BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  AB 1409
                                                                  Page  1

          Date of Hearing:   May 8, 2013

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                  Mike Gatto, Chair

            AB 1409 (Utilities and Commerce) - As Introduced:   March 13,  
                                        2013

          Policy Committee:                              Utilities and  
          Commerce     Vote:                            10-5

          Urgency:     No                   State Mandated Local Program:  
          No     Reimbursable:              

           SUMMARY  

          This bill repeals the $75 application fee for a certificate of  
          public convenience and necessity (CPCN) issued to a telephone  
          corporation and other utilities.  Instead, this bill authorizes  
          the Public Utilities Commission (PUC) to determine the fee by  
          rule or order and adjust it based on the Consumer Price Index.   
          This bill also corrects code references and makes other  
          technical changes.

           FISCAL EFFECT  

          Potential minor annual costs savings in the tens of thousands of  
          dollars range for the PUC due to the increased fee revenue.  For  
          example, there are between 15-30 telephone corporation CPCN  
          applications per year.   The PUC has proposed to set the fee at  
          $500 pending the enactment of this bill.  

          After the initial process at the PUC, new CPCN are not needed  
          for telephone corporation.  
          Only occasionally are new CPCNs needed for other public  
          utilities. 

           COMMENTS  

           1)Purpose and Background.   CPCNs are generally required before a  
            telephone corporation or other specified utility may begin  
            construction or extend a transmission line, plant or system.   
            The certificate states that the present or future public  
            convenience and necessity require such construction.   The  
            current CPCN fee has been in statute since 1969 and does not  








                                                                  AB 1409
                                                                  Page  2

            reflect the current cost to PUC to process the application.  

             The Consumer Price Index has increased 530% since 1969.  If  
            the application fee had been adjusted for inflation-the  
            current fee would be about $473.   This bill is intended to  
            increase the fee level to meet current PUC costs and give the  
            PUC the ability to raise the fee in the future without  
            legislative action.

            This bill also corrects incorrect code references that were  
            moved or repealed as a result of other enacted statutes.
           

           
           Analysis Prepared by  :    Jennifer Galehouse / APPR. / (916)  
          319-2081