BILL ANALYSIS Ó
AB 825
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Date of Hearing: April 13, 2015
ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
Anthony Rendon, Chair
AB 825
(Rendon) - As Introduced February 26, 2015
SUBJECT: Public Utilities Commission
SUMMARY: AB 825 makes various changes to statutes that govern
the operation of the California Public Utilities Commission.
Specifically, this bill:
a)Prohibits 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
president, executive director, and the attorney to the
commission.
b)Deletes a requirement 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 and instead require that the inspections and
audit and other pertinent information be posted on the
commission's Internet Web site.
c)Requires each public utility that submits an application to
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change its rates to include in its application a summary of
the application that can be understood by the utility's
ratepayers, require the summary 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 along
with the name and contact information of an utility official
who can discuss the nature of the rate application.
d)Provide that if in a proceeding before the commission, a
public utility, or subsidiary, affiliate, or holding company,
seeks to file a pleading, report, or other document with the
commission that preserves the confidentiality of information
contained therein, it would be required to file 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 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.
e)Requires the commission to post on its Internet Web site a
summary 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, and a list of all public utilities with
ratesetting cases 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.
f)Authorizes an action to enforce the requirements of the
Bagley-Keene Open Meeting Act or the California Public Records
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Act to be brought against the commission in the superior
court.
EXISTING LAW:
1)Requires the CPUC to adopt e procedures to ensure
confidentiality of market sensitive information submitted in
an electrical corporation's proposed procurement plan or
resulting from or related to its approved procurement plan,
including, but not limited to, proposed or executed power
purchase agreements, data request responses, or consultant
reports, or any combination, provided that the Office of
Ratepayer Advocates and other consumer groups that are
nonmarket participants shall be provided access to this
information under confidentiality procedures authorized by the
CPUC. (Public Utilities Code 454.5 (g))
2)Requires every public utility to provide information to the
CPUC including specific answers to all questions posed by the
CPUC. (Public Utilities Code 581)
3)Requires every public utility to deliver copies of any or all
maps, profiles, contracts, agreements, franchises, reports,
books, accounts, papers, and records in its possession or in
any way relating to its property or affecting its business,
and also a complete inventory of all its property (Public
Utilities Code 582)
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4)Provides that no information provided to the CPUC by a public
utility or its subsidiary or affiliate shall be open to the
public except on the order of the CPUC or a commissioner in
the course of a hearing or proceeding. Also provides that any
present or former officer or employee of the CPUC who divulges
information is guilty of a misdemeanor. (Public Utilities Code
583)
5)Requires public utilities to furnish reports periodically,
special, or both concerning any matter about which the CPUC is
authorized to inquire or keep itself informed or which it is
required to enforce. (Public Utilities Code 584)
6)Requires the public utilities to provide access to all
computer models used by the public utility, in any rate
proceeding or proceeding that may influence a rate, to the
CPUC. (Public Utilities Code 585)
7)Provides that a public utility may provide personal customer
information requested to a district attorney but that customer
usages of services can only be provided pursuant to a court
order or subpoena. (Public Utilities Code 588)
8)Establishes an annual reporting requirement for the CPUC to
disclose power purchase contract costs in an aggregated form
categorized according to the year the procurement transaction
was approved, the eligible renewable energy resource type,
including bundled renewable energy credits, the average
executed contract price, and average actual recorded costs for
each kilowatthour of production. (Public Utilities Code 911)
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9)Allows an aggrieved party to a CPUC decision to petition for a
writ of review in the court of appeal or the Supreme Court
within 30 days of the CPUC's denying an application for
rehearing. (Public Utilities Code 1756)
10)Allows an aggrieved party to a CPUC decision to petition for
a writ of review in the court of appeal or the Supreme Court
within 30 days of a CPUC decision following the grant of an
application for rehearing. (Public Utilities Code 1756)
11)Prevents superior court from reviewing, reversing,
correcting, or annulling any order or decision of the
commission or suspending or delaying the execution or
operation thereof, or enjoining, restraining, or interfering
with the CPUC in the performance of its "official duties."
