BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | SB 631| |Office of Senate Floor Analyses | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- UNFINISHED BUSINESS Bill No: SB 631 Author: Hueso (D) Amended: 6/17/15 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 SENATE FLOOR: 29-4, 4/27/15 AYES: Allen, Anderson, Beall, Berryhill, Block, Cannella, De León, Fuller, Gaines, Galgiani, Hall, Hancock, Hernandez, Hill, Hueso, Huff, Jackson, Lara, Leno, Leyva, Liu, McGuire, Mendoza, Mitchell, Monning, Pan, Roth, Wieckowski, Wolk NOES: Morrell, Nguyen, Nielsen, Stone NO VOTE RECORDED: Bates, Hertzberg, Moorlach, Pavley, Runner, Vidak ASSEMBLY FLOOR: 58-16, 7/16/15 - See last page for vote SUBJECT: Public Utilities Commission: fees SOURCE: Author DIGEST: This bill updates the fee for filing a certificate of public convenience and necessity (CPCN) with the California Public Utilities Commission (CPUC) from $75 to $500. SB 631 Page 2 Assembly Amendments specify the fee for a CPCN is $500 and allow the CPUC to update the fee based on the Consumer Price Index. The amendments also eliminate a section of the statute that required fees collected from a CPCN application to be paid to the General Fund. 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 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 the fee at $500 to better capture the current reasonable costs of processing an application. 2)Authorizes the CPUC to adjust the fee based on the Consumer Price Index. 3)Repeals a section of the statute which requires collected CPCN application fees to be paid to the credit of the General Fund. 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 SB 631 Page 3 and a telephone corporation who wants to provide service. The $75 fee on CPCN applications was established in statute in 1969 and has never been adjusted. 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, need and cost analysis, public workshops, and public hearing. 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. Related/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 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.:YesLocal: No SUPPORT: (Verified7/20/15) California Public Utilities Commission OPPOSITION: (Verified 7/20/15) SB 631 Page 4 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. 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. ASSEMBLY FLOOR: 58-16, 7/16/15 AYES: Alejo, Baker, Bloom, Bonilla, Bonta, Brown, Burke, Calderon, Campos, Chau, Chiu, Chu, Cooley, Dababneh, Daly, Dodd, Eggman, Frazier, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Hadley, Roger Hernández, Holden, Jones-Sawyer, Kim, Levine, Linder, Lopez, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Mullin, Nazarian, Obernolte, O'Donnell, Olsen, Perea, Quirk, Rendon, Ridley-Thomas, Rodriguez, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Waldron, Weber, Williams, Wood, Atkins NOES: Achadjian, Travis Allen, Bigelow, Brough, Chang, Chávez, Gallagher, Gray, Grove, Harper, Irwin, Jones, Lackey, Melendez, Salas, Wilk NO VOTE RECORDED: Cooper, Dahle, Beth Gaines, Gordon, Patterson, Wagner Prepared by:Nidia Bautista / E., U., & C. / (916) 651-4107 8/17/15 10:20:49 **** END **** SB 631 Page 5