BILL ANALYSIS
AB 1398
Page 1
Date of Hearing: January 10, 2000
ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
Roderick Wright, Chair
AB 1398 (Papan) - As Amended: January 6, 2000
SUBJECT : San Francisco Public Utilities Commission: water
rates.
SUMMARY : Describes legislative intent to implement
recommendations of the State Auditor's audit of the San
Francisco Public Utilities Commission (SFPUC).
Specifically, this bill declares the Legislature's intent to
implement recommendations set forth in the State Auditors audit
of the San Francisco Public Utilities Commission.
EXISTING LAW provides for SFPUC to supply water at wholesale
rates to various retail water suppliers.
Prohibits a local agency from imposing fees or charges that
exceed the estimated reasonable cost of providing the service
for which the cost or fee is imposed.
FISCAL EFFECT : Unknown.
COMMENTS :
1)The SFPUC is a subdivision of the City and County of San
Francisco (San Francisco) responsible for the storage, quality
control and distribution of San Francisco's drinking water.
SFPUC provides retail drinking water and sewer services to San
Francisco, wholesale water to 29 other water agencies in three
other Bay Area Counties (San Mateo, Santa Clara and Alameda),
and hydroelectric power to government operations. The primary
water source is the Hetch Hetchy Project which provides about
85% of the water. Additional water sources include about 15%
from watersheds in San Mateo, Santa Clara and Alameda Counties
(15%).
2)Proposed water rates must be adopted by SFPUC and then be
approved by the San Francisco Board of Supervisors. None of
the 29 outside agencies are represented on the SFPUC. The
Board of Supervisors can only approve or reject rates, but
cannot alter the water rate recommendations from SFPUC.
AB 1398
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3)As currently structured, the water agencies outside San
Francisco receive water pursuant to contracts which regulate
the allocation of costs. The current contractual agreement,
which expires in 2009, establishes wholesale water rates
through a formula that assures users from the 29 other water
agencies pay only for their direct cost of delivery. They do
not subsidize water users from San Francisco. However, in
1992 citizens of San Francisco, approved an initiative to
freeze their own water rates through the year 2004. The
author has expressed concern that the freeze may have an
impact on water rates of citizens outside San Francisco.
4)In upcoming years, San Francisco is expected to perform over
$2 billion in seismic and infrastructure repairs on the Hetch
Hetchy Project. Without substantial upgrades to the delivery
system, a major earthquake could result in a severe disruption
of water supplies for the system's 2.3 million customers.
Pursuant to a request of the author, the State Auditor is
currently conducting an audit of SFPUC with regard to several
factors including: reliability of the regional water system,
plans for repairs and upgrades to the system, and long range
financial plans for funding any capitol projects, especially
in light of the freeze on San Francisco's own water rates.
The State Auditor's report is scheduled for completion in
February 2000. The author's goal is that this will be used to
implement the findings of the State Auditor's report.
REGISTERED SUPPORT / OPPOSITION :
Support
San Francisco Bay Area Water Users Association
Opposition
None on file.
Analysis Prepared by : Carolyn Veal-Hunter / U. & C. / (916)
319-2083