BILL ANALYSIS Ó
Senate Appropriations Committee Fiscal Summary
Senator Kevin de León, Chair
SB 611 (Hill) - Public Utilities Commission: Division of
Ratepayer Advocates.
Amended: May 8, 2013 Policy Vote: EU&C 9-0
Urgency: No Mandate: No
Hearing Date: May 20, 2013 Consultant: Marie Liu
This bill meets the criteria for referral to the Suspense File.
Bill Summary: SB 611 would change the Division of Ratepayer
Advocates (DRA) within the California Public Utilities
Commission (CPUC) to a stand-alone Office of Ratepayer Advocates
(ORA). The ORA would be authorized to seek rehearing and
judicial review of commission decisions, required to have a
budget approved by the Department of Finance, and authorized to
have staff sufficient to represent customer and subscriber
interests sufficiently.
Fiscal Impact:
Ongoing costs of approximately $290,000 annually from the
Public Utilities Commission Utilities Reimbursement Account
(special fund) for legal staff to provide ORA with the same
information as a commissioner.
Ongoing costs of approximately $360,000 from the Public
Utilities Commission Utilities Reimbursement Account (special
fund) for legal staff to respond to ORA requests for judicial
review.
Unknown increased costs for equipment, services,
administration, due to loss economies of scale.
Background: The DRA is an independent division within the CPUC
that advocates solely on behalf of residential and small
commercial utility ratepayers. First established in 1984, and
later codified in 1996, the statutory goal of DRA is "to obtain
the lowest possible rate for service consistent with reliable
and safe service levels." DRA advocates for consumers in
industry-wide proceedings, individual rate cases, and before the
Legislature.
DRA's staff consists of 137 technical, policy, and financial
analysts with professional backgrounds as engineers, auditors,
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and economists with expertise in regulatory issues related to
electricity, natural gas, telecommunications, and water
industries in California. DRA has a separate budget account
controlled by the director but subject to final approval of the
CPUC. DRA has a lead attorney appointed by the director, with
other staff attorneys assigned by the CPUC's general counsel
from the CPUC's Legal Division. Currently, attorneys are
assigned on a case-by-case basis, although prior practice
included Legal Division attorneys assigned to DRA on long-term
basis.
On January 10, 2013, the Department of Finance (DOF) Office of
State Audits and Evaluations released its performance audit of
the CPUC budget process. The audit identified CPUC noncompliance
with statutory requirements specific to DRA's budget. The DOF
report stated that, "with minimal input from DRA, the CPUC
Budget Office prepares and communicates the budget to DRA and
Finance. However, this process has lacked transparency and CPUC
has not been able to explain or support to DRA's satisfaction
how the various budgeted cost categories were determined. As a
result, DRA is not able to adequately explain or defend its own
budget."
Proposed Law: This bill would establish the ORA outside of the
CPUC. The ORA would be authorized to seek rehearing and judicial
review of commission decisions and would have access to the same
information provided to the CPUC. The ORA would have its own
staff separate from the CPUC, including legal staff, and its
budget would be approved by the DOF.
Staff Comments: This bill would make the DRA a separate entity
from the CPUC while trying to retain DRA's access to CPUC
information as an inside entity. Existing law does require the
CPUC to disclose any information that the DRA deems necessary to
provide its duties (PUC §309.5(e)) however, this bill further
specifies that the CPUC would have to give the ORA the same
information that is available to commissioners, including
confidential or privileged information. This provision would
arguably make the ORA privy to documents that no other outside
entity is entitled to. Thus, CPUC may have legal costs to comply
with this provision. The CPUC estimates that information
provision of the bill will necessitate two attorneys at a cost
of approximately $290,000 annually.
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This bill would allow the ORA to seek judicial review of the
CPUC's decisions. The CPUC believes that this ability would
necessitate an increase in workload for their legal division at
an annual approximate cost of $360,000.
DRA's current budget is approximately $23 million. As noted by
the DOF audit, it is unclear whether the existing budget is
accurately reflective of the future needs of the ORA. Assuming
that its current budget is appropriate, it currently accounts
for DRA's share of shared resources with the CPUC such as rent,
administrative overhead and legal staff. Should these two
entities be separated, ORA may lose some economies of scale in
procuring these services, therefore perhaps increasing the cost.
However, the extent to which these costs may change is unknown
and speculative.