(Public Utilities Code 1759)
12)States the public policy of this state that public agencies
exist to aid in the conduct of the people's business and the
proceedings of public agencies be conducted openly so that the
public may remain informed. (Government Code 11120)
FISCAL EFFECT: Unknown.
COMMENTS:
1)Author's Statement . "Transparency in how government makes its
decisions remains a critical link to gaining the public's
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trust in those decisions. Recent media reports have shown that
California Public Utilities Commission decisions lacked
transparency, with some deals done in private meetings with
investor-owned utility representatives. AB 825 addresses
several issues to improve the Commission's transparency."
2)Staff reassignment. A 2013 audit of the CPUC by the California
Department of Finance found "widespread weaknesses within
CPUC's budget operations which compromise its ability to
prepare and present reliable and accurate budget information."
The Legislature enacted a requirement that the CPUC conduct a
zero based budget (ZBB) for all of its programs by January
2015. The Legislative Analyst's Office reviewed the CPUC's
ZBB<1> and made a number of findings and recommendations, one
of which is:
"Based on our understanding of the various types of ZBBs,
the CPUC report is not a ZBB. As discussed above, a common
goal of most ZBBs is to encourage government agencies to
analyze their existing resources in an effort to determine
whether resources could be deployed in a more efficient and
cost-effective manner. While the report includes a
description of current activities and resources, it lacks a
comprehensive analysis of these activities and resources.
The report does not provide an analysis of the minimum
level of funding needed to achieve current service levels
or an analysis of the degree to which having higher or
lower funding levels would affect the amount or quality of
services provided. Without such an analysis, the report
provides relatively little information to inform the
Legislature about potential changes to the level or
distribution of resources provided to CPUC."
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---------------------------
<1>
http://www.lao.ca.gov/reports/2015/budget/resources-environmental
-protection/Res-Budget-Analysis-021915.pdf
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3)Audits. In 2013 the California State Auditor<2> published a
report on their review of the CPUC's compliance with statutory
requirements to review utility balancing accounts. Their
report states:
"We also found the commission does not audit the accounting
records of the utilities it regulates according to the
schedule prescribed by state law: every three years for
those utilities that serve more than 1,000 customers and
every five years for those utilities that serve 1,000 or
fewer customers."
In addition, the Auditor found that the PUC has not always
complied with the requirement to audit utilities' books and
records according to the schedule prescribed by state law. And
that for over three decades, it has not provided the results
of these audits to the California State Board of Equalization
(Equalization) for tax assessment purposes, as required by
state law.
AB 825 would eliminate the requirement that the audits be
provided to Equalization and instead require that they be
posted on the CPUC website.
4)Rate Change Proposals . Currently, most utilities provide this
information on their websites, although not always in a
readily accessible location. Currently, utilities provide a
summary of their rate cases in newspaper public notices that
is approved by the CPUC.
5)Procedures for Obtaining Information and Records in the
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<2> https://www.auditor.ca.gov/pdfs/reports/2013-109.pdf
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Possession of the CPUC (General Order 66-C). The CPUC adopted
General Order (GO) 66-C in 1974. GO 66-C implements the
requirements of Section 583 and specifies procedures for
obtaining information.The most recent update occurred in 1982.
GO-66 specifies those materials that are not open to public
inspection, procedures for examining and obtaining public
records; a process for appealing a CPUC decision to access
records; and a process, within a hearing or proceeding,
allowing a commissioner or an "examiner" to direct that
information or records not open to the public be divulged, for
good cause shown.
In 2013 the CPUC adopted a resolution regarding the disclosure
of safety records.<3> In this resolution the CPUC stated "we
intend to open a rulemaking in the near future to address
improving the public's access to records that are not exempt
under the CPRA or other state or federal law, and the CPUC's
ability to process records requests and requests for
confidential treatment in an efficient, well-reasoned, and
consistent manner."
Several important differences are established in AB 825 that
are not in current statute or GO 66-C, specifically:
Requires an entity requesting confidential treatment
of material to provide a summary that contains sufficient
information for any other party to the proceeding to
understand the nature of its contents.
Provides that an Administrative Law Judge (ALJ) may
determine whether that summary is sufficient.
