BILL ANALYSIS
Appropriations Committee Fiscal Summary
AB 1002 (Wright)
Hearing Date: 8/7/00 Amended:
6/19/00
As proposed to be amended by
LCR# 16057
Consultant: Bob Franzoia Policy Vote: E, U&C 7-2
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BILL SUMMARY: AB 1002 would require the Public Utilities
Commission (PUC) to establish a surcharge on all natural
gas consumed in the state to fund low-income assistance
programs, cost-effective energy efficiency and conservation
activities, and public interest research and development.
The bill would require a public utility gas corporation to
collect the surcharge from natural gas consumers. The
money from the surcharge would be deposited in the
continuously appropriated Gas Consumption Surcharge Fund,
as created by the bill. The surcharge would be collected
by the Board of Equalization (BOE).
Fiscal Impact (in thousands)
Major Provisions 2000-01 2001-02 2002-03
Fund
Surcharge $139,000 annually (revenues) Special*
Administration $70 annually (BOE) Special*
Absorbable (PUC)
* Gas Consumption Surcharge Fund
STAFF COMMENTS: This bill may meet the criteria to be
placed on the Suspense file. The state, which consumed a
minimum of 173 million therms of natural gas in 1997-98,
may incur surcharge costs of $150,000 annually.
The programs to be funded are:
- California Alternate Rates for Energy Program that
provides rate assistance to low-income gas customers.
- Low-Income Direct Assistance Program which finances
weatherization of low-income housing.
- Research, Demonstration and Development.
- Energy Efficiency Program which reduces energy demand
through the promotion of cost-effective energy conservation
and efficiency measures.
Deregulation of the gas industry has enabled federally
regulated interstate pipelines to compete with
PUC-regulated intrastate pipelines. This competition has
caused a significant exodus of large, non-core customers
from intrastate pipelines, and resulted in the reduction of
the funding base for the state's public purpose programs.
When non-core customers abandon, or bypass, the public
utility gas corporation's pipeline, their contributions to
the public purpose programs are shifted and reallocated
amongst core customers remaining on the system since
federally regulated gas pipeline users do not have these
public purpose program costs reflected in the gas prices
they pay to their supplier. This bill would require that
all customers share in funding the state's public purpose
programs that benefit core utility customers.
Staff Recommends the bill be amended to delete the
continuous appropriation in order to provide for review in
the annual budget act, thus ensuring oversight and
monitoring of the program.