SB 48, as amended, Hill. Public utilities: research and development projects.
Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including electrical corporations, gas corporations, heat corporations, and telephone corporations, as defined. Existing law authorizes the commission to fix the rates and charges for every public utility, and requires that those rates and charges be just and reasonable. Existing law authorizes electrical corporations, gas corporations, heat corporations, and telephone corporations to voluntarily adopt certain research and development programs and authorizes the commission to allow inclusion of expenses for research and development in rates. Existing law requires the commission to consider specified guidelines in evaluating the research, development, and demonstration programs proposed by electrical corporations and gas corporations.
This bill
would requirebegin delete that when the commission reviews a request from a public utility for authorization to incur expenses for a research and development project, as defined, where the project expenses are to be recovered from ratepayers and are in excess of $1,500,000 per year, the commission is to administer a peer review, as defined, with certain exceptions. The billend deletebegin insert the commission, by July 1, 2015, and every 3 years thereafter, to require electrical corporations with more than 100,000 customer accounts, to file a 3-year research plan, which includes, among other things, proposals for specific research and development projects and the estimated costs of the projects to the ratepayers. The bill would require the Legislative Analyst’s Office to select members of a peer review to evaluate the 3-year research plan of each electrical corporation andend insert
would require that the peer review consider specified matters. The bill would require the commission, by December 31, 2014, and by December 31 of each 3rd year thereafter, to prepare and submit a report to the relevant policy and fiscal committees of the Legislature listing all research and development projects where the expenses of the project were or are recovered from ratepayers during the previous 3 years, including for each project the citations of all published papers, all oral and poster presentations given at public meetings, and all patents awarded for the funded research.
Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.
The people of the State of California do enact as follows:
Section 740.5 is added to the Public Utilities
2Code, to read:
(a) For purposes of this section, the following terms
4have the following meanings:
5(1) “Peer review” means a thorough, consistent, and objective
6examination based on preestablished criteria by persons who are
7independent of persons submitting an application, or conducting
8
the research and development, and who are knowledgeable in the
9field of endeavor to which the application or research and
10development pertains. Peer reviewers shall be free of any financial
11or other interest which could significantly impair the individual’s
12objectivity or createbegin delete andend deletebegin insert anend insert unfair competitive advantage for any
13person or organization.
14(2) “Research and development project” includes a research,
15development, and demonstration project or program.
16(b) When reviewing any request from a public utility for
17authorization to incur expenses for a research and development
P3 1project where the project expenses are to be recovered from
2ratepayers and are in excess of one million five hundred thousand
3dollars ($1,500,000) per year, the commission shall administer a
4peer
review of the proposed project before authorizing recovery
5of the project’s expenses from ratepayers. The peer review shall
6consider all of the following:
7(b) The commission shall, no later than July 1, 2015, and
8triennially thereafter, require electrical corporations with more
9than 100,000 customer accounts to file a three-year research plan.
10The plan shall include:
11(1) The research areas in which the utilities intend to engage.
end insertbegin insert
12(2) Proposals for specific research and
development projects,
13and the estimated costs of the projects to the ratepayers.
14(3) A proposed amount allocated for unspecified research.
end insertbegin insert
15(c) The Legislative Analyst’s Office shall select members of a
16peer review to evaluate the three-year research plan of each
17electrical corporation. The peer review shall consider the electrical
18corporation’s research and development activities from the
19preceding three years in evaluating the electrical corporation’s
20proposed research and development projects and in providing
21guidance to the electrical corporation for improving the projects.
22Members of the peer review may add supplemental reviewers on
23an ad hoc basis to ensure the
reviewers have sufficient technical
24expertise to evaluate the projects. In their evaluation, the peer
25review shall consider the technical aspects of the electrical
26corporation’s project including, but not limited to:
27(1) The overall scientific or technical merits of the proposed
28research and development project.
29(2) The extent to which the same or similar research,
30development, and demonstration work could be performed by
31entities that the public utility does not select.
32(3) The appropriateness of the level of requested funding in
33begin delete camparisonend deletebegin insert comparisonend insert
to other projects by similarlybegin delete experienceend delete
34begin insert experiencedend insert individuals using similar facilities performing in
35similar timeframes and circumstances.
36(4) The likelihood that the proposed work can be accomplished
37within the proposed time and budget by the investigators or the
38technical staff, given their experience and expertise and available
39resources.
40(c)
end delete
P4 1begin insert(d)end insert The commission may waive the peer review requirements
2in subdivisionbegin delete (b)end deletebegin insert
(c)end insert for a research and development project that
3was selected through an open solicitation of proposals or if the
4project is contingent upon a peer review by a public state or federal
5entity.
6(d)
end delete
7begin insert(e)end insert (1)
The commission shall prepare and submit a report to
8the relevant policy and fiscal committees of the Legislature listing
9all research and development projects where the expenses of the
10project were or are recovered from ratepayers during the previous
11three years, including for each project the citations of all published
12papers, all oral and poster presentations given at public meetings,
13and all patents awarded for the funded research. The first report
14shall be submitted by December 31, 2014, and subsequent reports
15shall be submitted by December 31 of every third year thereafter,
16notwithstanding Section 10231.5 of the Government Code.
17(2) A report to be submitted pursuant to paragraph (1) shall be
18submitted in compliance with Section 9795 of the Government
19Code.
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