-------------------------
<3>
http://www.cpuc.ca.gov/NR/rdonlyres/0258E4D3-B876-494D-A39E-20864
F74A825/0/FinalResL436ReDisclosureofSafetyRelatedRecord.pdf
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Requires an ALJ or the assigned commissioner to hold
a hearing to determine whether a document that is filed
with a request to be treated confidentially shall be made
public and provide written findings and conclusion on
that determination.
Specifies that an assigned ALJ at any public hearing
may provide direction to parties in a proceeding as to
what types of information may be filed with the
commission under a claim of confidentiality.
1)Electricity Procurement Contract Prices . Current CPUC policy
is to release individual contract information 3 years after
the facilities has commenced operation. When the bill (SB 836,
(Padilla, 2011) to require an annual RPS was deliberated the
Senate Energy Committee analysis (May 3, 2011) noted that:
"CPUC has expressed support for policies that call for greater
public access for procurement documents relating to the RPS
program because of the public interest aspects of that
program. But they also opine that confidentiality protections
of the terms of contracts for electric procurement are
essential to avoid electricity market manipulation. As a
consequence the CPUC has adopted a policy that precludes the
release of the cost of individual RPS contracts for three
years to provide the parties with a window of confidentiality.
"
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"Concern has been expressed by a few parties not with the
release of the data, but with the form in which it is
released. They want to ensure that the data releases do not
inadvertently result in the release of individual contract
data which might occur, for instance, if only one contract
were to be approved by the CPUC in the specified time frame."
In July 2013 the CPUC requested comments<4> on a staff
proposal to make rules related to confidentiality of
information about compliance, reporting, procurement, and
planning for the RPS program more transparent, accessible, and
consistent, specifically:
The price of RPS contracts approved by resolution will
be public in the draft resolution prepared by staff and in
the final resolution adopted by the CPUC.
The price for RPS-eligible utility owned generation
(UOG) projects will be public in the application.
An array of information about bids submitted to IOUs
will be public after the IOUs' shortlists for a
solicitation are approved by the CPUC.
Information about costs of RPS contracts in past years
will be public.
Generation cost forecasts for each retail seller will be
public when aggregated by resource category (e.g.,
geothermal, wind).
Generation forecast assumptions of each IOU, used in
calculating the "RPS net short" (including viability and
failure rate assumptions), will be public.
Information about RPS compliance in past years will be
public.
--------------------------
<4>
http://www.cpuc.ca.gov/NR/rdonlyres/68D58BFE-E350-4D49-B3D6-DAB43
B806A5F/0/2013Q2RPSReportFINAL.PDF , page 9.
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The period of time for keeping confidential a retail
seller's bundled retail sales projection and its RPS net
short calculation will be reduced to two years (plus the
year the report was issued), from the current three years
(plus the year the report was issued)
According to the CPUC's Quarterly RPS report for the Fourth
Quarter of 2014,<5>On November 20, 2014, the Commission
adopted several reforms to the RPS procurement. Process
through D.14-11-042 intended to among other things, increase
the transparency of the RPS contract review process, increase
the transparency of the Commission's review of RPS
procurement, establish clear standards for the RPS procurement
review process, issue Commission determinations on contract
reasonableness on a defined timeline, and generally support
market certainty in RPS procurement. It appears that reforms
proposed regarding pricing were not adopted by the CPUC.
1)Adjudication of Open Meeting Act Matters. A recent appellate
court decision found that an interested person desiring to
enforce the Bagley-Keene Open Meeting Act against the CPUC
must do so by filing a petition for writ of mandate in the
Supreme Court or the Court of Appeal and may not do so by
filing an action for injunctive relief in the superior court.
In doing so, the court upheld the superior court's ruling that
it had no jurisdiction over alleged CPUC Bagley-Keene
violations. The court relied on Public Utilities Code Section
1759 as the reason for its determination and agreed with the
CPUC in its interpretation that holding meetings is part of
the CPUC's "official duties," and therefore superior courts
had no jurisdiction.
