Assembly of the State of California (“State Assembly”)

12 Cal. 4th 87 (1995), 48 Cal. Rptr. 2d 54

The California Supreme Court reversed a Commission order by which the Commission directed that a large portion of the interest component of a refund by Pacific Bell fund consumer education and school telecommunications development.  The remaining portion was to be refunded to ratepayers.  The Court ruled that the Commission’s disposition of the refund violated § 453.5 which requires that rate refunds be paid “to all current utility customers and, when practicable, to prior customers on an equitable basis . . .”  In so doing, the Court reaffirmed the restrictions on the scope of § 701, finding that, in light of the express directive of § 453.5, § 701 does not infer an “open-ended grant of authority to the Commission” with respect to the use of the funds.  Pacific Bell Wireless (Para. 20) and PG&E Corporation (Para. 26), however remind us that Section 701 retains considerable vitality as the Commission’s “necessary and proper” clause. State Assembly should not be read too broadly.  (But neither should PG&E Corporation.)

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