BILL ANALYSIS
AB 40
Page 1
Date of Hearing: April 29, 2009
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Kevin De Leon, Chair
AB 40 (Fuentes) - As Introduced: December 1, 2008
Policy Committee:
UtilitiesVote:15-0 (Consent)
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill:
1)Requires the Public Utilities Commission (PUC) to review
existing guidelines and determine whether it needs to open a
proceeding to adjust the time period allowed for the costs
associated with property held by electrical utilities within a
designated transmission corridor zone to be carried in the
utilities' rate bases.
2)Requires the PUC, if it amends existing guidelines or adds a
new guideline pursuant to (1), to ensure that any gains or
losses from the sale of property acquired by an electrical
corporation relevant to the guidelines are allocated between
customers and shareholders proportionate to the risks
involved.
FISCAL EFFECT
If the commission determines a proceeding is necessary, it will
incur one-time special fund costs of about $250,000 for two
positions for one year to conduct the proceeding. [Public
Utilities Reimbursement Account]
On an ongoing basis, there will be additional staff work to
review proposed utility acquisition of transmission corridors,
because allowing a longer holding period will require balancing
AB 40
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benefits and risk. Conversely, fostering more proactive
acquisition of such land could help expedite future transmission
permitting proceedings.
COMMENTS
1)Purpose . A transmission corridor zone (TCZ) is defined as the
geographic area, not more than 1,500 feet wide, necessary to
accommodate the construction and operation of one or more
high-voltage electric transmission lines. SB 1059
(Escutia)/Chapter 638 of 2006, authorized the California
Energy Commission (CEC), to designate TCZs for future
construction of high-voltage (at least 200 kilovolt) lines
consistent with the states' needs and objectives.
In comments filed with the CEC as part of its transmission
corridor zone workshop, Southern California Edison (SCE)
indicated that one of the most important issues that could
impede the corridor designation process is the restriction on
the maximum length of time (currently five years) that a
utility can hold lands purchased for future use in its rate
base. Without changes to these restrictions, SCE stated that
utilities are unable to procure and set aside land for
long-term planning needs. This bill requires the PUC to
determine whether a formal commission proceeding should be
commenced to examine whether a longer allowable holding period
for such property is warranted.
2)Prior Legislation . This bill is identical to AB 1755
(Fuentes) of last year, which was one of numerous bills
summarily vetoed by the governor without a stated objection.
AB 1755 passed this committee 17-0 and passed the Assembly
77-0.
Analysis Prepared by : Chuck Nicol / APPR. / (916) 319-2081