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 --