BILL ANALYSIS Ó
SB 636
Page A
Date of Hearing: June 9, 2014
ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
Steven Bradford, Chair
SB 636 (Hill) - As Amended: January 15, 2014
SENATE VOTE : 33-0
SUBJECT : Public Utilities Commission: proceedings.
SUMMARY : Establishes certain procedures that apply to
adjudication, rulemaking, and
ratesetting cases of the California Public Utilities Commission
(PUC). Specifically, this bill :
1)Prohibits an employee, officer, or agent of the PUC that is
personally involved in the
prosecution or in the supervision of the prosecution of an
adjudication case from
participating in the decision of the case or in the decision
of any factually related proceeding.
2)Permits an employee, officer, or agent of the PUC that is
personally involved in the
prosecution or in the supervision of 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 PUC to accept or reject
the settlement, except as a witness
or counsel in an open hearing or a specified closed hearing.
EXISTING LAW
1) Establishes the PUC with five members appointed by the
Governor and approved by the
Senate for staggered six-year terms and grants the PUC
authority to regulate public utilities
subject to control by the Legislature. (California
Constitution Article XII, Sections I and III)
2) Requires the Governor to designate one of the commissioners
as president to preside at PUC
meetings and authorized to direct and prescribe duties of an
attorney (general counsel),
executive director, and other staff. (Public Utilities Code
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305)
3) Authorizes the PUC to appoint a general counsel to represent
the PUC in all actions, to
commence, prosecute or intervene in proceedings as directed
by the president, to advise the
commission and each commissioner on all matters, and to
perform all duties that the
president or a vote of the commission may require. (Public
Utilities Code 307)
4) Requires that, in those agencies subject to the California
Administrative Procedures Act
(APA), the adjudicative function shall be separated from the
investigative, prosecutorial, and advocacy functions within
the agency. (Government Code 11425.10)
5) Exempts the PUC from the Administrative Procedures Act.
(Public Utilities Code 1701)
FISCAL EFFECT : Unknown
COMMENTS : According to the author, "this bill is necessary to
codify the requirement to
separate advocacy and advisory functions at the CPUC because the
CPUC's current policy
requiring separation is not binding and can be waived at the
discretion of the general counsel and
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executive director." The author explains two incidents which
occurred at the PUC involving the
general counsel serving both as advisor to the commissioners and
directing the prosecuting
attorneys to take specified actions in the PUC's penalty
proceeding against Pacific Gas &
Electric Company for the San Bruno gas pipeline explosion.
1) Background : The principle of separation of functions is
applied to administrative agencies
that engage in quasi-judicial or adjudicative actions, and the
application is necessary to
preserve the due process rights of parties, just as in a court
of law. In administrative
adjudication, if the judge and the prosecutor are housed in
the same agency and under the
director of the same administrators, certain procedures must
be in place.
Due process is the principle articulated in the Fifth
Amendment to the U.S. Constitution as
the requirement that no person "be deprived of life, liberty,
or property, without due process
of law." The Fourteenth Amendment extends this principle to
state government. Article XII
of the California Constitution gives the PUC broad authority
to establish its own procedures
subject to statute and due process.<1>
The Federal Administrative Procedures Act (APA) defines two
procedural models:
rulemaking and adjudication. In rulemaking, the rights of an
individual are not the subject of
inquiry, and due process considerations do not apply. The
Federal APA addresses separation
of adjudicatory and prosecutorial functions in §554 (d):
An employee or agent engaged in the performance of
investigative or prosecuting
functions for an agency in a case may not, in that or a
factually related case,
participate or advise in the decision, recommended
decision, or agency review
pursuant to section 557 of this title, except as witness or
counsel in public
-------------------------
<1> California Constitution, Article XII, Section 2
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proceedings.
The Federal Energy Regulatory Commission (FERC) - the PUC's
federal counterpart - has
adopted regulations on separation of functions:
In any proceeding in which Commission adjudication is made
after hearing, or in any
proceeding arising from an investigation under part 1b of
this chapter, [rules relating
to FERC investigations] beginning from the time the
Commission initiates a
proceeding governed by part 385 of this chapter, [FERC
rules of practice and
procedure]no officer, employee, or agent assigned to work
upon the proceeding or to
assist in the trial thereof, in that or any factually
related proceeding, shall participate
or advise as to the findings, conclusion or decision,
except as a witness or counsel in
public proceedings.<2>
The provisions call for an "ethical wall" between staff that
advise decision makers and staff
that prosecute.
The California Office of Administrative Law (OAL) ensures that
agency regulations are
clear, necessary, legally valid, and available to the public.
OAL is responsible for reviewing
administrative regulations proposed by over 200 state agencies
for compliance with the
standards set forth in California's Administrative Procedure
Act (APA), for transmitting these
regulations to the Secretary of State and for publishing
regulations in the California Code of
Regulations. The PUC, however, is not subject to the
California APA.
2) Drawing a bright line between functions : This bill harmonizes
PUC practice with established
practice at state agencies subject to the California APA by
--------------------------
<2> Code of Federal Regulations, Title 18, Part 385, Section
2202 (18 CFR 385.2202)
http://www.law.cornell.edu/cfr/text/18/385.2202
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making separation of PUC
advocacy and advisory functions mandatory. Current law
requires the Office of Ratepayer
Advocates to adhere to separations of functions but not to PUC
attorneys or the general
counsel.
The bill prohibits an advisory role for any PUC "officer,
employee, or agent of the PUC that
is assigned to assist in the prosecution of, to testify in, or
to supervise the prosecution of an
adjudication case."
Finally, the bill prohibits any employee who prosecutes a
case, or "supervises" the
prosecution of a case from advising the PUC on that case or
factually related proceeding.
3) Technical amendment : The phrase "any factually related
proceeding" refers solely to an
adjudicatory proceeding, therefore the author and this
committee may wish to make a
clarifying amendment by changing it to "any factually related
adjudicatory proceeding."
1701.2 (b) Notwithstanding Section 307, an officer, employee,
or agent of the commission
that is personally involved in the prosecution or in the
supervision of the prosecution of an
adjudication case before the commission shall not participate
in the decision of the case, or
in the decision of any factually related adjudicatory
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 personally
involved in the prosecution or in the
supervision of 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
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case and declares its intent that
an officer, employee, or agent of the commission, including
its attorneys, may perform only
one of those functions in any adjudication case or factually
related adjudicatory proceeding.
4) Related legislation : SB 611 (Hill, 2013), required PUC
separation of advocacy and advisory
functions, modified power of PUC president, gave ORA
independent structure and budget
process, and made other changes to PUC authority. The bill was
amended in the Assembly
with unrelated provisions.
REGISTERED SUPPORT / OPPOSITION :
Support
None on file.
Opposition
None on file.
Analysis Prepared by : DaVina Flemings / U. & C. / (916)
319-2083