BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  SB 1533
                                                                  Page  1

          Date of Hearing:   August 8, 2012

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                Felipe Fuentes, Chair

                    SB 1533 (Padilla) - As Amended:  May 1, 2012 

          Policy Committee:                              
          UtilitiesVote:12-0 (Consent)

          Urgency:     No                   State Mandated Local Program: 
          No     Reimbursable:               

           SUMMARY  


          This bill extends, from January 1, 2013 to January 1, 2016, the 
          requirement for the Attorney General (AG) to represent the 
          Department of Finance and 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  

          The bill will result in absorbable costs to the AG and allow 
          continued resolution of energy crisis-related litigation, 
          including receipt of any resulting settlement revenues to 
          benefit ratepayers and the state.

           COMMENTS  

           Background and Purpose  . The EOB was created by AB 1890 
          (Brulte)/Chapter 854 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 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 








                                                                  SB 1533
                                                                  Page  2

          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, 
          have now settled with many 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. 
          Difficulties in getting EOB signatures on settlement agreements 
          and escrow disbursement instructions surfaced in 2007, when the 
          EOB was being dismantled. AB 1390 (Utilities and Commerce 
          Committee)/Chapter 179 of 2011, designated the AG to assume the 
          EOB's authority and responsibilities regarding this litigation. 
          SB 1533 extends this authority for an additional three years to 
          allow for continued settlement of claims and disbursement of 
          escrow funds.

           Analysis Prepared by  :    Chuck Nicol / APPR. / (916) 319-2081