Report 96020 Summary - November 1997

California Public Utilities Commission:

Its Fees May Not Cover Its Costs of Regulating Transportation Companies

The fees the Public Utilities Commission (commission) collects from privately owned railroad and passenger transportation companies (transportation companies) may not sufficiently cover the costs of regulating these companies. As a result, the commission's other fee-payers, such as trucking and utility companies, may be subsidizing railroad and passenger transportation regulation.

More specifically, because its accounting system does not separately identify expenditures for the commission's various funds, the commission does not know the true cost of services related to transportation regulation and its other fee-payers may have funded up to $1.4 million of these costs. In addition, fees received from railroad corporations do not cover all of the commission's corresponding expenses because the Public Utilities Code (code) limits the types of expenditures for which the commission can use such fees. Further, even though the commission's expenditures associated with the fees collected from railroad corporations did not exceed the $3 million limit imposed by the code, the commission may have used up to $180,000 in railroad fees for unauthorized purposes. Finally, the commission plans to install a new accounting system by July 1998 that, if properly designed, will allow the commission to collect its costs by fund.