Amended in Senate July 8, 2015

Amended in Senate June 18, 2015

Amended in Assembly June 1, 2015

Amended in Assembly May 14, 2015

Amended in Assembly April 20, 2015

California Legislature—2015–16 Regular Session

Assembly Bill No. 825

Introduced by Assembly Members Rendon and Mark Stone

February 26, 2015

An act to amend Sections 306, 311.5, 314.5, 583, 1701.1, and 1701.2 of, to amend, renumber, and add Section 309.1 of, to add Sections 309.2 and 468 to, and to add Article 1.5 (commencing with Section 720) to Chapter 4 of Part 1 of Division 1 of, the Public Utilities Code, relating to the Public Utilities Commission.

LEGISLATIVE COUNSEL’S DIGEST

AB 825, as amended, Rendon. Public Utilities Commission.

(1) Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including electrical corporations, gas corporations, heat corporations, telegraph corporations, telephone corporations, and water corporations. Existing law requires the Governor to designate the president of the commission from among its members and requires the president to direct the executive director, the attorney, and other staff of the commission, except for the Office of Ratepayer Advocates. Existing law requires the commission to appoint an executive director who is responsible for the commission’s executive and administrative duties and to organize, coordinate, supervise, and direct the operations and affairs of the commission and expedite all matters within the commission’s jurisdiction. Existing law authorizes the executive director to employ those officers, administrative law judges, experts, engineers, statisticians, accountants, inspectors, clerks, and employees as the executive director deems necessary to carry out the provisions of the Public Utilities Act or to perform the duties and exercise the powers conferred upon the commission by law.

This bill would prohibit the commission from reassigning any staff member from a duty or activity authorized by statute to another duty or activity unless the Legislature has authorized personnel for that duty or activity. The bill would require the commission’s internal auditor to report directly to the commission.

(2) The Public Utilities Act provides that the office of the commission be in the City and County of San Francisco, that the office always be open, legal holidays and nonjudicial days excepted, that the commission hold its sessions at least once in each calendar month in the City and County of San Francisco, and authorizes the commission to also meet at those other times and places as may be expedient and necessary for the proper performance of its duties. The Public Utilities Act requires that meetings of the commission be open and public in accordance with the provisions of a specified state open meeting law.

This bill would require that each commissioner hold office hours and be available to meet with members of the public at least once a month in San Francisco or Los Angeles.

(3) The California Constitution authorizes the commission to establish rules, examine records, and prescribe a uniform system of accounts for all public utilities. The Public Utilities Act requires the commission to inspect and audit the books and records of electrical corporations, gas corporations, heat corporations, telegraph corporations, telephone corporations, and water corporations for regulatory and tax purposes. An inspection and audit is required to be done at least every 3 years if the utility has over 1,000 customers and at least every 5 years if the utility has 1,000 or fewer customers. The act requires that reports of the inspections and audit and other pertinent information be furnished to the State Board of Equalization for use in the assessment of the public utilities.

This bill would delete the requirement that the reports of the inspections and audit and other pertinent information be furnished to the State Board of Equalization for use in the assessment of the public utilities and instead require that the inspections and audit and other pertinent information be posted on the commission’s Internet Web site.

(4) Existing law authorizes the commission to fix the rates and charges for every public utility and requires that those rates and charges be just and reasonable. Existing law, with certain exceptions, prohibits a public utility from changing any rate, except upon a showing before the commission and a finding by the commission that the new rate is justified. With certain exceptions, whenever any electrical, gas, heat, telephone, water, or sewer system corporation files an application to change any rate for the services or commodities furnished by it, existing law requires that the corporation furnish its customers notice of its application to the commission for approval of the new rate. This notice requirement does not apply to any rate change proposed by a corporation pursuant to an advice letter submitted to the commission filed pursuant to commission-established procedures for advice letters.

