BILL ANALYSIS �
SB 611
Page 1
Date of Hearing: June 24, 2013
ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
Steven Bradford, Chair
SB 611 (Hill) - As Amended: June 14, 2013
SENATE VOTE : 38-0
SUBJECT : Public Utilities Commission: Division of Ratepayer
Advocates
SUMMARY : Renames the Division of Ratepayer Advocates (DRA) the
Office of Ratepayer Advocates (Office) and authorizes the Office
to seek rehearing and judicial review of California Public
Utilities Commission (PUC) among other things. Specifically,
this bill :
1)Renames the Division of Ratepayer Advocates (DRA) the Office
of Ratepayer Advocates (Office).
2)Specifies the Office to may seek rehearing and judicial review
of PUC decisions.
3)Requires the director of the Office to develop a budget for
the Office for final approval by the Department of Finance.
4)Requires the lead attorney to obtain adequate legal personnel
for the work to be conducted by the Office from the PUC's lead
attorney, among other things.
EXISTING LAW :
1)The California Constitution states that the Legislature has
plenary authority to establish the manner and scope of review
of PUC action in a court of record. (Article XII, Section 5)
2)Permits, after a decision has been adopted, any party to a
proceeding or any person with a financial interest in the
public utility affected by the decision may, within 30 days,
apply for a rehearing of the case. (Public Utilities Code
�1731 (b)(1))
3)Permits an aggrieved party to a decision to petition for a
writ of review in the court of appeal or the Supreme Court
within 30 days of the PUC's denying an application for
rehearing. (Public Utilities Code �1756)
4)Permits an aggrieved party to a decision to petition for a
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writ of review in the court of appeal or the Supreme Court
within 30 days of a PUC decision following the grant of an
application for rehearing. (Public Utilities Code �1756)
5)States Director of DRA shall be appointed by, and serve at the
pleasure of the Governor, subject to confirmation by the
Senate. (Public Utilities Code �309.5(b))
6)Requires the Director of DRA to submit an annual budget to the
PUC for final approval. (Public Utilities Code �309.5(b))
7)Requires the Director of DRA to annually appear before the
appropriate policy committees of the Assembly and the Senate
to report on the activities of the division. (Public Utilities
Code �309.5(b))
FISCAL EFFECT : Unknown.
COMMENTS : According to the author, "the Office of Ratepayer
Advocates needs the Legislature to clearly state that it has the
right to petition the court of appeals to review a PUC decision.
The reason for that is the PUC continues to maintain the
self-serving proposition that ORA does not have the authority,
since ORA is a part of the CPUC and therefore can't challenge
itself. While this position does not appear to be accurate,
appeals courts have discretion in whether or not to review PUC
decisions when asked, and uncertainly as to ORA's standing may
disincline a court of appeal from taking up such a case. Also,
as ORA depends on the PUC to supply it with lawyers, lack of
standing may give the PUC an excuse to not to give ORA legal
resources for an appeals case. DRA is legislatively mandated to
advocate for consumers before the PUC. Sometimes they are the
only consumer advocate. If DRA doesn't have the ability to
appeal, then the commission can issue a decision without regard
to the decision's legality. This is a real concern given the
"creative" legal opinions the PUC has developed in recent years,
many of which have been at odds with our own Legislative
Counsel."
1)Background : The Division of Ratepayer Advocates (DRA) is an
independent division within
the PUC that advocates solely on behalf of residential and small
commercial utility ratepayers. In 1984, the CPUC created DRA,
formerly known as the "Public Staff Division," in a
reorganization plan to more efficiently use staff resources. In
1996, SB 960 (Chapter 856, Statutes of 1996) renamed the
Division the "Office of Ratepayer Advocates" (ORA), and while
keeping the ratepayer advocacy function within the PUC for
mutually beneficial purposes, made it independent with respect
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to policy, advocacy, and budget. SB 960 made the DRA Director a
gubernatorial appointee subject to Senate confirmation. In 1997,
the PUC implemented its reorganization plan, "Vision 2000,"
which significantly diminished the staff of ORA, but the
ratepayer advocacy responsibilities and workload remained the
same. In 2005, SB 608 Escutia (Chapter 440, Statutes of 2005)
renamed ORA as DRA - the Division of Ratepayer Advocates - and
strengthened the division by providing it with autonomy over its
budget and staffing resources and authorizing the appointment of
a full-time Chief Counsel.
