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SB-1028 Public utilities: rates: federal tax law changes.(2017-2018)

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Date Published: 04/10/2018 09:00 PM
SB1028:v98#DOCUMENT

Amended  IN  Senate  April 10, 2018

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Senate Bill No. 1028


Introduced by Senator Hill

February 08, 2018


An act to add Section 751 to the Public Utilities Code, relating to public utility rates, and declaring the urgency thereof, to take effect immediately. rates.


LEGISLATIVE COUNSEL'S DIGEST


SB 1028, as amended, Hill. Public utilities: rates: federal tax law changes.
Under existing law, the Public Utilities Commission has regulatory authority over public utilities. 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.
This bill would require the commission to evaluate the full effect of the enactment of federal House Resolution 1 (Public Law 115-97) upon the expenses and tax liabilities incurred by public utilities for payment of federal taxes and, if the commission determines that the projected expenses and tax liabilities for federal taxes that the commission has authorized to be recovered in the rates for a public utility are materially affected by the enactment, would require the commission to adjust the rates of the utility to reflect the changes in projected expenses and tax liabilities in light of the changes in federal law. The bill would require that a utility’s rates be adjusted within 90 days after any probable savings can be determined, or reasonably estimated, for that utility.

This bill would declare that it is to take effect immediately as an urgency statute.

Vote: TWO_THIRDSMAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

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


SECTION 1.

 Section 751 is added to the Public Utilities Code, to read:

751.
 (a) This section applies only to those public utilities over which the commission exercises its authority to fix rates. rates and only to the extent the revenue requirements of the utility were based upon the tax rates in effect at the time rates were fixed for the utility by the commission. This section does not limit the discretionary authority of the commission to adjust any incentives provided pursuant to any state supervised or administered program, including the state’s telecommunications universal service programs administered pursuant to Chapter 1.5 (commencing with Section 270).
(b) The commission shall evaluate the full effect of the enactment of federal House Resolution 1 (Public Law 115-97) upon the expenses and tax liabilities incurred by public utilities for payment of federal taxes. If the commission determines that the projected expenses and tax liabilities for federal taxes that the commission has authorized to be recovered in the rates for a public utility are materially affected by the enactment of federal House Resolution 1 (Public Law 115-97), the commission shall adjust the rates of the utility to reflect the changes in projected expenses and tax liabilities in light of the changes in federal law. The adjustment in a public utility’s rates shall be made within 90 days after any probable savings can be determined, or be reasonably estimated, for that utility. This section does not limit the discretionary authority of the commission to determine the full effect of the changes in federal tax law on each utility’s cost of service, to utilize appropriate mechanisms at its disposal to track changes and adjust rates accordingly, and to allocate the benefits from changes in federal tax law over the period of time that results in the most reasonable allocation based on the particular circumstances of each utility.

SEC. 2.

This act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the California Constitution and shall go into immediate effect. The facts constituting the necessity are:

Many of the revisions to federal tax law made by federal House Resolution 1 (Public Law 115-97) will go into effect during the 2018 calendar year and the state should not wait until a public utility’s next general rate case to adjust rates to reflect the lowering of a public utility’s expenses. In order to ensure that ratepayers receive the benefits of any reductions in utility expenses, and to enable those ratepayers to use the savings for necessary food, medical, and other necessary expenses, it is necessary for this act to take effect immediately.