Senate Bill No. 611

Introduced by Senator Hill

February 22, 2013

An act to amend Sections 305, 307, 308, 309.6, 1701.2, and 1701.3 of the Public Utilities Code, relating to the Public Utilities Commission.

LEGISLATIVE COUNSEL’S DIGEST

SB 611, as introduced, Hill. Public Utilities Commission: organization: proceedings.

The California Constitution establishes the Public Utilities Commission, with jurisdiction over all public utilities, as defined. The California Constitution grants the commission certain general powers over all public utilities, subject to control by the Legislature, and authorizes the Legislature, unlimited by the other provisions of the California Constitution, to confer additional authority and jurisdiction upon the commission, that is cognate and germane to the regulation of public utilities. Existing law requires the Governor to designate the president of the commission from among its members and requires the president to direct the executive director, the attorney, and other staff of the commission, except for the Division of Ratepayer Advocates, in accordance with commission policies and guidelines.

The bill would repeal the requirement that the president direct the executive director, attorney, and other staff of the commission.

Existing law authorizes the attorney for the commission, if directed to do so by the president, except as otherwise directed by vote of the commission, to intervene, if possible, in any action or proceeding involving any question arising pursuant to the Public Utilities Act. Existing law requires the attorney for the commission to commence, prosecute, and expedite the final determination of all actions and proceedings, and to generally perform all duties and services as attorney to the commission, as directed or authorized by the president, except as otherwise directed or authorized by vote of the commission.

This bill would authorize the attorney for the commission, if directed to do so by the commission, to intervene, if possible, in any action or proceeding involving any question arising pursuant to the Public Utilities Act. This bill would require the attorney for the commission to commence, prosecute, and expedite the final determination of all actions and proceedings, and to generally perform all duties and services as attorney to the commission, as directed or authorized by the commission.

Existing law requires the executive director for the commission to keep a full and true record of all proceedings of the commission, issue all necessary process, writs, warrants, and notices, and perform such other duties as the president, or vote of the commission, prescribes. Existing law provides that the president may authorize the executive director to dismiss complaints or applications when all parties are in agreement thereto, in accordance with rules that the commission may prescribe.

This bill would require the executive director to keep a full and true record of all proceedings of the commission, issue all necessary process, writs, warrants, and notices, and perform the other duties the commission prescribes. The bill would provide that the commission may authorize the executive director to dismiss complaints or applications when all parties are in agreement thereto, in accordance with rules that the commission may prescribe.

The California Constitution authorizes the commission to establish its own procedures, subject to statutory limitations or directions and constitutional requirements of due process. Existing law provides for the appointment of administrative law judges and the assigning of commissioners to preside over cases before the commission and requires the commission, to adopt procedures on the disqualification of administrative law judges due to bias or prejudice similar to those of other state agencies and superior courts.

This bill would require the commission to additionally adopt procedures on the disqualification of commissioners due to bias or prejudice similar to those of other state agencies and superior courts.

Existing law establishes certain procedures that are applicable to adjudication, rulemaking and ratesetting cases. Existing law requires the commission, by regulation, to provide for peremptory challenges and challenges for cause of an assigned administrative law judge in adjudication and ratesetting cases and entitles parties to unlimited peremptory challenges in any case in which the administrative law judge has, within the previous 12 months, served in any capacity in an advocacy position at the commission, been employed by a regulated public utility, or has represented a party or has been a party of interest in the case.

This bill would require the commission, by rule, to provide for peremptory challenges and challenges for cause of an assigned administrative law judge or assigned commissioner in adjudication and ratesetting cases and entitles parties to unlimited peremptory challenges in any case in which the administrative law judge or assigned commissioner has, within the previous 12 months, served in any capacity in an advocacy position at the commission, been employed by a regulated public utility, or has represented a party or has been a party of interest in the case. The bill would prohibit an officer, employee, or agent of the commission that is assigned to assist in the prosecution of, or to testify in, an adjudication case, from participating in the decision of the case, or in the decision of any factually related proceeding. The bill would permit an officer, employee, or agent of the commission that is assigned to assist in the prosecution of an adjudication case to participate in reaching a settlement of the case, but would prohibit the officer, employee, or agent from participating in the decision of the commission to accept or reject the settlement, except as a witness or counsel in an open hearing or a specified closed hearing.

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 305 of the Public Utilities Code is
amended to read:

305.  

The Governor shall designate a president of the
commission from among the members of the commission. begin delete The
president shall direct the executive director, the attorney, and other
staff of the commission, except for the staff of the division
described in Section 309.5, in the performance of their duties, in
accordance with commission policies and guidelines. end delete The president
shall preside at all meetings and sessions of the commission.

SEC. 2.  

Section 307 of the Public Utilities Code is amended
to read:

307.  

(a) The commission may appoint as attorney to the
commission an attorney at law of this state, who shall hold office
during the pleasure of the commission.

