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SB-819 Electrical and gas corporations: rates.(2017-2018)

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Date Published: 09/01/2018 04:00 AM
SB819:v94#DOCUMENT

Enrolled  August 31, 2018
Passed  IN  Senate  August 28, 2018
Passed  IN  Assembly  August 27, 2018
Amended  IN  Assembly  August 20, 2018
Amended  IN  Assembly  June 27, 2018
Amended  IN  Assembly  June 13, 2018
Amended  IN  Senate  April 09, 2018

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Senate Bill No. 819


Introduced by Senators Hill, Dodd, McGuire, and Wiener
(Principal coauthors: Assembly Members Levine and Wood)
(Coauthor: Senator Allen)

January 03, 2018


An act to amend Section 959 of, and to add Section 748 to, the Public Utilities Code, relating to energy.


LEGISLATIVE COUNSEL'S DIGEST


SB 819, Hill. Electrical and gas corporations: rates.
Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including electrical corporations and gas corporations. Existing law authorizes the commission to establish rules for all public utilities, subject to control by the Legislature. Existing law authorizes the commission to fix the rates and charges for every public utility and requires that those rates and charges be just and reasonable. Existing law prohibits a gas corporation from recovering any fine or penalty in any rate approved by the commission.
This bill would additionally prohibit an electrical corporation from recovering a fine or penalty through a rate approved by the commission and would make related nonsubstantive changes.
The Public Utilities Act authorizes the commission to ascertain and fix just and reasonable standards, classifications, regulations, practices, measurements, or service to be furnished, imposed, observed, and followed by specified public utilities, including all electrical corporations and gas corporations. If the commission finds, after a hearing, that the rules, practices, equipment, appliances, facilities, or service of any public utility, or the methods of manufacture, distribution, transmission, storage, or supply employed by the public utility, are unjust, unreasonable, unsafe, improper, inadequate, or insufficient, the act requires that the commission determine and, by order or rule, fix the rules, practices, equipment, appliances, facilities, service, or methods to be observed, furnished, constructed, enforced, or employed.
This bill would prohibit an electrical corporation or gas corporation from recovering through a rate approved by the commission costs or expenses arising from damages caused by the electrical corporation’s electric plant or the gas corporation’s gas plant if the commission determines that the electrical or gas corporation, or its agent, did not reasonably construct, maintain, manage, control, or operate the plant and this unreasonable act or omission by the electrical or gas corporation, or its agent, increased the risk of the plant causing those damages. The bill would authorize the commission, for an electrical or gas corporation’s rate application to recover costs or expenses, to authorize the recovery of those costs or expenses, in full or in part, and would specify that only those costs or expenses that are just and reasonable, which may comprise only a portion of those costs or expenses, are recoverable. The bill would state the intent of the Legislature and make legislative findings and declarations regarding the commission’s rate recovery functions.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 Section 748 is added to the Public Utilities Code, to read:

748.
 (a) An electrical corporation or gas corporation shall not recover through a rate approved by the commission either of the following:
(1) A fine or penalty.
(2) Costs or expenses resulting from damages caused by an electrical corporation’s electric plant or a gas corporation’s gas plant, if the commission determines that the electrical or gas corporation, or its agent, if applicable, did not reasonably construct, maintain, manage, control, or operate the plant and this unreasonable act or omission by the electrical or gas corporation, or its agent, increased the risk of the plant causing those damages. The commission’s determination of whether those damages were caused by the electric plant or gas plant shall not be admissible in a court action for damages brought against the electrical or gas corporation, or its agent, as applicable.
(b) For any rate application to recover costs or expenses filed by an electrical or gas corporation, the commission may authorize recovery of those costs or expenses, in full or in part. Only those costs or expenses that are just and reasonable, which may comprise only a portion of the costs or expenses contained in the application, may be recovered.
(c) (1) It is the intent of the Legislature that this section not limit or alter the commission’s authority or obligations under the Public Utilities Act, including to require that all charges be just and reasonable and that each electrical corporation and gas corporation demonstrate to the commission that all costs or expenses that the corporation seeks to recover from customers through a rate approved by the commission have been reasonably and prudently incurred.
(2) The Legislature finds and declares that, as of the operative date of this section, for rate recovery purposes, the commission was already authorized to calculate liability and to allocate costs or expenses in full or in part, if the full or partial approval of the costs or expenses was just and reasonable, when the commission ruled on an application by an electrical or gas corporation seeking to recover costs or expenses.

SEC. 2.

 Section 959 of the Public Utilities Code is amended to read:

959.
 Each gas corporation shall demonstrate to the satisfaction of the commission, in its general rate case proceeding, that the requested revenue requirements will be sufficient to enable the gas corporation to fund those projects and activities necessary to maintain safe and reliable service and to meet federal and state safety requirements applicable to its gas plant in a cost-effective manner.