BILL ANALYSIS Ó
AB 2874
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Date of Hearing: April 12, 2016
ASSEMBLY COMMITTEE ON WATER, PARKS, AND WILDLIFE
Marc Levine, Chair
AB 2874
(Beth Gaines) - As Amended March 15, 2016
SUBJECT: Groundwater sustainability agencies: fees
SUMMARY: Requires a groundwater sustainability agency (GSA),
before imposing or increasing a fee relating to a groundwater
basin that includes a water corporation regulated by the Public
Utilities Commission (CPUC) to notify the CPUC.
EXISTING LAW:
1)The Sustainable Groundwater Management Act (SGMA), requires
all groundwater basins designated as high or medium priority
basins subject to critical overdraft to be managed under a
groundwater sustainability plan by January 31, 2020, and all
other high or medium priority groundwater basins to be managed
under such a plan by January 31, 2022.
2)Authorizes any local agency or combination of agencies
overlying a groundwater basin to become a GSA for that region.
A combination of local agencies may form a GSA by using a
joint powers agreement, or a memorandum of agreement or other
legal agreement. Authorizes a water corporation regulated by
the CPUC or a mutual water company to participate in a GSA
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through a memorandum of agreement or other legal agreement.
Provides that this authority does not confer any additional
powers to a nongovernmental entity.
3)Authorizes a GSA to impose fees, including but not limited to,
permit fees and fees on groundwater extraction, to fund the
costs of a groundwater sustainability program.
4)Authorizes the CPUC to regulate privately owned electric,
natural gas, telephone, water, and sewer utilities, and to
process utility rate change requests.
FISCAL EFFECT: Unknown
COMMENTS: This bill requires GSAs under SGMA to notify the CPUC
before imposing a fee, as authorized under SGMA.
1)Author's Statement: The author has introduced this bill to
protect customers of water utilities regulated by the CPUC
from the effects of a potential lack of coordination between
GSAs and the CPUC. This will ensure a process is in place to
notify the CPUC of any GSA decisions that could affect
customers' water rates. Without coordination between GSAs and
the PUC, customers of regulated water utilities could be
harmed through changes in fees and ground water rights.
2)Background: There are over 108 investor-owned water utilities
under the CPUC's jurisdiction providing water service to about
6 million Californians, or 16 percent of California residents.
The CPUC investigates water and sewer system service quality
issues, and analyzes and processes utility rate change
requests. Regulated private water utilities are not allowed to
change rates or the terms of service to their customers
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without the CPUC's approval.
While SGMA allows an investor-owned utility to be a member of a
GSA, not all communities are including investor-owned
utilities in the GSAs that they are forming. The sponsors of
this bill are concerned that in those instances in which an
investor owned utility is not a member of the GSA, and the GSA
imposes a fee, the utility may not be authorized by the CPUC
to impose a surcharge on its customers in order to collect the
fee. The notice requirement would alert the CPUC regarding
the proposed fee.
The California Water Service Company cites an example of a 2014
case where they filed an application with the CPUC seeking
authority to apply surcharges on customers, phased in over 8
years, to mitigate groundwater overdraft in the Upper Kings
River Basin. The purpose of the surcharges was to fund
groundwater recharge projects under a cooperative agreement
between the City of Selma and the Consolidated Irrigation
District (District) which supplies irrigation water to farmers
in the area. A dispute between the District and the City over
urban development led to a cooperative agreement through which
both groundwater extraction and new urban development would be
allowed to continue, and water customers in the City would be
assessed surcharges to pay for groundwater recharge projects.
The Office of Ratepayer Advocates intervened in the case and a
settlement agreement was ultimately reached.
3)Prior and Related Legislation: SB 1168 (Pavley), Chapter 346,
and AB 1739 (Dickinson), Chapter 437, Statutes of 2014,
together enacted SGMA, which requires that each high- and
medium-priority groundwater basin be managed pursuant to a
groundwater sustainability plan by January 31, 2020, if in
critical overdraft, or by January 31, 2022, with the goal of
achieving sustainability within 20 years.
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SB 13 (Pavley), Chapter 255, Statutes of 2015, among other
things, authorized a mutual water company to participate in a
GSA and provided that a water corporation or a mutual water
company may participate in a GSA through a memorandum of
agreement or other legal agreement.
4)Support Arguments: None received.
5)Opposition Arguments: None received.
REGISTERED SUPPORT / OPPOSITION:
Support
California Water Association
Opposition
None on file.
Analysis Prepared by:Diane Colborn / W., P., & W. / (916)
319-2096
AB 2874
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