BILL ANALYSIS �
AB 976
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 976 (Hall)
As Amended August 6, 2012
Majority vote
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|ASSEMBLY: |62-9 |(May 31, 2011) |SENATE: |27-9 |(August 22, |
| | | | | |2012) |
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Original Committee Reference: U. & C.
SUMMARY : Prohibits consultants advising Community Choice
Aggregators (CCA) from bidding on CCA contracts. Specifically,
this bill prohibits a CCA from purchasing electricity or energy
services from an entity that provided analysis, advice,
consulting, or other services to CCA prior to CCA notifying that
CCA service will commence.
The Senate amendments make technical changes, moving the
provisions in this bill from the Government Code to a Section in
the Public Utilities Code that addresses CCAs.
AS PASSED BY THE ASSEMBLY , this bill was substantially similar
to the version passed by the Senate.
FISCAL EFFECT : According to the Senate Appropriations
Committee, minor costs to local entities for extra review of
contract bids.
COMMENTS : According to the author, firms hired by local
governments to make recommendations to local governments on
forming a CCA often seek contracts to implement their project
recommendations. These firms can provide local government
information on the potential costs and benefits of forming a
CCA. The author points out that there is a conflict of interest
that generally would benefit the consulting firm and that
current law does not adequately protect the interests of the
taxpayers or ratepayers affected.
State law currently prohibits an entity who has been awarded a
consulting services contract, from a state agency, from
submitting a bid for, receiving an award for a contract for the
provision of services, procurement of goods or supplies, or any
other related action which is required, suggested, or otherwise
AB 976
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deemed appropriate in the end product of the consulting services
contract.
According to court decisions and opinions by the Attorney
General, independent contractors and consultants who exercise
judgment on behalf of public entities are also covered by
Section 1090 of the Government Code (conflict-of-interest
statute).
Local governments exploring the feasibility of forming a CCA
often seek the advice of third party energy consultants. But
due to the extremely technical nature of energy policy, many
local jurisdictions are ill-equipped to question the assumptions
and findings of these private consultants. These firms could
mislead local governments with rosy scenarios of low cost
electricity and provide recommendations that serve to advantage
themselves for future contracts. They could recommend that
local governments embark on overly ambitious proposals that
result in more work for the consultant in the future and
possibly higher electricity costs for CCA participants.
This bill would prohibit an individual or business who has been
awarded a contract to advise a local government on establishing
a CCA from bidding on any subsequent contract that was
influenced by their previously awarded contract.
Analysis Prepared by : Susan Kateley / U. & C. / (916)
319-2083
FN: 0004456