SB 1x hearing today

As you may know, SB 1x (Soto/Scott) passed the Senate Appropriations
Committee by an initial vote of 7-3 (the bare minimum).
Senator Soto said that the Legislature must make a "bold proposition" with
this bill.? She said that this experience is "like no consumer has been
gouged before."? The Legislature must cap rates.? This bill guarantees a
generous profit to generators.
Senator Scott said that these generator profits have been gained off of
consumers.? According to FERC, over $500 million in excess profits have been
reaped.? Californians have been "royally mistreated" by generators.? This
"money has left the state (to Texas and other places)."? This bill is the
only solution.? The PUC can change the $80 rate.? Based upon the January
Field Poll, Californians support this concept.? We have to "stand up to the
generators and say no more."
Supporters were:? TURN and CTRA (Lenny Goldberg).? Lenny said that the FERC
will not give any relief to CA ratepayers, so the Legislature has to.? This
bill needs to be combined with the power authority by Senator Burton to hold
prices down.
Other supporters of the bill included:? Congress of CA Seniors; CalPIRG; CA
Consumer Federation; CA Labor Federation; SEIU; Public Power Now.? SEIU
(public employee union) said that this bill is "the only way to put caps on
rates."
Opponents were CMTA ("this is the wrong medicine for solving the problem");
WSPA (does nothing to resolve the shortage of energy; we should be doing
bills to stimulate greater investment in supply); Intergen said that they
are looking at California market, but will not build with this bill out
there.? CA Wind Energy Assn (QFs oppose this bill because the rate is too
low); and IEP (most productive answer to our problem is the build power
plants).
Senator Battin said that the price cap is lower than some of the Governor's
long-term contracts at $86 per hour.? Senator Scott said that the munis are,
indeed, covered by the bill.? He also said that the PUC can change the rates
contained in this bill.? Scott also said that the PUC can exempt renewables
under the bill.
Senator Bowen stated that the $80 figure should be removed from the bill
("this price may be inappropriate").? She suggested using the "FERC proxy
price."? She suggested that they look at an exemption for contracts with the
state.? She saw no reason to exempt the renewables because they would make a
bundle with an $80 cap.
Senator Poochigian said he was concerned about the majority vote issue
(because this bill is allegedly revenue neutral).? Scott said all of the
money raised by the bill will go to ratepayers.? He said that Legislative
Counsel gave him an opinion (I don't know if it is written or verbal) that
this scheme was permitted.? Poochigian said it was ironic that the PUC was
being given the authority to set rates under this bill.
Senator Scott stated that they would take as an author's amendment to
exclude all long-term contracts from the provisions of this bill.
Next stop for the bill is the Senate Floor.
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Chris Micheli, Esq.
Carpenter Snodgrass & Associates
1201 K Street, Suite 710
Sacramento, CA? 95814
(916) 447-2251
FAX: (916) 445-5624
EMAIL: cmicheli@carpentersnodgrass.com