Granting of utility franchises.
This amendment may affect how local governments manage the granting of utility franchises, creating a more standardized approach to ensuring compliance among franchisees. By allowing the requirement of a bond, local governments can seek reassurance that the awarded franchises will be executed responsibly. It aims to streamline the process while simultaneously implementing a safety net that protects taxpayers and the utility services' integrity.
Assembly Bill 1125, introduced by Assembly Member Calderon on February 18, 2021, seeks to amend Section 6010 of the Public Utilities Code concerning the granting of utility franchises by local governments, including cities and counties. This bill proposes a nonsubstantive modification that authorizes these governmental bodies to require a surety bond as a condition for awarding a utility franchise. The underlying principle is to ensure that the franchisee adheres to the terms and conditions of the franchise agreement, thereby safeguarding public interests.
While the bill does not appear to evoke significant opposition, it represents a shift towards increased oversight of franchised utility services. Potential points of contention may arise regarding the implications of bond requirements on smaller utility providers. Critics may argue that such requirements could disproportionately affect smaller entities unable to meet bond conditions, thereby consolidating market power among larger utility providers. Furthermore, discussions could arise around the sufficiency of state oversight versus local regulatory autonomy.