BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 631|
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THIRD READING
Bill No: SB 631
Author: Hueso (D)
Introduced:2/27/15
Vote: 21
SENATE ENERGY, U. & C. COMMITTEE: 10-0, 4/7/15
AYES: Hueso, Fuller, Cannella, Hertzberg, Hill, Lara, Leyva,
McGuire, Pavley, Wolk
NO VOTE RECORDED: Morrell
SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8
SUBJECT: Public Utilities Commission: fees
SOURCE: Author
DIGEST: This bill authorizes 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:
Existing law:
1)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
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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:
1)Repeals the $75 currently charged by the CPUC for a CPCN
application and instead authorizes the CPUC to assess a fee
that better captures the current reasonable costs of
processing an application.
2)Caps the amount the CPUC can assess to no more than $500 and
allows 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 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.
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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.:YesLocal: No
SUPPORT: (Verified4/22/15)
None received
OPPOSITION: (Verified4/22/15)
None received
ARGUMENTS IN SUPPORT: According to the author, 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 "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
or long-distance telephone corporations.
Prepared by:Nidia Bautista / E., U., & C. / (916) 651-4107
4/22/15 16:20:11
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