AB 1659

Bill Subjects

Abstract

The California Constitution establishes the Public Utilities Commission and authorizes the commission to exercise ratemaking and rulemaking authority over all public utilities, as defined, subject to control by the Legislature. The Public Utilities Act authorizes the commission to supervise and regulate every public utility, including electrical corporations, and to do all things that are necessary and convenient in the exercise of that power and jurisdiction. 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 authorizes the commission, in a proceeding on an application by an electrical corporation to recover costs and expenses arising from a catastrophic wildfire occurring on or after January 1, 2019, to allow cost recovery if the costs and expenses are just and reasonable, after consideration of the conduct of the utility, including consideration of specified factors. Existing law establishes the Wildfire Fund to pay eligible claims arising from a covered wildfire, as provided. Existing law requires the commission to initiate a rulemaking proceeding to consider using its existing authority to require certain electrical corporations to collect a nonbypassable charge from its ratepayers to support the Wildfire Fund, and requires the commission to direct those electrical corporations to collect that charge if the commission determines that the imposition of the charge is just and reasonable and that it is an appropriate exercise of its authority, as specified. This bill would enact the Wildfire Prevention and Community Resilience Act of 2020 and would require the Natural Resources Agency, in consultation with the commission, to adopt an interim expenditure plan and an expenditure plan that are focused on reducing wildfire risk on the ground and in communities through activities such as defensible space implementation, home hardening, improved public safety, including expenditures to add trained emergency medical technicians to the workforce, and other authorized activities, as well as to prepare residents for wildfires through public education and outreach, as provided. The bill would establish the Wildfire Prevention and Community Resilience Fund and, upon appropriation by the Legislature, would require moneys in the fund be used for the implementation of those plans. The bill would require the Secretary of the Natural Resources Agency, upon the adoption of the interim plan, to notify the State Controller of the adoption. The bill would require, within 30 days of the notification, the transfer of $500,000,000 from the Surplus Money Investment Fund to the Wildfire Prevention and Community Resilience Fund, and would appropriate the money to the Natural Resources Agency for the implementation of the interim expenditure plan. The bill would provide for the repayment of the moneys transferred from the Wildfire Prevention and Community Resilience Fund to the Surplus Money Investment Fund, as provided. The bill would require the commission to require large electrical corporations, as defined, to collect, on and after a specified time, a nonbypassable charge from their ratepayers, as provided, to finance the bonds issued for the support of the Wildfire Prevention and Community Resilience Fund, as described below. Existing law, until January 1, 2003, authorizes the Department of Water Resources to enter into contracts for the purchase of electric power. Existing law authorizes the department to sell power to retail end use customers and local publicly owned electric utilities under certain circumstances. Existing law authorizes the department to issue revenue bonds and entitles the department to recover, as a revenue requirement, amounts necessary to enable it to finance the bonds and purchase electric power pursuant to these provisions. Existing law authorizes the department to issue Wildfire Fund bonds on and after either the date on which the department legally defeases all of its remaining bonds under the provisions described above or the date on which it pays those obligations in full at maturity, whichever is earlier, to support the Wildfire Fund. Existing law entitles the department to recover, as a revenue requirement, amounts necessary to enable it to finance the bonds in support of the Wildfire Fund. Existing law requires those bond proceeds and revenues received by the department to be deposited in the Department of Water Resources Charge Fund. Existing law continuously appropriates the moneys in the Department of Water Resources Charge Fund to the department for specified purposes, including transfers to the Wildfire Fund and repayment of the bonds issued in support of the Wildfire Fund. This bill would authorize the department to issue bonds, in an aggregate amount of up to $3,000,000,000, the repayment of which, including interest, commences on the date on which the department has paid in full, at maturity, or legally defeases any outstanding bonds issued for the support of the Wildfire Fund or on January 1, 2036, whichever is later, to support the Wildfire Prevention and Community Resilience Fund. The bill would entitle the department to recover, as a revenue requirement, amounts necessary to enable it to finance the bonds in support of the Wildfire Prevention and Community Resilience Fund. The bill would require those bond proceeds and revenues received by the department to be deposited in the Department of Water Resources Charge Fund. The bill would continuously appropriate the moneys in the Department of Water Resources Charge Fund to the department for specified purposes, including transfers to the Wildfire Prevention and Community Resilience Fund and repayment of the bonds issued for the support of the Wildfire Prevention and Community Resilience Fund. Under existing law, a violation of the Public Utilities Act or any order, decision, rule, direction, demand, or requirement of the commission is a crime. Because certain of the above provisions would be codified in the act and would require action by the commission, a violation of which would be a crime, this bill would impose a state-mandated local program. This bill would incorporate additional changes to Section 3289 of the Public Utilities Code proposed by SB 350 to be operative only if this bill and SB 350 are enacted and this bill is enacted last. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that no reimbursement is required by this act for a specified reason. This bill would declare that it is to take effect immediately as an urgency statute.