BILL ANALYSIS �
SB 611
Page 1
SENATE THIRD READING
SB 611 (Hill)
As Amended September 3, 2013
Majority vote
SENATE VOTE :38-0
UTILITIES & COMMERCE 14-1
APPROPRIATIONS 16-1
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|Ayes:|Bradford, Patterson, |Ayes:|Gatto, Harkey, Bigelow, |
| |Bonilla, Buchanan, Fong, | |Bocanegra, Bradford, Ian |
| |Beth Gaines, Garcia, | |Calderon, Campos, Eggman, |
| |Gorell, Roger Hern�ndez, | |Gomez, Hall, Holden, |
| |Jones, Quirk, Rendon, | |Linder, Pan, Quirk, |
| |Skinner, Williams | |Wagner, Weber |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Ch�vez |Nays:|Donnelly |
| | | | |
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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 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 PUC's lead
attorney, among other things.
5)States that only the Supreme Court and court of appeals have
jurisdiction to act upon any order or decision of PUC
according to the laws and rules of the court.
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FISCAL EFFECT : According to Assembly Appropriations Committee,
increased ongoing costs of approximately $360,000 from PUC
Utilities Reimbursement Account (special fund) for legal staff
to respond to requests for Judicial Review. Unknown costs
associated with changing the name on office letterhead, etc.
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 PUC continues to maintain the
self-serving proposition that ORA does not have the authority,
since ORA is a part of 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 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 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."
Background : DRA is an independent division within PUC that
advocates solely on behalf of residential and small commercial
utility ratepayers. In 1984, PUC created DRA, formerly known as
the "Public Staff Division," in a reorganization plan to more
efficiently use staff resources. In 1996, SB 960 (Leonard),
Chapter 856, Statutes of 1996, renamed the Division the "Office
of Ratepayer Advocates" (ORA), and while keeping the ratepayer
advocacy function within PUC for mutually beneficial purposes,
made it independent with respect to policy, advocacy, and
budget. SB 960 made DRA Director a gubernatorial appointee
subject to Senate confirmation. In 1997, 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
SB 611
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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 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."
Recent audit findings : A recent Department of Finance (Office
of Statewide Audits and
Evaluations (OSAE)) 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 DRA budget
and submit it to 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 PUC. Rather, PUC
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Budget Office prepares and approves DRA's budget for them. The
audit found that this process does not follow the law and lacks
transparency. This bill requires the director to develop an
annual budget to be approved by the Department of Finance.
Additionally, this bill 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 PUC's lead
attorney.
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 PUC.
This is a right that all parties, including the utilities, and
ratepayer advocacy groups have in cases before 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."
Analysis Prepared by : DaVina Flemings / U. & C. / (916)
319-2083
FN: 0002269