BILL NUMBER: SB 1973	INTRODUCED
	BILL TEXT


INTRODUCED BY   Senator Perata

                        FEBRUARY 25, 2000

   An act to add Chapter 8.3 (commencing with Section 1450) to Part 1
of Division 1 of the Public Utilities Code, relating to public
utilities.



	LEGISLATIVE COUNSEL'S DIGEST


   SB 1973, as introduced, Perata.  Public Utilities Commission:
water conveyance:  fair compensation.
   Existing law prohibits the state or a regional or local public
agency from denying a bona fide transferor of water, as defined, from
using a water conveyance facility that has unused capacity for the
period of time for which that capacity is available, if fair
compensation is paid for that use and other requirements are met.
Existing law defines "fair compensation" to mean the reasonable
charges incurred by the owner of the conveyance system, as specified.

   This bill would authorize any bona fide transferor to file a
petition with the Public Utilities Commission for a determination of
the fair compensation that a state, regional, or local public agency
that owns a water conveyance facility may charge for the bona fide
transferor's proposed use of unused capacity in the facility.  The
bill would give the commission exclusive authority to determine the
fair compensation applicable to the proposed use of unused capacity,
as prescribed.
   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.  Chapter 8.3 (commencing with Section 1450) is added to
Part 1 of Division 1 of the Public Utilities Code, to read:

      CHAPTER 8.3.  DETERMINATION OF FAIR COMPENSATION FOR JOINT USE
OF CAPACITY IN WATER CONVEYANCE FACILITIES

   1450.  The Legislature finds and declares all of the following:
   (a) In 1986, the Legislature enacted Article 4 (commencing with
Section 1810) of Chapter 10.5 of Part 2 of Division 2 of the Water
Code, commonly referred to as the wheeling statutes, declaring at
that time that it was the policy of the state to facilitate the
voluntary sale, lease, and exchange of water and to allow open access
to water conveyance facilities where there is unused capacity, if
fair compensation is paid.
   (b) The purpose of a voluntary water market is to create greater
efficiencies and meet increasing demands for additional water
supplies while creating relatively equal opportunities for all market
participants.
   (c) A functioning wholesale water market, which necessarily
includes the assurance of reasonable wheeling charges for unused
capacity, should provide voluntary sellers of water with the
opportunity to sell to more than one buyer, and should provide
voluntary buyers of water with the opportunity to buy from more than
one seller.  By contrast, without the assurance of reasonable
wheeling charges, competition among voluntary buyers and sellers of
water will be reduced or eliminated.  In addition, wholesale water
customers should benefit from the assurance of reasonable wheeling
charges because it should facilitate cost-effective options for
locating additional water supplies.
   (d) It is the intent of the Legislature, that upon the filing of a
petition by a bona fide transferor, the commission have the
exclusive authority to determine the amount of fair compensation that
a state, regional, or local public agency that owns a water
conveyance facility may charge for the transferor's use of unused
capacity in the facility.
   1451.  (a) As used in this section, the terms "bona fide
transferor," "fair compensation," and "unused capacity" have the same
meanings as defined in Section 1811 of the Water Code.
   (b) Notwithstanding Section 1812 of the Water Code, any bona fide
transferor may file a petition with the commission for a
determination of the amount of fair compensation that a state,
regional, or local public agency that owns a water conveyance
facility may charge for a bona fide transferor's proposed use of
unused capacity in the facility.
   (c) The commission, upon the filing of a petition pursuant to
subdivision (b), shall have the exclusive authority to determine and
set the amount of fair compensation applicable to the proposed use of
unused capacity.
   (d) The commission shall cause a copy of the petition to be served
upon the affected public water conveyance facility owner.
   (e) The commission shall immediately commence hearing proceedings
in accordance with Chapter 9 (commencing with Section 1701).
   (f) In making its determination setting the amount of fair
compensation, the commission may include only the costs incurred from
the use of the particular facilities and services used in connection
with a water transfer. Those costs may include the recapture of the
legitimate capital investment of the water conveyance facility owner
in its water delivery infrastructure association with the particular
services and facilities used, as determined by the commission,
including legitimate operation and maintenance costs associated with
the facilities, in recognition of the fiduciary responsibilities of
the water conveyance facility owner to protect the integrity of the
system that it operates.  Any determination of fair compensation by
the commission may not include charges to allow the water conveyance
facility owner to recover costs for all of its facilities on a
systemwide basis.