Bills Setting CPUC Limits and Transmission Forecasts Nixed

By Published On: October 6, 2006

Just prior to the September 30 enactment deadline, the governor vetoed bills that would have put constraints on the California Public Utilities Commission. They include legislation that would have tightened the conflict-of-interest standards for CPUC members, required them to weigh gas price volatility in procurement decisions, and directed them to evaluate the impact of the repeal of the federal Public Utility Holding Company Act of 1935 (PUHCA). Governor Arnold Schwarzenegger also rejected AB 974, by Assembly speaker Fabian Núñez (D-Los Angeles). It would have required 10-year transmission forecasts by the utilities, the grid operator, and the CPUC. The measure was vetoed because it focused on the commission’s “internal siting process.” AB 974 was also faulted for not eliminating agency duplication and for overlapping with SB 1095 – a bill that requires the California Energy Commission to establish transmission corridors. That measure, by Senator Martha Escutia (D-Los Angeles), was signed September 29. The California Public Utilities Commission supported AB 974 and opposed SB 1059 because it objects to the CEC stepping on its transmission turf. Escutia’s bill “is a first step we are quite concerned about,” said Steve Larson, CPUC executive director. The governor also vetoed SB 1753 by Senator Joe Dunn (D-Santa Ana), on the grounds that it “presupposed that the repeal of PUHCA would lead to negative consequences for California consumers, rather than the intended benefit of stimulating investment in electricity infrastructure.” The federal repeal, among other things, eases the approval process for utility mergers. PUHCA was originally intended to thwart excess consolidation in the energy business and to protect ratepayers. If the repeal leads to merged utilities overcharging ratepayers, however, the governor said, regulators assured him that “they are equipped to respond appropriately to any problems that may arise.” Senator Debra Bowen’s (D-Marina del Rey) SB 204 was rejected because it “could result in less clarity” on existing conflict-of-interest requirements, the governor wrote. That bill aimed to prohibit regulators from voting on issues that could affect their financial standing. Former CPUC member Henry Duque piqued legislators’ interest in the matter when he voted on a telecom bill that could have affected his stock portfolio (Circuit, Sept. 29, 2006). AB 2960 by Mark Ridley Thomas (D-Los Angeles) would have merely required the CPUC to consider gas price volatility when assessing utility deals. It got the boot because regulators adopted “aggressive risk management policies” to ensure that ratepayer gas bills are reasonable, stated Schwarzenegger’s veto message. He added that the measure also attempted to promote renewable energy but that SB 107, which he signed earlier, “more effectively addresses that goal.” Also vetoed was legislation setting green standards for state buildings. AB 1337 by Ira Ruskin (D-Los Altos) would have set green standards for the construction and renovation of government structures to “set an example for the private sector.” The governor also nixed two bills promoting alternative transportation fuels and vehicles and encouraging efficiency, SB 757 by Christine Kehoe (D-San Diego) and AB 1012 by Joe Nation (D-San Rafael). – Elizabeth McCarthy

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