BILL ANALYSIS                                                                                                                                                                                                    Ó          1





                SENATE ENERGY, UTILITIES AND COMMUNICATIONS COMMITTEE
                                 ALEX PADILLA, CHAIR
          

          AB 1409 -  Utilities and Commerce                      Hearing  
          Date:  June 18, 2013                 A
          As Introduced: March 13, 2013      FISCAL           B

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                                      DESCRIPTION
           
           Current law  permits the California Public Utilities Commission  
          (CPUC) to charge and collect an application fee of $ for a  
          certificate of public convenience and necessity (CPCN), or for  
          the mortgage, lease, transfer, or assignment of a certificate.  
          Public Utilities Code 1904)

           This bill  eliminates the $75 fee and instead permits the CPUC to  
          set fee and adjust at an amount no greater than inflation.

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          that were moved or repealed as a result of other enacted  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

                                      BACKGROUND
           
          Certificate of Public Convenience and Necessity - The CPCN is a  
          permit issued by the CPUC for a regulated entity to do something  
          or to establish itself as a regulated entity.  For instance an  
          electrical corporation needs a CPCN to construct a transmission  
          line or a substation, a water corporation must have one to build  
          a water facility and a telephone corporation needs a CPCN to  
          provide telephone landline service.  

                                       COMMENTS
           
          The $75 fee to file an application for a CPCN for telephone  
          corporations and other utilities except for passenger state  
          corporations, and for the mortgage, lease, transfer, or  
          assignment of a CPCN has been in statute since 1969.  The cost  











          of the CPCN application has not adjusted for inflation.   
          According to the PUC, the Consumer Price Index has increased  
          530.5% since 1969.  If the application fee had been adjusted for  
          inflation, using the CPI calculator, the fee would be  
          approximately $473.  Currently, the PUC does not have the  
          authority to raise the fee unless there is a change in statute  
          through legislative action, thus the creating the need for AB  
          1409.  

          The current CPCN application fee does not reflect the current  
          cost of PUC resources required to process the application. The  
          application requires extensive review and evaluation by an  
          Administrative Law Judge, is assigned to the Communications  
          Division to review tariffs and other technical aspects of the  
          application.  Hearings may be required due to protest filed by  
          other parties or by the PUC's Consumer Protection and Safety  
          Division due to regulatory issues in another district, or a  
          California Environmental Quality Act review if the applicant is  
          proposing to build facilities. Depending on the initial review,  
          PUC staff may require the applicant to submit additional  
          information. After all the necessary information is provided, a  
          draft decision is prepared which may be sent out for a 30-day  
          comment period.  The PUC will subsequently vote on the matter  
          after comments are addressed.

                                    ASSEMBLY VOTES
           
          Assembly Floor                     (50-21)
          Assembly Appropriations Committee  (12-5)
          Assembly Utilities and Commerce Committee                       
          (10-5)

                                       POSITIONS
           
           Sponsor:
          
          Author

           Support:
           
          California Public Utilities Commission

           Oppose:
           










          None on file.



















          Kellie Smith 
          AB 1409 Analysis
          Hearing Date:  June 18, 2013