This bill would require each public utility that submits an application to change its rates to include in its application a summary of the application that can be understood by the utility’s ratepayers. The bill would require that this summary and the application be posted on the commission’s Internet Web site and, if the utility has an Internet Web site, to be posted on the utility’s Internet Web site. Each public utility that maintains an Internet Web site would additionally be required to include on that site contact information for a utility official who can discuss the nature of the rate application.

(5) Every public utility is required by existing law to furnish such reports as the commission may require. No information furnished to the commission by a public utility, except those matters specifically required to be open to public inspection, are open to public inspection or made public except by order of the commission or a commissioner in the course of a hearing or proceeding. Any present or former officer or employee of the commission who divulges any information in violation of these provisions is guilty of a misdemeanor.

This bill would provide that if in a proceeding before the commission, a public utility, or subsidiary, affiliate, or holding company, begin delete seeks to file end delete begin insert files end insert a pleading, report, or other document with the commission that begin delete preserves the confidentiality of information contained therein, end delete begin insert is claimed to contain confidential information, end insert it would be required to begin insert concurrently end insert file a public version of the pleading, report, or other document begin insert with the commission end insert that contains sufficient information for any other party to the proceeding to understand the nature of its contents. The bill would authorize any party to the proceeding to file a motion to make public a pleading, report, or other document filed under a claim of confidentiality. The bill would require an administrative law judge assigned to the proceeding or the assigned commissioner to hold a hearing on the motion and determine whether the pleading, report, or other document should be made public. begin insert The bill would authorize any party to seek review of the ruling or order of the administrative law judge or assigned commissioner on the motion by filing a motion for rehearing de novo before the full commission within 30 days of the date the ruling or order on the motion was issued. end insert

(6) Existing law requires the commission to publish and maintain certain documents and information, including making available on the commission’s Internet Web site, the commission’s annual work plan, general orders, and Rules of Practice and Procedure, the proposed and alternate proposed decisions and resolutions, the agenda, agenda item documents, rulings of the commission, and adopted decisions and resolutions of the commission. Included in the materials that the commission is required to publish and maintain on its Internet Web site are docket cards that list by title and date of filing or issuance all documents filed and all decisions or rulings issued in those proceedings.

This bill would require that each document that the commission distributes to any service-of-process list be docketed and identified on the commission’s Internet Web site.

begin delete

(7) The Public Utilities Act requires that the commission include in its notice of meetings the agenda of business to be transacted at a meeting, and prohibits any item of business from being added to the agenda subsequent to the notice in the absence of an unforeseen emergency situation. The act additionally requires, prior to commencement of any meeting at which commissioners vote on items on the public agenda, that the commission make available to the public copies of the agenda, and upon request, any agenda item documents that are proposed to be considered by the commission for action or decision at a commission meeting.

end delete begin delete

This bill would require that the commission provide an opportunity for members of the public to comment on a specific agenda item during the time that the commission considers the item.

end delete begin delete

(8)

end delete

begin insert (7) end insert  Existing law requires the commission to establish an office of the public advisor and to appoint a public advisor. Existing law requires the office of the public advisor to assist members of the public and ratepayers who desire to testify before or present information to the commission in any hearing or proceeding of the commission.

This bill would add legislative findings and declarations relative to improving the transparency of commission regulatory activities. The bill would require the public advisor to be responsible for ensuring that the activities of the commission are transparent to the public consistent with these legislative findings and directions, the California Public Records Act, the Bagley-Keene Open Meeting Act, and other specified matter. The bill would require the public advisor to have independent responsibility for overseeing the commission’s Internet Web site and would require the commission to post on its Internet Web site a summary, as specified, of all electricity procurement contracts entered into by an electrical corporation during the previous 3 years, the expenses of which the commission has approved as being just and reasonable, a list of all proceedings involving public utilities then pending before the commission with information, in summary form, as to the amount of any rate increase being sought, both in cumulative amount and by unit or other means billed to ratepayers, transcripts and available summaries of documents, evidence, testimony and proceedings before the commission or its administration law judges that are not subject to confidentiality, a list of all requests submitted to the commission pursuant to the California Public Records Act, and all advice letters approved by the commission. The bill would require the public advisor to update, maintain, and post the commission’s service-of-process lists on the commission’s Internet Web site in an electronic form that may be used by any party to complete service of process. The bill would require the commission to open a proceeding to reexamine a specified decision relative to confidentiality of electric procurement begin delete data. end delete begin insert data and to modify the commission’s confidentiality practices and procedures consistent with specified requirements. end insert The bill would require the California State Auditor to appoint an inspector general for the commission who would be authorized to audit and investigate the commission’s activities and report any finding to the Legislature.

