BILL ANALYSIS Ó
AB 1524
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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
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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
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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
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None on file
Analysis Prepared by:Allegra Roth / U. & C. / (916) 319-2083