BILL ANALYSIS
AB 1398
Page 1
ASSEMBLY THIRD READING
AB 1398 (Papan)
As Amended January 6, 2000
Majority vote
UTILITIES AND COMMERCE 9-0
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|Ayes:|Wright, Pescetti, | | |
| |Calderon, Campbell, | | |
| |Frusetta, Maddox, Papan, | | |
| |Reyes, Wesson | | |
| | | | |
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SUMMARY : Declares legislative intent to implement
recommendations of the State Auditor's audit of the San
Francisco Public Utilities Commission (SFPUC).
EXISTING LAW :
1)Provides for SFPUC to supply water at wholesale rates to
various retail water suppliers.
2)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 : 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 (i.e., 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.
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 SFPUC. The Board of
Supervisors can only approve or reject rates, but cannot alter
AB 1398
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the water rate recommendations from SFPUC.
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.
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: a) reliability of the regional water system;
b) plans for repairs and upgrades to the system; and, c)
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. This bill will be used to implement the
findings of the State Auditor's report.
Analysis Prepared by : Carolyn Veal-Hunter / U. & C. / (916)
319-2083
FN: 0004045