BILL ANALYSIS Ó AB 1390 Page 1 Date of Hearing: May 4, 2011 ASSEMBLY COMMITTEE ON APPROPRIATIONS Felipe Fuentes, Chair AB 1390 (Committee on Utilities and Commerce) - As Introduced: February 23, 2011 Policy Committee: UtilitiesVote:15-0 (Consent) Urgency: No State Mandated Local Program: No Reimbursable: SUMMARY This bill requires the Attorney General (AG), until January 1, 2013, to succeed the Electricity Oversight Board (EOB) in any litigation or settlement to obtain electricity ratepayer relief as a result of the 2000-2002 energy crisis. FISCAL EFFECT Minor savings in litigation-related costs of recovery of certain ratepayer recovery funds currently held in escrow. (See below.) COMMENTS Background and Purpose . The EOB was created by AB 1890 (Brulte), Chapter 854, Statutes of 1996, which deregulated California's wholesale electricity industry. As a result of the energy crisis ten years ago, one of the EOB's primary duties was to initiate proceedings at the Federal Energy Regulatory Commission (FERC) in response to market manipulation. The EOB was been a participant in over 400 proceedings at FERC and has been a litigant in over 100 cases in the federal courts of appeal. The EOB ceased operations on April 1, 2008 and was defunded in 2008-09. Until that time, the EOB was one of the complainants in the Energy Crisis cases, along with the Public Utilities Commission (PUC), the AG, PG&E, Southern California Edison, and SDG&E (collectively, the "Cal Parties"). The Cal Parties brought the Energy Crisis cases against approximately 65 energy sellers, AB 1390 Page 2 have now settled with over half of the sellers, and continue to negotiate settlement with remaining sellers. In 2004, the Cal Parties, including the EOB, entered into an escrow agreement with JP Morgan Chase Bank to handle all future settlements. Under that agreement, the signatures of all Cal Parties (including EOB) are required to issue effective escrow instructions for the purpose of disbursing funds resulting from settlements with individual Energy Crisis-era sellers. JP Morgan will not disburse funds from those accounts without a signature from the EOB or a court order. At present, therefore, the Cal Parties have no access to the approximately $70M in those accounts. This bill allows the AG to sign for the EOB, facilitating settlement of these Energy Crisis Claims. Analysis Prepared by : Chuck Nicol / APPR. / (916) 319-2081