DRA has 137 technical staff with expertise in regulatory issues
related to the electricity, natural gas, water, and
telecommunications industries in California. DRA's staff of
experts performs detailed review and analyses of regulatory
policy issues and utility proposals for funding that total in
the tens of billions of dollars. DRA determines whether utility
requests are in the interest of the ratepayers who fund utility
activities through their utility bills. DRA also supports
environmental policies that may benefit customers and seeks to
ensure that utility actions comport with PUC rules and
California environmental laws and policy goals.
DRA's 2012 Annual Report to the Legislature notes that: "DRA
participated in 176 CPUC proceedings and filed more than 600
pleadings to aid the PUC in developing the record from which
Commissioners formulated their final decisions. DRA lobbied
decision-makers on behalf of ratepayers nearly 250 times in 2012
to ensure that the consumer perspective was heard. DRA's
$27,535,000 budget represents a small fraction of ratepayer's
investment compared with the nearly $4 billion in savings DRA's
work was instrumental in achieving for Californians in the form
of lower utility rates and avoided rate increases. For every
dollar customers spent on DRA in 2012, they saved approximately
$153 across their utility bills."
2)Recent audit findings : A recent Department of Finance (Office
of Statewide Audits and
Evaluations) audit found "widespread weaknesses within PUC's
budget operations which compromise its ability to prepare and
present reliable and accurate budget information." The audit
revealed: ineffective management over budgeting functions;
budget forecasting methodologies and monitoring need
improvement; fiscal management practices need improvement; and
non-compliance with statutory requirements specified to the
Division of Ratepayer Advocates.
Current law requires the DRA's director to develop the DRA
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budget and submit it to the PUC for final approval. However,
OSAE found that DRA does not prepare its own budget, nor is it
reviewed and approved by the director of DRA or approved by the
PUC. Rather, the PUC Budget Office prepares and approves DRA's
budget for them. The audit found that this process does not
follow the law and lacks transparency. SB 611 requires the
director to develop an annual budget to be approved by the
Department of Finance.
Additionally, SB 611 clarifies that the director may appoint a
lead attorney to represent DRA and obtain adequate legal
personnel for the work to be conducted by DRA from the PUC's
lead attorney.
3)Need for judicial review : This bill clarifies that DRA may
seek judicial review of PUC
decisions, just like any other party to a proceeding at the PUC.
This is a right that all parties, including the utilities, and
ratepayer advocacy groups have in cases before the PUC. Absent
this right, DRA and the ratepayers it represents could be at a
disadvantage in advocating before the PUC. Furthermore,
ratepayers would bear the costs of funding intervenor
compensation for other outside ratepayer advocacy groups that
seek judicial review.
Existing law permits an aggrieved party to ask an appellate
court to review a PUC decision. According to DRA: "this bill
would clarify DRA's ability to petition for a writ of review.
DRA is funded for legal resources and this clarification will
not increase costs."
In the interest of the ratepayers and promoting transparency and
accountability, this committee may wish to make an amendment
that requires DRA to include it its Annual Report before the
Legislature the number of cases, the amount of ratepayer funds
spent, and rationale for which it sought judicial review of PUC
decisions .
4)2013-14 budget trailer bills : This bill is substantially
similar to AB 77 (Budget Act of 2013:
Public Resources) which makes changes to DRA's structure. AB 77
is awaiting a vote in the Assembly.
REGISTERED SUPPORT / OPPOSITION :
Support
Division of Ratepayer Advocates (DRA)
SB 611
Page 5
The Utility Reform Network (TURN)
Opposition
None on file.
Analysis Prepared by : DaVina Flemings / U. & C. / (916)
319-2083