BILL ANALYSIS �
SB 939
Page 1
Date of Hearing: August 17, 2011
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
SB 939 (Wright) - As Amended: August 15, 2011
Policy Committee:
UtilitiesVote:12-0 (Consent)
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill repeals the requirement that the surcharge on
ratepayers, collected by investor-owned gas utilities regulated
by the Public Utilities Commission (PUC) for natural gas public
purpose programs, be remitted to the Board of Equalization
(BOE), thereby removing the availability of these monies for
redirection by the Legislature to the General Fund.
FISCAL EFFECT
For 2010, surcharge revenues from the investor-owned utilities
(IOUs)-PG&E, San Diego Gas and Electric (SDG&E), and Southern
California Gas Company (SoCalGas)-totaled $553 million, while
surcharge revenues from customers of non-PUC regulated
interstate pipeline companies totaled only $660,000. Repealing
the requirement for IOUs to remit the surcharge to the BOE
should thus save the vast majority of the BOE's administrative
charges for this activity, which is paid out of surcharge
revenues and budgeted at $667,000 for 2011-12. Other savings to
the gas surcharge account, which would have to be offset by
contributions from other state funds, are the annual
contribution toward general state administrative expenses ("pro
rata"), currently $4 million, and for development of the state's
new accounting system (FI$CAL), currently $2.3 million.
Most significantly, however, the bill removes the Legislature
discretion over these funds, as was exercised as part of this
year's budget (see below).
COMMENTS
SB 939
Page 2
Background and Purpose . Proceeds from the natural gas surcharge
are used to fund assistance to low-income ratepayers, energy
efficiency and conservation activities, and public interest
research and development. Prior to enactment of AB 1002
(Wright)/Chapter 932 of 2000, surcharge revenues were collected
and held by the gas utilities. AB 1002, in part to ensure that
customers of non-PUC regulated gas pipeline companies paid their
fair share toward the gas public purpose programs, required all
gas surcharge monies from all companies to be remitted to the
BOE. The BOE would then return the funds to the gas companies to
carry out the public purpose programs. SB 939 returns the
handling of gas surcharge funds by the IOUs to the pre-AB 1002
process. The non-PUC regulated gas companies would still remit
surcharge revenues to the BOE.
As part of the Legislature's efforts to close the state's
massive General Fund budget gap, the 2010-11 Budget Act includes
a transfer of $155 million from natural gas surcharge funds to
the General Fund. This bill is intended to stabilize and
maintain the integrity of the public purpose programs by
ensuring that these funds would no longer be available for
another purpose.
The IOUs strongly support the bill, arguing that the recent
diversion of surcharge monies, and the continuing potential for
future diversions, negatively impact programs that create green
jobs, help the state meet its AB 32 goals, and provide benefits
to gas customers who pay the surcharge.
As a result of the budget action, SDG&E is estimating a $15
million shortfall in its energy efficiency program.
Consequently, they are no longer providing gas rebates or
incentives to commercial/industrial customers and have
discontinued incentives for water heaters and natural gas
furnaces for residential customers.
The California Energy Efficiency Industry Council, an
association of more than 50 non-utility companies providing
energy efficiency products and services is also supporting, as
is the California Chamber of Commerce.
Analysis Prepared by : Chuck Nicol / APPR. / (916) 319-2081
SB 939
Page 3