BILL ANALYSIS Ó
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ASSEMBLY THIRD READING
ACA
11 (Gatto, et al.)
As Amended May 27, 2016
2/3 vote
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|Committee |Votes|Ayes |Noes |
| | | | |
| | | | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Utilities |12-1 |Gatto, Burke, Dahle, |Chávez |
| | |Eggman, Cristina | |
| | |Garcia, | |
| | | | |
| | | | |
| | |Eduardo Garcia, | |
| | |Hadley, | |
| | | | |
| | | | |
| | |Roger Hernández, | |
| | |Obernolte, Quirk, | |
| | |Santiago, Williams | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Appropriations |20-0 |Gonzalez, Bigelow, | |
| | |Bloom, Bonilla, | |
| | |Bonta, Calderon, | |
| | |Chang, Daly, Eggman, | |
| | |Gallagher, Eduardo | |
| | |Garcia, Roger | |
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| | |Hernández, Holden, | |
| | |Jones, Obernolte, | |
| | |Quirk, Santiago, | |
| | |Wagner, Weber, Wood | |
| | | | |
| | | | |
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SUMMARY: Authorizes the Legislature to reallocate or reassign
all or a portion of the functions of the California Public
Utilities Commission (CPUC) 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 CPUC 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
constitutional provisions.
2)Authorizes the Legislature to reallocate or reassign all or a
portion of the functions of the CPUC 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 CPUC to: 1)
focus its regulatory efforts on safety, reliability, and
ratesetting; and 2) implement statutorily authorized programs
for reducing emissions of greenhouse gases.
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4)Requires a two-thirds vote of the Legislature and approval of
the voters in a statewide election.
FISCAL EFFECT: According to the Assembly Appropriations
Committee:
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 CPUC to other
state entities.
COMMENTS:
1)Purpose: According to the author, the 21st century no longer
requires the CPUC 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 CPUC's constitutional protections. This bill
further directs the Legislature to reform and modernize the
CPUC.
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.
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The CPUC is comprised of five Commissioners appointed by the
Governor and confirmed by the Senate Rules Committee for six
year terms.
The CPUC's status as a Constitutionally-authorized agency is
somewhat unique and has empowered the CPUC to enact and
enforce policies and programs it finds cognate germane.
Limitations on the CPUC's broad authority are those that have
been enacted by statute.
3)Problems at the CPUC: According to the author, the CPUC'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 CPUC allowed
Southern California Edison (SCE) to keep unspent maintenance
funds and that the CPUC 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 both generators. In a meeting held in Warsaw,
Poland in March 2012 between then-CPUC President Peevey and an
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SCE executive outlined a settlement framework. In November
2014, the CPUC 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:
Sue Kateley / U. & C. / (916) 319-2083 FN:
0003235