BILL ANALYSIS �
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|SENATE RULES COMMITTEE | SB 711|
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THIRD READING
Bill No: SB 711
Author: Padilla (D)
Amended: 1/6/14
Vote: 21
SENATE ENERGY, UTILITIES & COMMUNIC. COMM. : 6-0, 1/14/14
AYES: Padilla, Cannella, De Le�n, DeSaulnier, Hill, Wolk
NO VOTE RECORDED: Fuller, Corbett, Knight, Pavley, Wright
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
SUBJECT : Public Utilities Commission: fees
SOURCE : Author
DIGEST : This bill permits the Public Utilities Commission
(PUC) to charge up to $500 for filing a certificate of public
convenience and necessity (CPCN) as specified, and clarifies
that all fees and charges collected be deposited into the PUC
Utilities Reimbursement Account (Account) rather than into the
state General Fund.
ANALYSIS :
Existing law:
1.States that the PUC has regulatory authority over public
utilities.
2.Allows the PUC to charge and collect a fee of $75 for filing
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each application for a CPCN, or for the mortgage, lease,
transfer, or assignment of a certificate.
3.Establishes the Account and generally provides that all fees
and charges collected under the Public Utilities Code from
each public utility, except penalties, be paid into the fund.
4.Provides that specified fees, including, but not limited to,
the fee for filing each application for a CPCN, or for the
mortgage, lease, transfer, or assignment of a certificate, are
required to be paid at least once each month into the State
Treasury to the credit of the General Fund.
This bill:
1.Repeals the $75 application fee and instead permits the PUC to
charge up to $500, not to exceed the reasonable cost of
processing an application.
2.Authorizes the PUC to adjust the application fee based on the
Consumer Price Index, to track inflation.
3.Clarifies that all fees and chargers collected by the PUC be
deposited into the Account rather than into the state General
Fund.
Background
CPCN . A CPCN is a permit issued by the PUC to a service
provider that wants to establish itself as a regulated entity
and/or construct or extend facilities or telecommunications
services. For example, an electrical corporation is required to
have a CPCN to construct a transmission line or a substation, a
water corporation must have one to build a water facility, and a
telephone corporation needs one to provide telephone service.
CPCN application review process . The review of a CPCN
application is generally a lengthy, in-depth process that
involves two concurrent and parallel procedures: (1)
environmental review pursuant to the California Environmental
Quality Act; and, (2) need/cost review pursuant to Public
Utilities Code Section 1001 et seq. and General Order 131-D.
The environmental review includes scoping meetings, workshops,
numerous comment periods, and responses to the public's comments
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on the draft environmental impact report. The review of project
need and costs involves the filing of responses and protests, a
pre-hearing conference, scoping memo, and evidentiary hearings
and briefs. After the 30-day period for public review and
comment has passed, the PUC votes on the proposed decision
prepared by an administrative law judge and any alternate
decision(s) put forward by commissioner(s). Given the numerous
steps in this process, processing a single CPCN application may
require thousands of dollars in staff and commissioner time, and
take years to complete.
CPCN application fee . The CPCN application fee was statutorily
set at $75 in 1969. Since then, the PUC has not had the
authority to revise it to account for changes in the economy or
regulatory environment. According to the PUC, inflation has
increased 530.5% since 1969. The Consumer Price Index estimates
that $75 in 1969 is equivalent to $476.30 in 2013, hence the
proposed $500 cap.
Comments
According to the author's office, given inflation, $75 does not
reflect the administrative cost of reviewing a CPCN application.
According to the PUC, increasing the CPCN application fee is
necessary to "better reflect the cost of the initial license
review?cover the costs associated with the review of lease,
transfer, or assignment of CPCN transactions?and permit more
effective review and enforcement of certificate licensing
activities."
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
JG:k 1/21/14 Senate Floor Analyses
SUPPORT/OPPOSITION: NONE RECEIVED
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