BILL ANALYSIS Ó SENATE COMMITTEE ON ENERGY, UTILITIES AND COMMUNICATIONS Senator Ben Hueso, Chair 2015 - 2016 Regular Bill No: SB 631 Hearing Date: 4/7/2015 ----------------------------------------------------------------- |Author: |Hueso | |-----------+-----------------------------------------------------| |Version: |2/27/2015 As Introduced | ----------------------------------------------------------------- ------------------------------------------------------------------ |Urgency: |No |Fiscal: |Yes | ------------------------------------------------------------------ ----------------------------------------------------------------- |Consultant:|Nidia Bautista | | | | ----------------------------------------------------------------- SUBJECT: Public Utilities Commission: fees. DIGEST: This bill would authorize the California Public Utilities Commission (CPUC) to update for inflation the fee charged on an application for utility service from $75 established nearly half a century ago, with a cap of $500. ANALYSIS: 1. Existing law requires a utility, including telephone corporations, to obtain a certificate of public convenience and necessity (CPCN) from the CPUC prior to construction or extension of a line or service. (Public Utilities Code §1001) 2. Establishes a fee of $75 for the application of a CPCN. (Public Utilities Code §1904) This bill would repeal the $75 currently charged by the CPUC for a CPCN application and instead authorize the CPUC to assess a fee that better captures the current reasonable costs of processing an application. The bill would cap the amount the CPUC can assess to no more than $500 and allow the fee to continue to grow with the rate of the consumer price index. Background A CPCN is a permit issued by the CPUC to a utility that wants to provide service or construct or extend facilities or telecommunications services. For example, a CPCN is required for a natural gas utility who plans to extend a transmission line and SB 631 (Hueso) Page 2 of ? a telephone corporation who wants to provide service. The fee on CPCN applications was established in statute in 1969. Applications for CPCNs are classified as proceedings by the CPUC, and as such involve the participation of an administrative law judge, CPUC staff, and commissioners. The application process is a lengthy and in-depth public process involving review of California Environmental Quality Act (CEQA) documents and need/cost analysis, with required public workshops, hearing, etc. Prior/Related Legislation SB 711 (Padilla, 2014) proposed to authorize the CPUC to increase the CPCN application fee to an amount that would reasonably cover the costs of processing the fee with a cap of $500. The bill also proposed to shift the revenues from the application fee from the General Fund to the CPUC. The bill died in the Assembly Committee on Utilities and Commerce. AB 1409 (Bradford, 2013) proposed several changes to the Public Utilities Code including increasing the CPCN application fee. The bill was vetoed by the Governor due to last minute amendments that were unrelated to the CPCN application fee. FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No SUPPORT: None on file. OPPOSITION: None on file. ARGUMENTS IN SUPPORT: The costs of processing a CPCN application are not well reflected in the $75 fee established in law nearly half a century ago. However, the CPUC does not have authority to revise the application fee without a change in the statute. In 2013, the CPUC adopted Decision (D.) 13-05-035 which acknowledged the need to increase the CPCN fee with legislative approval. In that decision, the CPUC stated that had the CPCN SB 631 (Hueso) Page 3 of ? "application fee been adjusted for inflation, the fee in 2013 would be $432." According to the CPUC, the estimation of staff time involved in processing a CPCN application can range from $500 to several thousand dollars. The $75 CPCN application fee is significantly less than related application processes that are less involved and require less staff time, such as $250 for non-dominant interexchange carriers (NDIECs) or long-distance telephone corporations. ARGUMENTS IN OPPOSITION: None on file. -- END --