begin delete

(9)

end delete

begin insert (8) end insert  Existing law requires the commission to determine whether a proceeding requires a hearing and, if so, to determine whether the matter requires a quasi-legislative, an adjudication, or a ratesetting hearing. Upon initiating a hearing, the commission is required to assign one or more commissioners to oversee the case and an administrative law judge where appropriate. Existing law requires the assigned commissioner to schedule a prehearing conference and to issue, by order or ruling, a scoping memo that describes the issues to be considered and the applicable timetable for resolution.

This bill would require the assigned commissioner to convene an all-parties meeting as soon as practicable after the parties in a proceeding are known to discuss the substantive matter to be decided in the proceeding and prospects for resolving issues that would otherwise be litigated. The bill would require an assigned commissioner to attend all hearings in a proceeding.

begin delete

(10)

end delete

begin insert (9) end insert  Existing law prohibits 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 from participating in the decision of the case or in the decision of any factually related adjudicatory proceeding. Existing law permits 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 to participate in reaching a settlement of the case, but prohibits the officer, employee, or agent from participating in the decision of the commission to accept or reject the settlement, except as a witness or counsel in an open hearing or a specified closed hearing.

This bill would prohibit an attorney that is prosecuting a matter before the commission from meeting with any commissioner regarding the matter that the attorney is prosecuting unless all parties are present.

begin delete

(11)

end delete

begin insert (10) end insert  Under existing law, a violation of the Public Utilities Act or any order, decision, rule, direction, demand, or requirement of the commission is a crime.

Because certain provisions of this bill would be a part of the act and because a violation of an order or decision of the commission implementing its requirements would be a crime, the bill would impose a state-mandated local program by creating a new crime.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.

The people of the State of California do enact as follows:

SECTION 1.  

Section 306 of the Public Utilities Code is
amended to read:

306.  

(a) The office of the commission shall be in the City and
County of San Francisco. The office shall always be open, legal
holidays and nonjudicial days excepted. The commission shall
hold its sessions at least once in each calendar month in the City
and County of San Francisco. The commission may also meet at
such other times and in such other places as may be expedient and
necessary for the proper performance of its duties, and for that
purpose may rent quarters or offices.

(b) (1) The meetings of the commission shall be open and public
in accordance with the provisions of Article 9 (commencing with
Section 11120) of Chapter 1 of Part 1 of Division 3 of Title 2 of
the Government Code.

(2) In addition to the requirements of Section 11125 of the
Government Code, the commission shall include in its notice of
meetings the agenda of business to be transacted, and no item of
business shall be added to the agenda subsequent to the notice in
the absence of an unforeseen emergency situation. A rate increase
shall not constitute an unforeseen emergency situation. As used
in this subdivision, “meeting” shall include all investigations,
proceedings, and showings required by law to be open and public.

(3) In addition to scheduled meetings that are open to the public,
each commissioner shall hold office hours and be available to meet
with members of the public at least once a month in San Francisco
or Los Angeles.

(c) The commission shall have a seal, bearing the inscription
“Public Utilities Commission State of California.” The seal shall
be affixed to all writs and authentications of copies of records and
to such other instruments as the commission shall direct.

(d) The commission may procure all necessary books, maps,
charts, stationery, instruments, office furniture, apparatus, and
appliances.

SEC. 2.  

