California Legislature—2015–16 Regular Session

Assembly Constitutional Amendment No. 11

Introduced by Assembly Members Gatto, Levine, and Wilk

(Principal coauthors: Assembly Members Dababneh and Roger Hernández)

(Coauthors: Assembly Members Bigelow, Brough, and Dahle)

March 9, 2016

Assembly Constitutional Amendment No. 11—A resolution to propose to the people of the State of California an amendment to the Constitution of the State, by adding Section 10 to Article XII thereof, and by repealing and adding Article XII thereof, relating to public utilities.

LEGISLATIVE COUNSEL’S DIGEST

ACA 11, as introduced, Gatto. Public Utilities Commission.

The California Constitution establishes the Public Utilities Commission, with jurisdiction over all public utilities. The California Constitution grants the commission certain general powers over all public utilities, subject to control by the Legislature, and, among other things, authorizes the Legislature, unlimited by the other provisions of the Constitution, to confer additional authority and jurisdiction upon the commission that is cognate and germane to the regulation of public utilities, to establish the manner and scope of review of commission action in a court of record, and to enable the commission to fix just compensation for utility property taken by eminent domain. The Public Utilities Act and other provisions of the Public Utilities Code set forth the structure, funding, and responsibilities of the commission.

This measure would authorize the Legislature to reallocate or reassign all or a portion of the functions of the commission to other state agencies, departments, boards, or other entities, consistent with specified purposes. The measure would direct the Legislature to adopt appropriate structures to provide greater accountability for the public utilities of the state and provide the necessary guidance to the commission to focus its regulatory efforts on safety, reliability, and ratesetting and to implement statutorily authorized programs for reducing emissions of greenhouse gases.

This measure would repeal the provisions of the California Constitution pertaining to the commission effective January 1, 2019, while specifying that a statute that was valid at the time the statute was enacted is not invalid by virtue of the repeal of those constitutional provisions.

Vote: ²⁄₃. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

WHEREAS, The 21st century has brought about many changes
to technology and to the delivery of services and necessities that
were unforeseeable in 1911 when the “Railroad Commission” was
enshrined in the California Constitution; and

WHEREAS, The 1946 constitutional amendment that renamed
the Railroad Commission as the Public Utilities Commission, and
gave it added authority over our natural gas, electrical, telephone,
and water companies, was also the product of a different era, when
these utilities and common carriers were grouped together in the
hopes that one regulatory body could best regulate services used
by the public on a daily basis; and

WHEREAS, The commission has taken the position that its
authority can only be expanded, which has resulted in an
ever-growing bureaucracy that now has jurisdiction over not only
gas, electrical, telecommunications, water utilities, and railroads,
but also hot-air balloons, moving companies, and ride-sharing
applications; and

WHEREAS, In the over one hundred years since its
establishment, the industries under the oversight of the commission
have grown and evolved in ways that have rendered the current
structure of the commission inefficient and obsolete, leaving
Californians without the oversight and regulatory protections that
we need, particularly in matters involving workforce and public
safety; and

WHEREAS, Recent events have caused grave concern around
our state and have highlighted the ineffectiveness of the current
system, specifically, in the Bay Area, the tragic San Bruno pipeline
explosion, which took many lives; in the Central Valley and
Sacramento, the significant concerns about the oil trains that
traverse those regions; in San Diego and Orange County, the
serious concerns about San Onofre and nuclear waste storage; and
in Los Angeles County, the fact that thousands of residents had to
flee their homes because of a gas leak of unprecedented size, which
greatly polluted our state’s air and caused many to worry about
the efficacy of the safety and inspection programs designed to stop
catastrophes like it; and

WHEREAS, Despite these failures to protect the public, our
electrical, gas, water, and telephone rates have continued to rise;
and

WHEREAS, The commission has also suffered from ethical
lapses, notably the failure to report ex parte communications, and
the closeness of commission personnel to the entities they are
supposed to regulate; and

WHEREAS, The people of California would be better served
with more nimble, focused, and specialized regulators, whose
actions would result in far greater accountability; and

WHEREAS, The Legislature should be forced to rethink the
manner in which utilities, common carriers, and other related
entities are regulated, and to create new structures that would
enable regulators to focus on safety, reliability, and affordability
of essential services, consumer protections for nonessential
services, and protecting and preserving our environment; now,
therefore, be it

Resolved by the Assembly, the Senate concurring, That the
Legislature of the State of California at its 2015-16 Regular
Session commencing on the first day of December 2014, two-thirds
of the membership of each house concurring, hereby proposes to
the people of the State of California that the Constitution of the
State be amended as follows:

First--  

This measure shall be known and may be cited as the
Public Utility Reform Act of 2016.

Second--  

That Section 10 is added to Article XII thereof, to
read:

SEC. 10.  

(a) (1) Notwithstanding Section 4, after the date the
measure adding this section is enacted, the Legislature has the
power and authority to reallocate or reassign all or a portion of the
functions of the Public Utilities Commission to other state agencies,
departments, boards, or other entities it may create.

(2) The Legislature’s reallocation or reassignment of these
functions shall be in furtherance of consumer protection, public
health, environmental protection, increased transparency, public
access, and preserving the ability of third parties to advocate for
and intervene on behalf of those that need their advocacy.

(b) The Legislature shall adopt appropriate structures to provide
greater accountability for the public utilities of this state and shall
provide the necessary guidance to focus regulatory efforts on
safety, reliability, and ratesetting and to implement statutorily
authorized programs for reducing emissions of greenhouse gases.

Third--  

That Article XII is repealed effective January 1, 2019.

Fourth--  

That Article XII is added thereto, effective January
1, 2019, to read:

 

ARTICLE XII
PUBLIC UTILITIES

 

SECTION 1.  

A statute that was valid at the time of its
enactment is not invalid by virtue of the repeal of the former Article
XII by the measure that added this article.