (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 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 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 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 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 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. all of the following:
(a) The Federal Energy Regulatory Commission certifies the
construction of interstate natural gas pipelines that provide an
alternative for noncore natural gas customers in this state.
(b) The introduction of federally regulated pipelines for the
transport of natural gas provides reasonable alternatives for the
transport of natural gas, and is an indication that a competitive
marketplace is emerging for the transport of natural gas.
(c) It is the intent of the Legislature that, to eliminate the
uneconomic environment and establish a competitive market, public
utility gas corporations should be allowed to provide service to
customers who bypass a utility system at competitive market-based
rates.
902. (a) The commission shall repeal the existing residual load
service tariff adopted by the commission, known as the RLS tariff,
and replace it with a tariff based on the calculation described in
subdivision (b).
(b) For customers who bypass a utility system, the tariff rate
shall include a monthly demand charge, applied during the month of
utility system usage, using a calculation based 50 percent on the
customer's monthly peak usage and 50 percent on the customer's usage
on the public utility gas corporation's annual system peak day.
(c) The tariff described in subdivision (a) shall apply until the
commission determines that workable competition exists. If the
commission determines that workable competition exists, the
commission shall allow a public utility gas corporation to provide
service at competitive market-based rates. As used in this section,
"workable competition" means ____.
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.