BILL ANALYSIS                                                                                                                                                                                                    Ó

          |SENATE RULES COMMITTEE            |                        SB 631|
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                                 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 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,  

           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. 


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          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. 


          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.  


          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  


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                                                                    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)


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          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  

          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

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