Section 309.1 of the Public Utilities Code is amended
and renumbered to read:

305.5.  

The Governor may appoint one adviser for each member
of the commission upon the request of the commission member.
Each adviser shall receive a salary fixed by the commission with
the approval of the Department of Human Resources. The total
number of advisers exempt from civil service shall not exceed
five.

SEC. 3.  

Section 309.1 is added to the Public Utilities Code, to
read:

309.1.  

The commission shall not reassign any staff member
from a duty or activity authorized by statute to another duty or
activity unless the Legislature has authorized personnel for that
duty or activity.

SEC. 4.  

Section 309.2 is added to the Public Utilities Code, to
read:

309.2.  

The commission’s internal auditor shall report directly
to the commission.

SEC. 5.  

Section 311.5 of the Public Utilities Code is amended
to read:

311.5.  

(a) (1) Prior to commencement of any meeting at which
commissioners vote on items on the public agenda the commission
shall make available to the public copies of the agenda, and upon
request, any agenda item documents that are proposed to be
considered by the commission for action or decision at a
commission meeting.

(2) In addition, the commission shall publish the agenda, agenda
item documents, and adopted decisions in a manner that makes
copies of them easily available to the public, including publishing
those documents on the Internet. Publication of the agenda and
agenda item documents shall occur on the Internet at the same
time as the written agenda and agenda item documents are made
available to the public.

begin delete

(3) The commission shall provide an opportunity for members
of the public to comment on a specific agenda item during the time
that the commission considers the item.

end delete

(b) The commission shall publish and maintain the following
documents on the Internet:

(1) Each of the commission’s proposed and alternate proposed
decisions and resolutions, until the decision or resolution is adopted
and published.

(2) Each of the commission’s adopted decisions and resolutions.
The publication shall occur within 10 days of the adoption of each
decision or resolution by the commission.

(3) The then-current version of the commission’s general orders
and Rules of Practice and Procedure.

(4) Each of the commission’s rulings. The commission shall
maintain those rulings on its Internet Web site until final
disposition, including disposition of any judicial appeals, of the
respective proceedings in which the rulings were issued.

(5) A docket card that lists, by title and date of filing or issuance,
all documents filed and all decisions or rulings issued in those
proceedings. The commission shall maintain the docket card until
final disposition, including disposition of any judicial appeals, of
the corresponding proceedings. Each document that the commission
distributes to any service-of-process list shall be docketed and
identified on the commission’s Internet Web site.

SEC. 6.  

Section 314.5 of the Public Utilities Code is amended
to read:

314.5.  

The commission shall inspect and audit the books and
records for regulatory and tax purposes (a) at least once in every
three years in the case of every electrical, gas, heat, telegraph,
telephone, and water corporation serving over 1,000 customers,
and (b) at least once in every five years in the case of every
electrical, gas, heat, telegraph, telephone, and water corporation
serving 1,000 or fewer customers. An audit conducted in
connection with a rate proceeding shall be deemed to fulfill the
requirements of this section. Reports of the inspections and audits
and other pertinent information shall be posted on the commission’s
Internet Web site.

SEC. 7.  

Section 468 is added to the Public Utilities Code, to
read:

468.  

(a) Each public utility that submits an application to
change its rates shall include in its application a summary of the
application that can be understood by the utility’s ratepayers. This
summary and the application shall be posted on the commission’s
Internet Web site and, if the utility has an Internet Web site, shall
be posted on the utility’s Internet Web site.

(b) Each public utility that maintains an Internet Web site shall
include on that site contact information for a utility official who
can discuss the nature of the rate application. If the rate application
includes different rates depending upon the utility’s service
territory, the contact information shall identify a utility official
who can discuss the nature of the rate application for each separate
service territory. The utility official shall also be qualified to
discuss, in general terms, the operation of the utility in each service
territory.

SEC. 8.  

Section 583 of the Public Utilities Code is amended
to read:

583.  

