BILL ANALYSIS �
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|SENATE RULES COMMITTEE | AB 1693|
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THIRD READING
Bill No: AB 1693
Author: Perea (D)
Amended: 8/19/14 in Senate
Vote: 21
SENATE ENERGY, UTILITIES & COMMUNICATIONS COMMITTEE : 10-0,
6/17/14
AYES: Padilla, Fuller, Block, Cannella, Corbett, De Le�n,
DeSaulnier, Hill, Pavley, Wolk
NO VOTE RECORDED: Knight
SENATE APPROPRIATIONS COMMITTEE : 5-0, 8/14/14
AYES: De Le�n, Hill, Lara, Padilla, Steinberg
NO VOTE RECORDED: Walters, Gaines
ASSEMBLY FLOOR : 75-1, 4/21/14 - See last page for vote
SUBJECT : Small independent telephone corporations: rates
SOURCE : Californias Independent Telecommunications Companies
DIGEST : This bill requires the Public Utilities Commission
(PUC) to complete a general rate case (GRC) of a small
independent telephone corporation within 390 days. If the
deadline is not met, this bill will establish procedures for
interim rates.
ANALYSIS : Existing federal law and decisions of the Federal
Communications Commission provide federal universal service
funding to providers serving rural, high-cost areas to help pay
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for facilities that provide customers both voice and broadband
service, and condition receipt of those federal funds on meeting
broadband deployment milestones and minimum network speeds.
Existing state law:
1.Requires the PUC to regulate electric, gas, water, and
telephone corporations and to establish just and reasonable
rates for service, with corporations proposing rates either
through a GRC application or an advice letter.
2.Requires the PUC to administer universal service programs to
ensure statewide affordable basic telephone service and access
to broadband and advanced communications services, including
the California High Cost Fund A (A Fund) program to support
small independent telephone companies' provision of basic
service in rural, high-cost areas of the state.
3.Requires the PUC, in administering the A Fund program, to
include in small telephone company rate calculations the cost
of all reasonable investments necessary to provide voice
service and deployment of broadband-capable facilities.
4.Requires the PUC to resolve all adjudication cases within 12
months of initiation unless the PUC makes findings why that
deadline cannot be met and issues an order extending that
deadline.
5.Requires the PUC to resolve each GRC and rulemaking proceeding
within 18 months but allows extension in 60-day increments if
the PUC determines in writing that it cannot meet the deadline
and issues an order extending the deadline.
6.Requires the PUC to issue a final decision on a GRC
application of a large water corporation within one year and
requires interim rates to take effect if the PUC misses the
deadline.
7.Requires the PUC to submit an annual report to the Legislature
on the number of cases where resolution exceeded prescribed
time periods.
This bill:
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1.Requires the PUC to issue its final decision on a GRC of a
small independent telephone corporation no later than 390 days
after the rate case is initiated.
2.Provides that if final action is not taken within 390 days,
the small telephone corporation may adopt the rate design in
its application on an interim basis, subject to an accounting
true-up at the conclusion of the rate case.
3.Provides that if final action is not taken within 540 days,
the interim rate design will become final until the PUC
concludes the GRC without any true-up accounting.
4.Allows the deadlines imposed by the provisions to be waived by
mutual consent of the PUC's executive director and a small
independent telephone corporation.
5.Establishes specific deadlines for a GRC that is pending on
January 1, 2015.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee, minor and
absorbable costs to the Public Utilities Reimbursement Account
(special) to the PUC to decrease the time to complete GRCs for
small independent telephone companies.
SUPPORT : (Verified 8/13/14)
California's Independent Telecommunications Companies (source)
California Communications Association
Cities of Kerman and Mendota
Fresno Chamber of Commerce
OPPOSITION : (Verified 8/13/14)
California Public Utilities Commission
Office of Ratepayer Advocates
The Utility Reform Network
ARGUMENTS IN SUPPORT : According to the author's office,
although a core function of the PUC is ratesetting, it recently
allowed two years to elapse before finally issuing a decision to
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stay the rate case of Kerman Telephone, a small telephone
company in my district. Small independent telephone companies
cannot change any rate without PUC review and approval. And the
longer the PUC takes to complete a ratemaking case, the more
costly it becomes for the telephone company and its customers.
As such, the efficient operation and economic health of
rate-regulated utilities, and ultimately their ability to make
investments and provide the services demanded by customers,
depends on the PUC's timely resolution of rate cases. This bill
will motivate the PUC to process small telephone company rate
cases in a timely manner, as well as prevent the type of abuse
of due process that has happened to Kerman."
ARGUMENTS IN OPPOSITION : The Office of Ratepayer Advocates
(ORA) writes, "ORA's ability to represent customers will also be
diminished. Sufficient time and good faith cooperation is
necessary to analyze and audit the operations and financial
records of a telephone company. AB 1693 will also provide
telephone companies with a strong incentive to file exorbitant
rate increase requests with little supporting data, and then
employ litigation tactics, such as prolonging the discovery
process, to cause delays in the processing of rate cases. Under
this bill, telephone companies would benefit from the delays.
Furthermore, the consequence of delays places ORA in a
substantially weaker position in negotiations to settle general
rate case applications."
ASSEMBLY FLOOR : 75-1, 4/21/14
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Bloom,
Bocanegra, Bonilla, Bonta, Bradford, Brown, Buchanan, Ian
Calderon, Campos, Chau, Ch�vez, Chesbro, Conway, Cooley,
Dababneh, Dahle, Daly, Dickinson, Donnelly, Eggman, Fong, Fox,
Frazier, Beth Gaines, Garcia, Gatto, Gomez, Gonzalez, Gordon,
Gorell, Gray, Grove, Hagman, Hall, Harkey, Roger Hern�ndez,
Holden, Jones, Jones-Sawyer, Levine, Linder, Logue, Lowenthal,
Maienschein, Mansoor, Medina, Mullin, Muratsuchi, Nazarian,
Nestande, Olsen, Pan, Patterson, Perea, V. Manuel P�rez,
Quirk, Quirk-Silva, Rendon, Ridley-Thomas, Rodriguez, Salas,
Skinner, Stone, Wagner, Waldron, Weber, Wieckowski, Wilk,
Williams, John A. P�rez
NOES: Ting
NO VOTE RECORDED: Bigelow, Melendez, Yamada, Vacancy
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JG:k 8/19/14 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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