BILL NUMBER: SB 797 INTRODUCED
BILL TEXT
INTRODUCED BY Senator Costa
FEBRUARY 25, 1999
An act to amend Sections 851 and 853 of the Public Utilities Code,
relating to public utilities.
LEGISLATIVE COUNSEL'S DIGEST
SB 797, as introduced, Costa. Public utilities: property.
Existing law requires a public utility other than a specified
common carrier to secure authorization from the Public Utilities
Commission before disposing of or encumbering certain property
necessary or useful in the performance of its duties to the public,
or any related franchise, permit, or right. Existing law states that
the above provision shall not prevent the disposition by any public
utility of property that is not necessary or useful in the
performance of its duties to the public, and any disposition of
property by a public utility shall be conclusively presumed to be of
property that is not useful or necessary in the performance of its
duties to the public. Existing law authorizes the commission, by
order or rule, to exempt any public utility or class of public
utility from provisions governing the disposal of utility property,
as prescribed.
This bill would modify those provisions relating to the disposal
of public utility property to apply only to property necessary in the
performance of duties of the public utility to the public, or any
related franchise, permit, or right. The bill would require the
commission, on or before July 1, 2000, to designate, by rule or
order, categories of public utility property that a public utility
may sell, lease, or otherwise dispose of or encumber, as determined
to be necessary by that public utility, without further approval.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. (a) The Legislature finds and declares all of the
following:
(1) In enacting electric industry restructuring legislation in
1996 (Chapter 854 of the Statutes of 1996), the Legislature found and
declared that competition will encourage innovation, efficiency, and
better service in certain electricity markets, and will permit the
reduction of costly regulatory oversight.
(2) The same state policies regarding the benefits of competition
that are applicable to electric power also apply to certain natural
gas utility services.
(3) The Public Utilities Commission needs to implement reforms of
its regulatory procedures to secure to state consumers and businesses
the full benefits of competition in the sale and disposition of
surplus utility assets in light of electric and gas industry
restructuring and other changes in electric and gas utility services.
(b) It is the intent of the Legislature in enacting this act to
ensure that the Public Utilities Commission streamlines its processes
for the sale and disposition of electric and gas utility assets that
are no longer necessary for utility service or that would be better
utilized through sale or disposition. It is the further intent of
the Legislature in enacting this act that the determination by the
Public Utilities Commission of new regulatory procedures for the sale
and disposition of those assets should be expedited and implemented
as soon as possible, to benefit consumers and the marketplace.
SEC. 2. Section 851 of the Public Utilities Code is amended to
read:
851. (a) No public utility other than a common carrier
by railroad subject to Part I of the federal Interstate
Commerce Act ( Title 49 , U.S.C.
U.S.C. Sec. 10101 and following ) shall sell,
lease, assign, mortgage, or otherwise dispose of or encumber the
whole or any part of its railroad, street railroad, line, plant,
system, or other property necessary or useful in
the performance of its duties to the public, or any franchise or
permit or any right thereunder, nor by any means whatsoever, directly
or indirectly, merge or consolidate its railroad, street railroad,
line, plant, system, or other property, or franchises or permits or
any part thereof, with any other public utility, without first having
secured from the commission an order authorizing it so to do. Every
such sale, lease, assignment, mortgage,
disposition, encumbrance, merger, or consolidation made other than in
accordance with the order of the commission authorizing it is void.
The permission and approval of the commission to the exercise of a
franchise or permit under Article 1 (commencing with Section 1001) of
Chapter 5 of this part, or the sale, lease, assignment, mortgage, or
other disposition or encumbrance of a franchise or permit under this
article shall not revive or validate any lapsed or invalid franchise
or permit, or enlarge or add to the powers or privileges contained
in the grant of any franchise or permit, or waive any forfeiture.
Nothing
(b) Nothing in this section shall prevent the sale, lease,
encumbrance or other disposition by any public utility of property
which that is not necessary or
useful in the performance of its duties to the public, and
any disposition of property by a public utility shall be
conclusively presumed to be of property which
that is not useful or necessary in the
performance of its duties to the public, as to any purchaser, lessee
or encumbrancer dealing with such the
property in good faith for value ; provided, however, that
nothing . Nothing in this section shall
apply applies to the interchange of equipment
in the regular course of transportation between connecting common
carriers.
SEC. 3. Section 853 of the Public Utilities Code is amended to
read:
853. (a) This article does not apply to any person or corporation
which that transacts no business
subject to regulation under this part, except performing services or
delivering commodities for or to public utilities or municipal
corporations or other public agencies primarily for resale or use in
serving the public or any portion thereof, but shall apply to any
public utility, and any subsidiary or affiliate of, or corporation
holding a controlling interest in, a public utility, if the
commission finds, in a proceeding to which the public utility is or
may become a party, that the application of this article is required
by the public interest.
(b) The commission may from time to time ,
by order or rule, and subject to those terms and conditions
as may be prescribed therein, exempt any public
utility or class of public utility from this article if it
the commission finds that the application
thereof of this article with respect to
the public utility or class of public utility is not necessary
in to protect the public interest. The
commission may establish rules or impose requirements
deemed that it determines to be necessary to
protect the interest of the customers or subscribers of the public
utility or class of public utility exempted under this subdivision.
These rules or requirements may include, but are not limited to,
notification of a proposed sale or transfer of assets or stock and
provision for refunds or credits to customers or subscribers.
(c) On or before July 1, 2000, the commission, by rule or order,
shall designate categories of public utility property that a public
utility may sell, lease, or otherwise dispose of or encumber, as
determined to be necessary by that public utility, without further
approval pursuant to this article.