BILL ANALYSIS                                                                                                                                                                                                    �




                   Senate Appropriations Committee Fiscal Summary
                            Senator Kevin de Le�n, Chair


          SB 291 (Hill) - Public Utilities Commission: safety enforcement:  
          gas and electrical corporations.
          
          Amended: As introduced          Policy Vote: EU&C 11-0
          Urgency: No                     Mandate: No
          Hearing Date: April 15, 2013                      Consultant:  
          Marie Liu     
          
          This bill does not meet the criteria for referral to the  
          Suspense File.

          Bill Summary: SB 291 would require the Public Utilities  
          Commission (CPUC) to develop and implement procedures to grant  
          staff, under the direction of the executive director, citation  
          authority to gas and electrical corporations for safety  
          violations.

          Fiscal Impact: On-going costs of $112,000 annually from the  
          Public Utilities Commission Utilities Reimbursement Account  
          beginning in 2014-15 for additional enforcement workload.

          Background: Under existing CPUC procedures, an investigation and  
          proceeding may be opened when an investor owned utility (IOU) is  
          suspected of violating a CPUC rule in order determine the  
          magnitude of the potential violation and to assess appropriate  
          penalties. Such a proceeding is the only process available for  
          electrical violations. 

          In other areas within the CPUC's jurisdiction, including  
          Renewables Portfolio Standard filing requirements, railroad  
          citations, propane gas distribution system, and water and sewer  
          utilities, the CPUC has given staff the authority to issue  
          citations. A staff citation program was recently created for  
          safety regulations regarding gas corporations under Resolution  
          ALJ-274, passed in December 2011. The CPUC has initiated  
          development of a similar staff citation program for electrical  
          corporations but no program details are publically available at  
          this time. 

          Proposed Law: This bill would require the CPUC to develop a  
          staff citation program to gas and electrical corporations for  
          safety violations. This program must include an appeals process.








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          Staff Comments: Consistent with the fact that the CPUC has  
          already developed a staff citation program for gas and has  
          initiated development of a program for electricity, the CPUC  
          believes that the cost of developing the program required by  
          this bill is absorbable. The program can be created through  
          staff resolution and does not require a proceeding. 

          However, there are anticipated implementation costs. The goal of  
          this bill is to increase safety compliance through the threat of  
          increased citations. As such, it is reasonable to expect that  
          the CPUC may see an increased enforcement workload. The CPUC  
          estimates that they are likely to need one Utilities Engineer at  
          a cost of $112,000 to manage citations and appeals. Staff notes  
          that the existing gas citation program has only resulted in one  
          citation since its inception. However, given the short existence  
          of the gas citation program, this may not be indicative of  
          future enforcement workload needs.

          Staff notes that in recent years the Legislature has approved a  
          significant number of new positions to enhance the CPUC's safety  
          division, including 19 positions in the 2012-13 budget (of the  
          41 positions requested by the Governor). However, given the  
          significant backlog of safety work needed at the CPUC, staff  
          believes it is not unreasonable that the CPUC may need an  
          additional PY for effective implementation.

          The CPUC also notes that they will likely need to develop a  
          database to track gas and electric citations effectively and to  
          improve public access to these records. Citations records are  
          currently being maintained manually. At this time the CPUC does  
          not have an estimate for the costs to develop such a database.  
          Staff notes that database development costs can easily cost in  
          the hundreds of thousands of dollars. However, while a database  
          can aid implementation, neither the database nor improved public  
          information is specifically required by the bill. Also, it seems  
          likely that the CPUC may need to develop such a database to  
          properly fulfill its existing responsibilities irrespective of  
          this bill. Thus staff believes the database development costs  
          should not be attributed to this bill. 












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