BILL ANALYSIS Ó
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Date of Hearing: May 18, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
ACA
11 (Gatto) - As Introduced March 9, 2016
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|Policy |Utilities and Commerce |Vote:|12 - 1 |
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Urgency: No State Mandated Local Program: NoReimbursable: No
SUMMARY:
This constitutional amendment authorizes the Legislature to
reallocate or reassign all or a portion of the functions of the
California Public Utilities Commission (PUC) to other state
agencies, departments, boards, or other entities, consistent
with specified purposes. Specifically, this constitutional
amendment:
1)Repeals the provisions of the California Constitution
pertaining to the PUC effective January 1, 2019. Specifies
that a statute that was valid at the time the statute was
enacted is not invalid by virtue of the repeal of those
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constitutional provisions.
2)Authorizes the Legislature to reallocate or reassign all or a
portion of the functions of the PUC to other state agencies,
departments, boards, or other entities, in furtherance of
consumer protection, public health, environmental protection,
increased transparency, public access, and preserving the
ability of third parties to advocate or intervene.
3)Directs the Legislature to adopt appropriate structures to
provide greater accountability for the public utilities of the
state and provide the necessary guidance to the PUC to: 1)
focus its regulatory efforts on safety, reliability, and
ratesetting; and 2) implement statutorily authorized programs
for reducing emissions of greenhouse gases.
4)Requires a 2/3 vote of the Legislature and approval of the
voters in a statewide election.
FISCAL EFFECT:
1)One-time General Fund costs of around $220,000 to include the
text and analysis of the constitutional and arguments for and
against the measure in the statewide voter information guide.
2)Unknown potential costs or savings resulting from any future
legislative actions to provide more accountability and
reorganize or reassign the functions of the PUC to other state
entities.
COMMENTS:
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1)Purpose. According to the author, the 21st century no longer
requires the PUC to be enshrined in the California
Constitution. This measure will place before the voters an
initiative to strike Article 12 from the Constitution, thereby
removing the PUC's constitutional protections. This bill
further directs the Legislature to reform and modernize the
PUC
2)Background. In 1911, the voters established the Railroad
Commission in the California Constitution. In 1912, the
Legislature passed the Public Utilities Act, expanding the
Railroad Commission's regulatory authority to include natural
gas, electric, telephone, and water companies, in addition to
railroads and marine transportation companies. In 1946, it
was renamed the California Public Utilities Commission.
The PUC is comprised of five Commissioners appointed by the
Governor and confirmed by the Senate Rules Committee for six
year terms.
The PUC's status as a Constitutionally-authorized agency is
somewhat unique and has empowered the PUC to enact and enforce
policies and programs it finds cognate germane. Limitations
on the PUC's broad authority are those that have been enacted
by statute.
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3)Problems at the PUC. According to the author, the PUC's
ability to regulate wide-ranging and diverse industries - from
electric and natural gas companies to limousines and
transportation network companies - has been called into
question. The author provides numerous examples to
substantiate this view.
Following the 2010 explosion of a Pacific Gas and Electric gas
line that resulted in numerous injuries and deaths in San
Bruno, an independent study found the CPUC had not been
adequately overseeing gas pipeline safety.
In December 2011, nearly 500,000 Californians experienced
widespread power outages of up to six days in the Los Angeles
region due to windstorms. The Assembly Utilities and Commerce
Committee's investigation revealed that the PUC allowed
Southern California Edison (SCE) to keep unspent maintenance
funds and that the PUC did not check to make sure that the
maintenance work was performed.
In January 2012, a leak of contaminated steam was detected at
one of the two new replacement generators at the San Onofre
Nuclear Power Station (SONGS). In June 2013, SCE decided to
permanently shut down SONGS as a result of design flaws
affecting the both generators. In a meeting held in Warsaw,
Poland in March 2012 between then-PUC President Peevey and an
SCE executive outlined a settlement framework. In November
2014, the PUC allocated three quarters of the cost of the
SONGS generators to be paid by ratepayers without review of
the expenses for the steam generator replacement projects.
Analysis Prepared by:Jennifer Galehouse / APPR. / (916)
319-2081
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