BILL ANALYSIS                                                                                                                                                                                                    




                                                          AB 1890
                                                         Page 1

CONCURRENCE IN SENATE AMENDMENTS
AB 1890 (Brulte)
As Amended June 19, 1996 
Majority vote

 ASSEMBLY:       (July 24, 1995) SENATE:  40-0  (June 24, 1995)      
 
     (vote not relevant) 

Original Committee Reference:   U. & C.

 SUMMARY:  States the intent of the Legislature with respect to the  
restructuring of the electrical services industry.

 The Senate amendments:
 
1)  Set forth issues which the Legislature has a necessary role in  
resolving, in conjunction with the California Public Utilities  
Commission (PUC) and the industry's efforts to restructure the  
electrical services industry.  The policy issues articulated in  
this bill include:

    a)  The design of the new industry model to facilitate  
       competition in the generation of electricity;

    b)  Market power concerns.

    c)  Competition transition charge (CTC) calculation, including  
       definition of CTC, methodology for determining value of  
       stranded assets, and the imposition of CTC upon various  
       consumer classes with regard to time and method of the CTC  
       mechanism.

    d)  Future structure of the transmission and distribution  
       (T&D) system and related issues such as comparable access,  
       the role of the independent system operator, and the extent  
       of continuing regulation of T&D in order to ensure  
       continuing safety, reliability coupled with  
       cost-effectiveness.

    e)  Legislative review of all state-mandated programs related  
       to electrical service including, effectiveness of the  
       programs, role of a competitive market in maintaining such  
       programs, options for continued funding under restructured  
       industry.

    f)  State and federal jurisdictional issues associated with  
       the restructuring effort and an examination of current  
       policies with the goal of facilitating coordination between  
       state and federal efforts.

2)  Double join with AB 1890 (Brulte), pending in the Assembly.
    
 FISCAL EFFECT:  Unknown









                                                          AB 1890
                                                         Page 2

 EXISTING LAW vests the PUC with regulatory authority over public  
utilities.

 AS PASSED BY THE ASSEMBLY, this bill required the PUC's decision  
to restructure the electrical services industry, and the orders  
implementing that decision, comply with specific criteria, such as  
1) establishing a definite 
period for the transition to a competitive market, and; 2)  
establishing a methodology for CTC determination and recovery.

 BACKGROUND:  This bill is intended to go to the joint conference  
committee on electrical restructuring in conjunction with AB 3153  
(Martinez).  The Senate has two vehicles, SB 1139 (Mountjoy) and  
SB 1141 (Costa), slated for the joint committee.  The Senate  
vehicles were voted out of the Assembly last week.  This bill was  
substantially amended in the Senate and has not been reviewed by  
an Assembly policy committee.

 ARGUMENTS IN SUPPORT:  None 

 ARGUMENTS IN OPPOSITION:  None 


 Analysis prepared by:  John G. Larrea / auc / (916) 445-4246


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