(a) No information furnished to the commission by a
public utility, or any business that is a subsidiary or affiliate of a
public utility, or a corporation that holds a controlling interest in
a public utility, except those matters specifically required to be
open to public inspection by this part, shall be open to public
inspection or made public except on order of the commission, or
by the commission or a commissioner in the course of a hearing
or proceeding. Any present or former officer or employee of the
commission who divulges that information is guilty of a
misdemeanor.

(b) If in a proceeding before the commission, a public utility,
or any business that is a subsidiary or affiliate of a public utility,
or a corporation that holds a controlling interest in a public utility,
begin delete seeks to file end delete begin insert files end insert a pleading, report, or other document with the
commission that begin delete preserves the confidentiality of information
contained therein, it shall file end delete begin insert is claimed to contain confidential
information, end insert a public version of the pleading, report, or other
document that contains sufficient information for any other party
to the proceeding to understand the nature of its begin delete contents. end delete begin insert contents
shall be concurrently filed with the commission. end insert An administrative
law judge assigned to the proceeding, the assigned commissioner,
or the commission may determine the sufficiency of the
information contained in the public version of the pleading, report,
or other document.

(c) Any party to a proceeding before the commission may file
a motion to make public a pleading, report, or other document filed
by a public utility, or any business that is a subsidiary or affiliate
of a public utility, or a corporation that holds a controlling interest
in a public utility, under a claim of confidentiality. An
administrative law judge assigned to the proceeding or the assigned
commissioner shall hold a hearing on the motion and determine
whether the pleading, report, or other document should be made
public. In determining the motion, the administrative law judge or
assigned commissioner shall make written findings and
conclusions.

(d) At any public hearing, an assigned administrative law judge
may provide direction to the parties in a proceeding as to what
types of information may be filed with the commission under a
claim of confidentiality.

begin insert

(e) No ruling or order entered pursuant to subdivision (c) shall
be considered a ruling or order of the commission or a
commissioner unless it reflects an examination of the specific
information or documents to be made public or opened to public
inspection. Any party may seek review of a ruling or order issued
pursuant to subdivision (c) to the full commission by filing a motion
for rehearing de novo by the full commission within 30 days of the
date the ruling or order on the motion was issued, and the pleading,
report, or other document shall remain confidential while the
motion for rehearing is pending. When a motion for rehearing de
novo is filed, the full commission shall make the final determination
of the motion to make public a pleading, report, or other document
filed under claim of confidentiality.

end insert

SEC. 9.  

Article 1.5 (commencing with Section 720) is added
to Chapter 4 of Part 1 of Division 1 of the Public Utilities Code,
to read:

 

Article 1.5.  Transparency of Commission Regulatory Activities

 

720.  

The Legislature finds and declares all of the following:

(a) Transparency in how the commission operates and makes
its decisions is critical to gaining and retaining the confidence of
the public at large and serving the public utility ratepayers affected
by the commission’s decisions.

(b) The activities of private entities that provide essential
services to the public and that have dedicated their property to the
service of the public are defined as public utilities in the California
Constitution, subject to the control by the Legislature.

(c) The services provided by public utilities are essential to the
proper operation of our economy and fundamentally affect every
California family and business.

(d) Under the California Constitution, the commission is granted
authority to establish its own procedures subject to statute and due
process and to establish rules for public utilities, and the Legislature
has plenary authority to confer additional authority and jurisdiction
upon the commission and to establish the manner and scope of
review of commission action in a court of record.

(e) Because the California Constitution provides special
consideration to public utilities and to the commission that
regulates those public utilities, it is essential to give the public the
ability to monitor the functioning of the commission and its actions.

(f) The greater and more unfettered the public official’s power,
the greater the public’s interest in monitoring the exercise of that
power.

(g) Access to information concerning the conduct of the public’s
business by the commission is a fundamental and necessary right
for every person in the state.

(h) Information concerning services provided by public utilities
is of the highest public interest, including information about quality
and reliability of service to the public and information about costs
and profits.

