BILL ANALYSIS                                                                                                                                                                                                    



                                                                    AB 2903


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          Date of Hearing:  April 13, 2016


                    ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE


                                  Mike Gatto, Chair


          AB 2903  
          (Committee on Utilities and Commerce) - As Introduced March 3,  
          2016


          SUBJECT:  Wharfingers:  warehouseman:  California Consumer Power  
          and Conservation Financing Authority:  energy crisis litigation


          SUMMARY:  Deletes obsolete language in the Public Utilities Code  
          related to Wharfinger and warehouseman, and the California  
          Consumer Power and Conservation Financing Authority (CPA).     
          Specifically, this bill:  


          1)Deletes the authority for a warehouseman to condemn property  
            necessary for the construction and maintenance of facilities  
            for storing property. 


          2)Deletes the authority for a wharfinger to condemn property  
            necessary for the construction and maintenance of facilities  
            for the receipt or discharge of freight or passengers. 


          3)Require the Attorney General (AG) to represent the Department  
            of Finance and to succeed all rights, claims, powers, and  
            entitlements of the CPA in any litigation or settlement  
            relating to the 2000-02 energy crisis. 









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          4)Repeals the California Consumer Power and Conservation  
            Financing Authority Act.


          EXISTING LAW:  


          1)Applies rights and obligations with respect to eminent domain  
            only to a corporation or a person that is a public utility.  
            (Public Utilities Code 610 through 626).


          2)Authorizes a wharfinger to condemn any property necessary for  
            the construction and maintenance of facilities for the receipt  
            or discharge of freight or passengers.  (Public Utilities Code  
            Section 619)


          3)Authorizes a warehouseman to condemn any property necessary  
            for the construction and maintenance of its facilities for  
            storing property. (Public Utilities Code Section 623) 


          4)Requires the AG to represent the Department of Finance to  
            succeed to, and may exercise, all rights, claims, powers, and  
            entitlements of the Electricity Oversight Board in any  
            litigation or settlement related to the 2000-02 energy crisis,  
            as specified. (Public Utilities Code Section 343)


          5)Establishes the CPA to provide the state with reliable,  
            affordable electrical power, to ensure sufficient power  
            reserves, to assure stability and rationality in California's  
            electricity market, to encourage energy efficiency and  
            conservation as well as the use of renewable energy resources,  
            and to protect the public health, welfare, and safety.   
            (Public Utilities Code Section 3300 et seq.)









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          6)Sunsets the CPA's authority to finance or approve any new  
            program, enterprise, or project on January 1, 2007.


          FISCAL EFFECT:  Unknown.


          


          COMMENTS:  


          1)Background:  Article XII of the California Constitution  
            establishes the California Public Utilities Commission (CPUC)  
            and grants it the authority to regulate public utilities.  In  
            1980, the Legislature removed warehouseman as a public  
            utility. However, in the process, the Legislature did not  
            delete the stated authority granting a warehouseman that is a  
            public utility to condemn property necessary for the  
            construction and maintenance of facilities for storing  
            property. Furthermore, in 1987, the Legislature also removed  
            wharfingers as a public utility, but also did not delete the  
            stated authority granted to a wharfinger that is a public  
            utility to condemn property necessary for the construction and  
            maintenance of facilities for the receipt or discharge of  
            freight or passengers. This discrepancy left the authority to  
            condemn property by warehouseman and wharfingers that are  
            public utilities in the Public Utilities Code, but it is no  
            longer applicable because warehouseman and wharfingers were no  
            longer classified as public utilities.  



            This bill would delete the obsolete authority of a wharfinger  
            or warehouseman to condemn property from statute.










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          2)California Consumer Power and Conservation Financing  
            Authority:  The CPA was established during the height of the  
            2000-02 energy crisis in 2001 under SB 6 X1 (Burton), Chapter  
            10, Statutes of 2001-02 First Extraordinary Session. The CPA  
            was created to ensure that the state had reliable, affordable  
            electrical power, establish sufficient power reserves, assure  
            stability and rationality in the state's electricity market,  
            encourage energy efficiency and conservation as well as the  
            use of renewable energy resources, and protect the public  
            health, welfare, and safety.  The CPA was authorized to issue  
            up to $5 billion in revenue bonds to finance such activities. 



            Since the establishment of the CPA it has been unsuccessful in  
            financing new power plants but has had some success in  
            implementing projects that encourage energy conservation, and  
            has also contributed to the states effort to ensure adequate,  
            reliable, and reasonably price electricity and natural gas for  
            California's consumers.  Despite this, the CPA duties  
            diminished as California recovered from the 2000-02 energy  
            crisis and other state energy agencies and private entities  
            were already performing similar activities. The CPA's  
            authority to finance or approve any new program, enterprise,  
            or project sunset on January 1, 2007.





            This bill would repeal the CPA and its authorities from  
            statute. 












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          3)Energy Crisis Litigation:  Under current law, the AG is  
            required to represent the Department of Finance to succeed to,  
            and may exercise, all rights, claims, powers, and entitlements  
            of the Electricity Oversight Board in any litigation or  
            settlement related to the 2000-02 energy crisis.  The United  
            States Supreme Court recently ruled that energy companies can  
            be sued under state antitrust laws for illegally manipulating  
            natural gas prices during the 2000-02 energy crisis. As a  
            result, there are likely additional claims related to the  
            energy crisis ahead.  



            This bill requires the AG to represent the Department of  
            Finance and to succeed all rights, claims, powers, and  
            entitlements of the CPA in any litigation or settlement  
            relating to the 2000-02 energy crisis.





          4)Prior Legislation:


             AB 1524 (Utilities and Commerce Committee), Chapter 382,  
             Statutes of 2015:  Extends the sunset date that requires the  
             AG to represent the Electricity Oversight Board in any  
             litigation or settlement related to the 2000-02 energy  
             crisis, from January 1, 2016, to January 2, 2018.


          REGISTERED SUPPORT / OPPOSITION:




          Support








                                                                    AB 2903


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          None on file.




          Opposition


          None on file.




          Analysis Prepared by:Edmond Cheung / U. & C. / (916) 319-2083