BILL NUMBER: SB 48	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  JUNE 19, 2013
	AMENDED IN SENATE  MAY 8, 2013
	AMENDED IN SENATE  APRIL 8, 2013

INTRODUCED BY   Senator Hill

                        DECEMBER 19, 2012

   An act to add Section 740.5 to the Public Utilities Code, relating
to public utilities.


	LEGISLATIVE COUNSEL'S DIGEST


   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 require  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 bill   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 and  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 1.  Section 740.5 is added to the Public Utilities Code, to
read:
   740.5.  (a) For purposes of this section, the following terms have
the following meanings:
   (1) "Peer review" means a thorough, consistent, and objective
examination based on preestablished criteria by persons who are
independent of persons submitting an application, or conducting the
research and development, and who are knowledgeable in the field of
endeavor to which the application or research and development
pertains. Peer reviewers shall be free of any financial or other
interest which could significantly impair the individual's
objectivity or create  and   an  unfair
competitive advantage for any person or organization.
   (2) "Research and development project" includes a research,
development, and demonstration project or program. 
   (b) When reviewing any request from a public utility for
authorization to incur expenses for a research and development
project where the project expenses are to be recovered from
ratepayers and are in excess of one million five hundred thousand
dollars ($1,500,000) per year, the commission shall administer a peer
review of the proposed project before authorizing recovery of the
project's expenses from ratepayers. The peer review shall consider
all of the following:  
   (b) The commission shall, no later than July 1, 2015, and
triennially thereafter, require electrical corporations with more
than 100,000 customer accounts to file a three-year research plan.
The plan shall include:  
   (1) The research areas in which the utilities intend to engage.
 
   (2) Proposals for specific research and development projects, and
the estimated costs of the projects to the ratepayers.  
   (3) A proposed amount allocated for unspecified research. 

   (c) The Legislative Analyst's Office shall select members of a
peer review to evaluate the three-year research plan of each
electrical corporation. The peer review shall consider the electrical
corporation's research and development activities from the preceding
three years in evaluating the electrical corporation's proposed
research and development projects and in providing guidance to the
electrical corporation for improving the projects. Members of the
peer review may add supplemental reviewers on an ad hoc basis to
ensure the reviewers have sufficient technical expertise to evaluate
the projects. In their evaluation, the peer review shall consider the
technical aspects of the electrical corporation's project including,
but not limited to: 
   (1) The overall scientific or technical merits of the proposed
research and development project.
   (2) The extent to which the same or similar research, development,
and demonstration work could be performed by entities that the
public utility does not select.
   (3) The appropriateness of the level of requested funding in
 camparison   comparison  to other projects
by similarly  experience   experienced 
individuals using similar facilities performing in similar timeframes
and circumstances.
   (4) The likelihood that the proposed work can be accomplished
within the proposed time and budget by the investigators or the
technical staff, given their experience and expertise and available
resources. 
   (c) 
    (d)  The commission may waive the peer review
requirements in subdivision  (b)   (c)  for
a research and development project that was selected through an open
solicitation of proposals or if the project is contingent upon a
peer review by a public state or federal entity. 
   (d) 
    (e)  (1)  The commission shall 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 three 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. The
first report shall be submitted by December 31, 2014, and subsequent
reports shall be submitted by December 31 of every third year
thereafter, notwithstanding Section 10231.5 of the Government Code.
   (2) A report to be submitted pursuant to paragraph (1) shall be
submitted in compliance with Section 9795 of the Government Code.