BILL ANALYSIS                                                                                                                                                                                                    �



                                                                  SB 939
                                                                  Page  1

          Date of Hearing:   July 5, 2011

                    ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
                               Steven Bradford, Chair
                     SB 939 (Wright) - As Amended:  June 28, 2011

           SENATE VOTE  :   (vote not relevant)
           
          SUBJECT  :   Natural Gas Surcharge

           SUMMARY  :   This bill would eliminate an administrative process 
          which provides that funds collected by gas corporations for 
          natural gas public purpose programs must first be deposited into 
          an account at the Board of Equalization (BOE) before being 
          transferred to a gas corporation to be used for public purpose 
          programs.

           EXISTING LAW  :

          1)Establishes a "natural gas surcharge" on customers served by 
            regulated gas pipelines regulated by the Federal Energy 
            Regulatory Commission (FERC).

          2)Requires public utility gas corporations to collect a natural 
            gas surcharge from ratepayers/consumers and remit the money to 
            the BOE. 

          3)Requires persons consuming natural gas delivered by an 
            interstate pipeline to pay the surcharge directly to the BOE.

          4)Requires expenditures by gas utility companies of the natural 
            gas surcharge be used to fund low-income assistance, energy 
            efficiency and conservation activities, and public interest 
            Research Development & Demonstration (RD&D).

          5)The California Public Utilities Commission (PUC) provides 
            oversight regarding the use of these funds. 

           FISCAL EFFECT  :   Unknown.

           COMMENTS  :   This bill specifies that a public utility gas 
          corporation would continue to collect the surcharge to fund 
          specified public purpose programs, but they would not remit the 
          moneys collected to the BOE.  









                                                                  SB 939
                                                                  Page  2

          This change avoids an unnecessary step, whereby gas utility 
          companies remit the surcharge money they collect to the BOE, 
          which then sly deposits the money into an account, from which 
          the gas utility companies draw upon to operate programs 
          authorized by statute and approved by the PUC.

          During budget deliberations earlier this year, legislative 
          budget committees transferred several million dollars of 
          ratepayer funds in the Gas Consumption Surcharge Fund to support 
          General Fund programs.   This bill does not attempt to reverse 
          this budgetary action, but it does help to stabilize the public 
          purpose program funding by eliminating the requirement that 
          investor owned utilities (IOUs) remit funds collected from their 
          customers to the BOE.

          The practical need for this bill is to protect these public 
          purpose funds from being diverted to pay for support of the 
          General Fund.  These funds are ratepayer funds - they are not 
          taxes.

           REGISTERED SUPPORT / OPPOSITION  :

           Support 
           
          California Chamber of Commerce (CalChamber)
          Pacific Gas and Electric Company (PG&E)
          San Diego Gas & Electric Company (SDG&E)
          Southern California Gas Company (SoCalGas)
           
            Opposition 
           
          None on file.

           Analysis Prepared by  :    Susan Kateley / U. & C. / (916) 
          319-2083