(b) The attorney shall represent and appear for the people of the
State of California and the commission in all actions and
proceedings involving any question under this part or under any
order or act of the commission. If directed to do so by begin delete the president,
except as otherwise directed by vote of end delete the commission, the
attorney shall intervene, if possible, in any action or proceeding
in which any such question is involved.

(c)  begin delete The end delete begin insert Except as provided in Section 1701.2, the end insert attorney shall
commence, prosecute, and expedite the final determination of all
actions and proceedings directed or authorized by begin delete the president,
except as otherwise directed or authorized by vote of end delete the
commission, advise the commission and each commissioner, when
so requested, in regard to all matters in connection with the powers
and duties of the commission and the members thereof, and
generally perform all duties and services as attorney to the
commission that begin delete the president, or vote of end delete the commission, may
require of him.

SEC. 3.  

Section 308 of the Public Utilities Code is amended
to read:

308.  

(a) The commission shall appoint an executive director,
who shall hold office during its pleasure. The executive director
shall be responsible for the commission’s executive and
administrative duties and shall organize, coordinate, supervise,
and direct the operations and affairs of the commission and
expedite all matters within the commission’s jurisdiction.

(b) The executive director shall keep a full and true record of
all proceedings of the commission, issue all necessary process,
writs, warrants, and notices, and perform such other duties as begin delete the
president, or vote of end delete the commission, prescribes. The begin delete president end delete
begin insert commission end insert may authorize the executive director to dismiss
complaints or applications when all parties are in agreement
thereto, in accordance with rules that the commission may
prescribe.

(c) The commission may appoint assistant executive directors
who may serve warrants and other process in any county or city
and county of this state.

SEC. 4.  

Section 309.6 of the Public Utilities Code is amended
to read:

309.6.  

(a) The commission shall adopt procedures on the
disqualification of administrative law judges begin insert and commissioners end insert
due to bias or prejudice similar to those of other state agencies and
superior courts.

(b) The commission shall develop the procedures with the
opportunity for public review and comment.

SEC. 5.  

Section 1701.2 of the Public Utilities Code is amended
to read:

1701.2.  

(a) If the commission pursuant to Section 1701.1 has
determined that an adjudication case requires a hearing, the
procedures prescribed by this section shall be applicable. The
assigned commissioner or the assigned administrative law judge
shall hear the case in the manner described in the scoping memo.
The scoping memo shall designate whether the assigned
commissioner or the assigned administrative law judge shall preside
in the case. The commission shall provide by begin delete regulation end delete begin insert rule end insert for
peremptory challenges and challenges for cause of the
administrative law judge begin insert or assigned commissioner end insert . Challenges
for cause shall include, but not be limited to, financial interests
and prejudice. The begin delete regulation end delete begin insert rule end insert shall provide that all parties are
entitled to one peremptory challenge of the assignment of the
administrative law judge begin insert and one peremptory challenge of the
assigned commissioner end insert in all cases. All parties are entitled to
unlimited peremptory challenges in any case in which the
administrative law judge begin insert or the assigned commissioner end insert has within
the previous 12 months served in any capacity in an advocacy
position at the commission, been employed by a regulated public
utility, or has represented a party or has been a party of interest in
the case. The assigned commissioner or the administrative law
judge shall prepare and file a decision setting forth
recommendations, findings, and conclusions. The decision shall
be filed with the commission and served upon all parties to the
action or proceeding without undue delay, not later than 60 days
after the matter has been submitted for decision. The decision of
the assigned commissioner or the administrative law judge shall
become the decision of the commission if no further action is taken
within 30 days. Any interested party may appeal the decision to
the commission, provided that the appeal is made within 30 days
of the issuance of the decision. The commission may itself initiate
a review of the proposed decision on any grounds. The commission
decision shall be based on the record developed by the assigned
commissioner or the administrative law judge. A decision different
from that of the assigned commissioner or the administrative law
judge shall be accompanied by a written explanation of each of
the changes made to the decision.

begin insert

(b) No officer, employee, or agent of the commission that is
assigned to assist in the prosecution of, or to testify in, an
adjudication case, shall participate in the decision of the case, or
in the decision of any factually related proceeding, including
participation in or advising the commission as to findings of fact,
conclusions of law, or orders. An officer, employee, or agent of
the commission that is assigned to assist in the prosecution of an
adjudication case may participate in reaching a settlement of the
case, but shall not participate in the decision of the commission
to accept or reject the settlement, except as a witness or counsel
in an open hearing or a hearing closed pursuant to subdivision
(d). The Legislature finds that the commission performs both
prosecutorial and adjudicatory functions in an adjudication case
and declares its intent that an officer, employee, or agent of the
commission may perform only one of those functions in any
adjudication case, or factually related proceeding.

end insert begin delete

(b)

end delete

begin insert (c) end insert  Ex parte communications shall be prohibited in adjudication
cases.

begin delete

(c)

end delete

begin insert (d) end insert  Notwithstanding any other provision of law, the commission
may meet in a closed hearing to consider the decision that is being
appealed. The vote on the appeal shall be in a public meeting and
shall be accompanied with an explanation of the appeal decision.

begin delete

(d)

end delete

begin insert (e) end insert  Adjudication cases shall be resolved within 12 months of
initiation unless the commission makes findings why that deadline
cannot be met and issues an order extending that deadline. In the
event that a rehearing of an adjudication case is granted the parties
shall have an opportunity for final oral argument.

begin delete

(e)

end delete

begin insert (f) end insert  (1) The commission may determine that the respondent
lacks, or may lack, the ability to pay potential penalties or fines
or to pay restitution that may be ordered by the commission.

