AB 681

This bill authorizes the Public Service Commission to rescind, alter, or amend

an advance order specifying the rate-making principles applicable to a public

utility's recovery of capital costs for purchasing or constructing an electric

generating facility. Under the bill, PSC may amend such an order if it determines

that market conditions related to the facility have changed and that the actual costs

of the facility have substantially decreased since the order was issued. The public

utility has at least 60 days to accept or waive acceptance of an order altered or

amended under the bill. If the public utility waives acceptance of that order, PSC

must withdraw that order and any other prior advance order specifying rate-making

principles for recovery of the facility's capital costs, and must consider the facility's

capital costs in all future rate-making proceedings as if no advance order had been

issued.

Under current law, a public utility may apply to PSC for an advance order

specifying the rate-making principles for recovery of capital costs of a facility. If the

public utility accepts the advance order, PSC is bound by that order in its treatment

of the recovery of the facility's capital costs in all future rate-making proceedings

involving the public utility. If the public utility waives acceptance of the advance

order, PSC must withdraw the order and consider the facility's capital costs in all

future rate-making proceedings as if no advance order had been issued.

The bill also requires PSC to reopen proceedings that resulted in the issuance

of a certificate of public convenience and necessity (CPCN) or a certificate of

authority (CA) for a facility or project if it determines that the actual cost of

constructing the facility or project is 5 percent or more above the construction cost

approved by PSC in issuing the CPCN or CA. PSC must hold a public hearing and

public comment period of at least 15 days on the reasons for the increase in

construction costs. If in the public interest, PSC may rescind, alter, or amend the

CPCN or CA for the facility or project. Under current law, a person seeking to

construct a large electric generating facility or high-voltage transmission line must

obtain a CPCN from PSC. In addition, a public utility must obtain a CA from PSC

to construct certain other facilities and projects.