(i) While confidentiality of information submitted by a public
utility may be necessary in some cases, as provided in Section 583,
the activities and decisions of the commission should remain as
transparent as reasonably possible.

721.  

The commission shall open a proceeding to begin delete reexamine,
consistent with the findings of Section 720 and the requirements
of Section 724, end delete begin insert reexamine end insert Decision 06-06-066 (June 29, 2006)
Interim Opinion Implementing Senate Bill 1488, Relating to
Confidentiality of Electric Procurement Data Submitted to the
Commission, as modified by Decision 07-05-032 (May 3, 2007),
Order Modifying Decision (D.) 06-06-066 and Denying Rehearing
of the Decision, as begin delete Modified. end delete begin insert Modified, and shall modify the
commission’s confidentiality practices and procedures consistent
with the requirements of Section 724. end insert

722.  

(a) The public advisor of the commission, appointed
pursuant to Section 321, shall have responsibility for ensuring that
the activities of the commission are transparent to the public as
provided by law, including, but not limited to, the California Public
Records Act (Chapter 3.5 (commencing with Section 6250) of
Division 7 of Title 1 of the Government Code), the Bagley-Keene
Open Meeting Act (Article 9 (commencing with Section 11120)
of Chapter 1 of Part 1 of Division 3 of Title 2 of the Government
Code), and this article.

(b) The commission shall provide funding for the costs of the
office of the public advisor from reimbursement fees paid pursuant
to Chapter 2.5 (commencing with Section 401).

(c) The public advisor shall develop and make available
easy-to-understand guides for the public to participate in
commission proceedings.

(d) The public advisor shall update, maintain, and post the
commission’s service-of-process lists on the commission’s Internet
Web site in an electronic form that may be used by any party to
complete service of process.

723.  

The California State Auditor shall appoint to the staff of
the California State Auditor’s Office an inspector general for the
commission, which shall report any findings to the Legislature.
The inspector general shall have authority, including the authorities
of the California State Auditor, to audit and investigate the
commission’s activities based on information it receives. The
California State Auditor may recover the costs for the inspector
general’s activities from reimbursement fees paid pursuant to
Chapter 2.5 (commencing with Section 401).

724.  

(a) The public advisor of the commission shall have
independent responsibility for overseeing the commission’s Internet
Web site, in order to ensure adequate transparency in the
information provided to the public.

(b) The commission shall make available to the public on its
Internet Web site all of the following information:

(1) A summary of all electricity procurement contracts entered
into by an electrical corporation during the previous three years,
the expenses of which the begin delete commission end delete begin insert commission, if applicable, end insert
has approved as being just and reasonable. The summary shall
include information as to the name of the generating facility, its
location, the electricity or electricity products procured, the fuel
or energy source used to generate the electricity, the estimated
total expense that the electrical corporation will incur pursuant to
the contract, the estimated cost by unit of energy that the electrical
corporation will incur pursuant to the contract, when begin insert , if applicable, end insert
the contract was approved by the commission, and, if applicable,
the decision or resolution approving the contract. Information on
costs begin insert and expenses end insert of the contract shall not be posted until the
begin insert later of when the end insert electrical corporation has completed the legal
transactions required to acquire the electricity or electricity
begin delete products. end delete begin insert products, or one year after the commission approves the
contract, if applicable. end insert

(2) A list of all proceedings involving public utilities then
pending before the commission with information, in summary
form, as to the amount of any rate increase being sought, both in
cumulative amount and by unit or other means billed to ratepayers.

(3) Transcripts and available summaries of documents, evidence,
testimony, and proceedings before the commission or its
administrative law judges that are not subject to confidentiality
pursuant to Section 583, or with confidential portions redacted.

(4) A list of all requests submitted to the commission pursuant
to the California Public Records Act (Chapter 3.5 (commencing
with Section 6250) of Division 7 of Title 1 of the Government
Code).

(5) Advice letters approved by the commission.