(2) If the commission determines that a respondent lacks, or
may lack, the ability to pay, the commission may order the
respondent to demonstrate, to the satisfaction of the commission,
sufficient ability to pay potential penalties, fines, or restitution that
may be ordered by the commission. The respondent shall
demonstrate the ability to pay, or make other financial
arrangements satisfactory to the commission, within seven days
of the commission commencing an adjudication case. The
commission may delegate to the attorney to the commission the
determination of whether a sufficient showing has been made by
the respondent of an ability to pay.

(3) Within seven days of the commission’s determination of the
respondent’s ability to pay potential penalties, fines, or restitution,
the respondent shall be entitled to an impartial review by an
administrative law judge, of the sufficiency of the showing made
by the respondent of the respondent’s ability to pay. The review
by an administrative law judge of the ability of the respondent to
pay shall become part of the record of the adjudication and is
subject to the commission’s consideration in its order resolving
the adjudication case. The administrative law judge may enter
temporary orders modifying any financial requirement made of
the respondent pending the review by the administrative law judge.

(4) A respondent that is a public utility regulated under a
rate-of-return or rate-of-margin regulatory structure or that has
gross annual revenues of more than one hundred million dollars
($100,000,000) generated within California is presumed to be able
to pay potential penalties or fines or to pay restitution that may be
ordered by the commission, and, therefore, paragraphs (1) to (3),
inclusive, do not apply to that respondent.

SEC. 6.  

Section 1701.3 of the Public Utilities Code is amended
to read:

1701.3.  

(a) If the commission pursuant to Section 1701.1 has
determined that a ratesetting case requires a hearing, the procedures
prescribed by this section shall be applicable. The assigned
commissioner shall determine prior to the first hearing whether
the commissioner or the assigned administrative law judge shall
be designated as the principal hearing officer. The principal hearing
officer shall be present for more than one-half of the hearing days.
The decision of the principal hearing officer shall be the proposed
decision. An alternate decision may be issued by the assigned
commissioner or the assigned administrative law judge who is not
the principal hearing officer. The commission shall establish a
procedure for any party to request the presence of a commissioner
at a hearing. The assigned commissioner shall be present at the
closing arguments of the case. The principal hearing officer shall
present the proposed decision to the full commission in a public
meeting. The alternate decision, if any, shall also be presented to
the full commission at that public meeting. The alternate decision
shall be filed with the commission and shall be served on all parties
simultaneously with the proposed decision.

The presentation to the full commission shall contain a record
of the number of days of the hearing, the number of days that each
commissioner was present, and whether the decision was completed
on time.

(b) The commission shall provide by begin delete regulation end delete begin insert rule end insert for
peremptory challenges and challenges for cause of the
administrative law judge begin insert or the assigned commissioner end insert . Challenges
for cause shall include, but not be limited to, financial interests
and prejudice. All parties shall be entitled to unlimited peremptory
challenges in any case in which the administrative law judge begin insert or
assigned commissioner end insert has begin insert , end insert within the previous 12 months begin insert , end insert served
in any capacity in an advocacy position at the commission, been
employed by a regulated public utility, or has represented a party
or has been a party of interest in the case.

(c) Ex parte communications are prohibited in ratesetting cases.
However, oral ex parte communications may be permitted at any
time by any commissioner if all interested parties are invited and
given not less than three days’ notice. Written ex parte
communications may be permitted by any party provided that
copies of the communication are transmitted to all parties on the
same day. If an ex parte communication meeting is granted to any
party, all other parties shall also be granted individual ex parte
meetings of a substantially equal period of time and shall be sent
a notice of that authorization at the time that the request is granted.
In no event shall that notice be less than three days. The
commission may establish a period during which no oral or written
ex parte communications shall be permitted and may meet in closed
session during that period, which shall not in any circumstance
exceed 14 days. If the commission holds the decision, it may permit
ex parte communications during the first half of the interval
between the hold date and the date that the decision is calendared
for final decision. The commission may meet in closed session for
the second half of that interval.

(d) Any party has the right to present a final oral argument of
its case before the commission. Those requests shall be scheduled
in a timely manner. A quorum of the commission shall be present
for the final oral arguments.

(e) The commission may, in issuing its decision, adopt, modify,
or set aside the proposed decision or any part of the decision based
on evidence in the record. The final decision of the commission
shall be issued not later than 60 days after the issuance of the
proposed decision. Under extraordinary circumstances the
commission may extend this date for a reasonable period. The
60-day period shall be extended for 30 days if any alternate
decision is proposed pursuant to Section 311.