BILL ANALYSIS Ó SB 631 Page 1 Date of Hearing: June 15, 2015 ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE Anthony Rendon, Chair SB 631 (Hueso) - As Introduced February 27, 2015 SENATE VOTE: 29-4 SUBJECT: Public Utilities Commission: fees. SUMMARY: This bill specifies that the fee for filing a certificate of public convenience and necessity (CPCN) with the Public Utilities Commission (CPUC) is an amount not to exceed $500 and allows the CPUC to adjust this fee for inflation. Specifically, this bill: a)Caps the amount the CPUC can assess for a CPCN to no more than $500 and allows the fee to continue to be adjusted based on the Consumer Price Index. b)Repeals a section of the statute which requires collected CPCN application fees to be paid to the credit of the General Fund. EXISTING LAW: SB 631 Page 2 1)Requires a utility, including telephone corporations, to obtain a CPCN from the CPUC prior to construction or extension of a line or service. (Public Utilities Code Section 1001) 2)Establishes a fee of $75 for the application of a CPCN. (Public Utilities Code Section 1904) FISCAL EFFECT: Unknown. COMMENTS: 1)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 that plans to extend a transmission line. A fee on CPCN applications was established in statute in 1969. The CPCN application process involves the participation of an administrative law judge, CPUC staff, and commissioners, and is a lengthy and in-depth public process. It involves review of California Environmental Quality Act documents, cost analysis, need analysis, and extensive workshops and public hearings. 2)Purpose: According to the supporters of the bill, 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 application fee SB 631 Page 3 been adjusted for inflation, the 2013 fee would have been $432. 3)Prior 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 was held 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. REGISTERED SUPPORT / OPPOSITION: Support California Public Utilities Commission Opposition SB 631 Page 4 None on file. Analysis Prepared by:Allegra Roth / U. & C. / (916) 319-2083