SEC. 10.  

Section 1701.1 of the Public Utilities Code is
amended to read:

1701.1.  

(a) The commission, consistent with due process,
public policy, and statutory requirements, shall determine whether
a proceeding requires a hearing. The commission shall determine
whether the matter requires a quasi-legislative, an adjudication,
or a ratesetting hearing. The commission’s decision as to the nature
of the proceeding shall be subject to a request for rehearing within
10 days of the date of that decision. If that decision is not appealed
to the commission within that time period it shall not be
subsequently subject to judicial review. Only those parties who
have requested a rehearing within that time period shall
subsequently have standing for judicial review and that review
shall only be available at the conclusion of the proceeding. The
commission shall render its decision regarding the rehearing within
30 days. The commission shall establish regulations regarding ex
parte communication on case categorization issues.

(b) (1) The commission upon initiating a hearing shall assign
one or more commissioners to oversee the case and an
administrative law judge where appropriate. The assigned
commissioner shall schedule a prehearing conference. The assigned
commissioner shall prepare and issue by order or ruling a scoping
memo that describes the issues to be considered and the applicable
timetable for resolution.

(2) The assigned commissioner shall convene an all-parties
meeting as soon as practicable after the parties in the proceeding
are known to discuss the substantive matter to be decided in the
proceeding and prospects for resolving issues that would otherwise
be litigated.

(3) The assigned commissioner shall attend all hearings in a
proceeding.

(c) (1) Quasi-legislative cases, for purposes of this article, are
cases that establish policy, including, but not limited to,
rulemakings and investigations which may establish rules affecting
an entire industry.

(2) Adjudication cases, for purposes of this article, are
enforcement cases and complaints except those challenging the
reasonableness of any rates or charges as specified in Section 1702.

(3) Ratesetting cases, for purposes of this article, are cases in
which rates are established for a specific company, including, but
not limited to, general rate cases, performance-based ratemaking,
and other ratesetting mechanisms.

(4) “Ex parte communication,” for purposes of this article,
means any oral or written communication between a decisionmaker
and a person with an interest in a matter before the commission
concerning substantive, but not procedural issues, that does not
occur in a public hearing, workshop, or other public proceeding,
or on the official record of the proceeding on the matter. “Person
with an interest,” for purposes of this article, means any of the
following:

(A) Any applicant, an agent or an employee of the applicant,
or a person receiving consideration for representing the applicant,
or a participant in the proceeding on any matter before the
commission.

(B) Any person with a financial interest, as described in Article
1 (commencing with Section 87100) of Chapter 7 of Title 9 of the
Government Code, in a matter before the commission, or an agent
or employee of the person with a financial interest, or a person
receiving consideration for representing the person with a financial
interest.

(C) A representative acting on behalf of any civic,
environmental, neighborhood, business, labor, trade, or similar
organization who intends to influence the decision of a commission
member on a matter before the commission.

The commission shall by regulation adopt and publish a
definition of decisionmakers and persons for purposes of this
section, along with any requirements for written reporting of ex
parte communications and appropriate sanctions for noncompliance
with any rule proscribing ex parte communications. The regulation
shall provide that reportable communications shall be reported by
the party, whether the communication was initiated by the party
or the decisionmaker. Communications shall be reported within
three working days of the communication by filing a “Notice of
Ex Parte Communication” with the commission in accordance
with the procedures established by the commission for the service
of that notice. The notice shall include the following information:

(i) The date, time, and location of the communication, and
whether it was oral, written, or a combination.

(ii) The identity of the recipient and the person initiating the
communication, as well as the identity of any persons present
during the communication.

(iii) A description of the party’s, but not the decisionmaker’s,
communication and its content, to which shall be attached a copy
of any written material or text used during the communication.

SEC. 11.  

Section 1701.2 of the Public Utilities Code is
amended to read:

1701.2.  

