BILL ANALYSIS Ó AB 1524 Page 1 Date of Hearing: April 20, 2015 ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE Anthony Rendon, Chair AB 1524 (Committee on Utilities and Commerce) - As Introduced March 16, 2015 SUBJECT: Electricity: energy crisis litigation SUMMARY: This bill extends the sunset date on current law that requires the Attorney General to represent the Department of Finance in any litigation or settlement to obtain ratepayer recovery for the effects of the 2000-02 energy crisis, from January 1, 2016 to January 1, 2018. EXISTING LAW: Authorizes, until January 1, 2016, the Attorney General to represent the Department of Finance and to succeed to all rights, claims, powers, and entitlements of the Electricity Oversight Board in any litigation or settlement to obtain ratepayer recovery for the effects of the 2000-02 energy crisis. Existing law additionally prohibits the Attorney General from expending the proceeds of any settlements of those claims, except as specified. (Public Utilities Code 343) FISCAL EFFECT: Unknown AB 1524 Page 2 COMMENTS: 1)Background. As part of the 2007-08 budget process, the Governor proposed an EOB budget of $4.1 million, but also proposed budget bill language which authorized the Director of Finance to reduce appropriations to EOB. Although savings were reflected, the Governor's proposal did not specify how EOB's existing workload and authority would be transferred to another state agency. In response, the Legislature stated in budget hearings that elimination of the EOB and transfer of its remaining duties should be addressed in the policy committee process. Accordingly, the Legislature approved the EOB's operating budget and rejected the proposal to authorize the Director of Finance to reduce its budget appropriation. The Governor vetoed the Legislature's decision to appropriate funding for the EOB then exercised his veto authority to reduce EOB's 2007-08 budget by 25 percent. In his veto message, the Governor declared his expectation that, by April 1, 2008, the EOB would be eliminated and its duties transferred to the PUC. The following year, the Governor's 2008-09 budget proposal included no funding for EOB and restated his intent that EOB cease its operations by April 1, 2008. Until defunded in 2008, the EOB was one of the complainants in the Energy Crisis cases, along with the PUC, Attorney General (AG), Pacific Gas & Electric, Southern California Edison, San Diego Gas & Electric (collectively, the "Cal Parties"). The Cal Parties brought the Energy Crisis cases against approximately 65 energy sellers, have now settled with over half of the sellers, and continue to negotiate settlement with the remaining sellers. In 2004, the Cal Parties, including 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 the EOB, are required to issue effective escrow instructions for the AB 1524 Page 3 purpose of disbursing funds resulting from settlements with individual Energy Crisis-era sellers. This bill allows the AG to sign for the EOB, facilitating the settlement of certain Energy Crisis claims. 2)Prior Legislation. SB 1533 (Padilla, Chapter 226, Statutes of 2012) AB 1457 (Huber, 2012, died in Assembly Appropriations) AB 1390 (Committee on Utilities & Commerce, Chapter 179, Statutes of 2011) 3)Double referred . This bill is double referred to the Assembly Committee on Judiciary. REGISTERED SUPPORT / OPPOSITION: Support None on file Opposition AB 1524 Page 4 None on file Analysis Prepared by:Allegra Roth / U. & C. / (916) 319-2083