BILL ANALYSIS Ó
AB 2120
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Date of Hearing: May 18, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
AB
2120 (Weber) - As Amended April 26, 2016
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Urgency: No State Mandated Local Program: NoReimbursable: No
SUMMARY:
This bill expands the intervenor compensation program at the
California Public Utilities Commission (PUC) to include county
offices of education, and consortiums of K-12 public school
districts or agencies who participate or intervene in a
proceeding related to gas or electricity rates.
FISCAL EFFECT:
1)According to the PUC, if 130 or less county offices of
education or consortiums of K-12 public schools filed a claim
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to participate in one General Rate Case (GRC) claims per year,
the PUC estimates one additional staff person or
administrative law judge would be required at about $187,000
to $250,000 per year to ensure compliance with the 75-day
deadline.
This unit in the PUC is currently staffed with a limited term
position that expires in October 2016. With or without this
bill, additional resources will be required to meet the
statutory timelines and requirements.
2)By expanding the number of entities eligible to receive
intervenor compensation program awards, this bill increases
the potential for electric customer rate increases as electric
utilities are allowed to recover the full amount of the award
in customer rates within one year of the award. Given that
the state itself is a ratepayer, responsible for approximately
1-2% of the state's electricity use, expanding the intervenor
compensation program could result in costs to the state in the
tens of thousands of dollars from the General Fund and special
funds.
COMMENTS:
1)Purpose. According to the author, last year, school districts
in San Diego County experienced an unprecedented and
unanticipated surge in electricity costs averaging 39%, with
33% of that increased attributable to utility rate increases
alone.
It is estimated that this increase cost San Diego County
School Districts over $25 million in one year. This resulted
in an estimated 15% to 20% of the 2014-15 increase in Local
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Control Funding Formula (LCFF) Base Grants fund being diverted
away from their intended purpose.
A coalition of 40 San Diego County School Districts and the
county Office of Education formed a coalition dedicated to
seeking protection from further drastic escalation of
electricity costs in order to preserve LCFF funds for their
intended purpose. Specifically, one of their recommendations
was to allow schools to participate in the PUC intervenor
compensation proceedings. This bill implements that
recommendation.
2)Background. The intervenor compensation program (program) at
the PUC is a program intended to encourage and enable wide
customer participation in PUC proceedings by removing cost as
a barrier to participation. The program started with utility
rate cases because of the complex and lengthy proceedings that
involve the PUC acting much like a court, relying on judges,
attorneys, and expert witnesses before making final decisions.
The cases involve public hearings with written and oral
testimony, cross examination, opening and reply briefs, draft
decisions with comments from parties, and ultimately a final
decision.
Under the program, customers who couldn't otherwise afford to
participate without "significant financial hardship" and who
have made a "substantial contribution" to the case, as
determined by the PUC, are eligible to have their reasonable
expenses covered, including attorney fees and expert witness
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fees. Awards are paid for by the public utility that is the
subject of the proceeding. For utilities subject to
traditional cost-of-service ratemaking (e.g. the electric
utilities), the expense of the program is recoverable from
ratepayers. Where the utility is subject to price-cap
regulation, or where prices aren't regulated (e.g.
telecommunications utilities) the utility must manage the cost
of the program. In 2015, intervenors filed 98 claims and the
PUC issued 158 decisions.
Local governments are explicitly exempt from participating in
the program premised on the fact that local government
agencies are funded with public dollars and have the ability
to increase taxes or fees to fund their activities.
3)Prior Legislation. SB 1165 (Wright) of 2012: would have
allowed intervenor compensation to be awarded for
participation or intervention in proceedings at the CPUC for a
county office of education, on behalf of any of the local
educational agencies in whole or part within the county or on
behalf of itself, or for a community college district. This
bill was held on suspense in the Senate Appropriations
Committee.
Analysis Prepared by:Jennifer Galehouse / APPR. / (916)
319-2081
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