(a) If the commission pursuant to Section 1701.1 has
determined that an adjudication case requires a hearing, the
procedures prescribed by this section shall be applicable. The
assigned commissioner or the assigned administrative law judge
shall hear the case in the manner described in the scoping memo.
The scoping memo shall designate whether the assigned
commissioner or the assigned administrative law judge shall preside
in the case. The commission shall provide by rule for peremptory
challenges and challenges for cause of the administrative law judge.
Challenges for cause shall include, but not be limited to, financial
interests and prejudice. The rule shall provide that all parties are
entitled to one peremptory challenge of the assignment of the
administrative law judge in all cases. All parties are entitled to
unlimited peremptory challenges in any case in which the
administrative law judge has within the previous 12 months served
in any capacity in an advocacy position at the commission, been
employed by a regulated public utility, or has represented a party
or has been a party of interest in the case. The assigned
commissioner or the administrative law judge shall prepare and
file a decision setting forth recommendations, findings, and
conclusions. The decision shall be filed with the commission and
served upon all parties to the action or proceeding without undue
delay, not later than 60 days after the matter has been submitted
for decision. The decision of the assigned commissioner or the
administrative law judge shall become the decision of the
commission if no further action is taken within 30 days. Any
interested party may appeal the decision to the commission,
provided that the appeal is made within 30 days of the issuance of
the decision. The commission may itself initiate a review of the
proposed decision on any grounds. The commission decision shall
be based on the record developed by the assigned commissioner
or the administrative law judge. A decision different from that of
the assigned commissioner or the administrative law judge shall
be accompanied by a written explanation of each of the changes
made to the decision.

(b) (1)  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
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.

(2) An attorney that is prosecuting a matter before the
commission shall not meet with any commissioner regarding the
matter that the attorney is prosecuting unless all parties are present.

(c) Ex parte communications shall be prohibited in adjudication
cases.

(d) Notwithstanding any other law, the commission may meet
in a closed hearing to consider the decision that is being appealed.
The vote on the appeal shall be in a public meeting and shall be
accompanied with an explanation of the appeal decision.

(e) Adjudication cases shall be resolved within 12 months of
initiation unless the commission makes findings why that deadline
cannot be met and issues an order extending that deadline. In the
event that a rehearing of an adjudication case is granted, the parties
shall have an opportunity for final oral argument.

(f) (1) The commission may determine that the respondent
lacks, or may lack, the ability to pay potential penalties or fines
or to pay restitution that may be ordered by the commission.

(2) If the commission determines that a respondent lacks, or
may lack, the ability to pay, the commission may order the
respondent to demonstrate, to the satisfaction of the commission,
sufficient ability to pay potential penalties, fines, or restitution that
may be ordered by the commission. The respondent shall
demonstrate the ability to pay, or make other financial
arrangements satisfactory to the commission, within seven days
of the commission commencing an adjudication case. The
commission may delegate to the attorney to the commission the
determination of whether a sufficient showing has been made by
the respondent of an ability to pay.

(3) Within seven days of the commission’s determination of the
respondent’s ability to pay potential penalties, fines, or restitution,
the respondent shall be entitled to an impartial review by an
administrative law judge of the sufficiency of the showing made
by the respondent of the respondent’s ability to pay. The review
by an administrative law judge of the ability of the respondent to
pay shall become part of the record of the adjudication and is
subject to the commission’s consideration in its order resolving
the adjudication case. The administrative law judge may enter
temporary orders modifying any financial requirement made of
the respondent pending the review by the administrative law judge.

(4) A respondent that is a public utility regulated under a rate
of return or rate of margin regulatory structure or that has gross
annual revenues of more than one hundred million dollars
($100,000,000) generated within California is presumed to be able
to pay potential penalties or fines or to pay restitution that may be
ordered by the commission, and, therefore, paragraphs (1) to (3),
inclusive, do not apply to that respondent.

SEC. 12.  

No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of
the Government Code, or changes the definition of a crime within
the meaning of Section 6 of Article XIII B of the California
Constitution.