The construction of PU Code 1756-1768 (judicial review) is
similar to that of Section 67 of the original Public Utilities
--------------------------
<5>
http://www.cpuc.ca.gov/NR/rdonlyres/0605598F-AE7E-43D2-BA27-1580C
0F09421/0/2014Q4RPSReportFINAL3315.pdf
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Act of 1912. As such, the judicial review section of the
Public Utilities Code was largely in place more than half a
century before the Bagley-Keene Open Meeting Act (1967), it
was meant to apply to CPUC decisions and orders, not to
sunshine laws.
The justification for pre-empting superior court review of
CPUC decisions is that the CPUC, with its own hearing
processes, is better suited to hear cases under its
jurisdiction than superior court. For CPUC-jurisdictional
issues, the CPUC acts as the court of record. On the other
hand, appellate and Supreme Court review of CPUC decisions is
limited to review and is prohibited from acting as a court of
record. (Public Utilities Code 1757 and 1757.1)
The CPUC procedures and processes, such as ratemaking,
rulemaking, and administrative adjudication are more
appropriate the current superior court review than for the
enforcement of the Bagley-Keene Open Meeting Act, under which
all other all state agencies are subject.
2)Support and Opposition.
The Citizens Oversight Projects supports AB 825 and suggests a
number of amendments, including but not limited to: make
transcripts publicly accessible and place them in the
applicable docket; place all exhibits, data requests, and
responses on the CPUC website in the appropriate docket; place
data requests and responses on the CPUC website; maintain a
curated summary of proceedings; include proceeding summary,
status, and schedule in the docket; provide traditional
judicial review of CPUC decisions; allow
audio/video/photographic recording devices in public meetings;
prohibit ex parte communications; allow comments by parties at
Commission meetings at the time an item is heard; improve
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settlement procedures; prohibit the ORA from engaging in
private and secret settlement conferences, particularly prior
to the first settlement conference; use a magistrate judge for
settlement; establish an independent administrative law judge
to review intervenor compensation requests; eliminate travel
gifts; use "approved budget with change orders" rather than
"spend now, explain later;" use independent oversight panels;
use list-serves instead of service lists; provide ORA their
own staff attorneys; require full commission review of
objections to discovery requests made by ORA; and maintain a
database of public record requests.
3)Double Referral. This bill is double referred to Judiciary
Committee.
4)Support and Opposition.
The Citizens Oversight Projects supports AB 825 and suggests a
number of amendments, including but not limited to: make
transcripts publicly accessible and place them in the
applicable docket; place all exhibits, data requests, and
responses on the CPUC website in the appropriate docket; place
data requests and responses on the CPUC website; maintain a
curated summary of proceedings; include proceeding summary,
status, and schedule in the docket; provide traditional
judicial review of CPUC decisions; allow
audio/video/photographic recording devices in public meetings;
prohibit ex parte communications; allow comments by parties at
Commission meetings at the time an item is heard; improve
settlement procedures; prohibit the ORA from engaging in
private and secret settlement conferences, particularly prior
to the first settlement conference; use a magistrate judge for
settlement; establish an independent administrative law judge
to review intervenor compensation requests; eliminate travel
gifts; use "approved budget with change orders" rather than
"spend now, explain later;" use independent oversight panels;
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use list-serves instead of service lists; provide ORA their
own staff attorneys; require full commission review of
objections to discovery requests made by ORA; and maintain a
database of public record requests.
TURN believes that the heightened scrutiny applied to claims
of confidentiality should be the same for any party appearing
at the CPUC.
Ms. Glickfield states that the PUC doesn't provide information
about the Water investor owned utilities that it oversees, or
the evaluations of their pricing and operations on their
website. They don't provide the boundaries of local water
service areas on the PUC website. If they audit the
operational efficiency, the status of the distribution
infrastructure and the approaches to water conservation at
IOUs, it is not easily accessible on their website. It is
hard to understand the criteria that they use to determine
whether proposed rate hikes are or are not appropriate or
comparable to surrounding areas.
The California Coalition of Utility Employees, the California
State Association of Electrical Workers, the California State
Pipe Trades Council, and the Western States Council of Sheet
Metal Workers believe that President Michael Picker is
ushering in a new era of openness and transparency at the
California Public Utilities Commission and strongly believe
Assembly Bill 825 sets the bar high for the CPUC to ensure
that the public has a guaranteed level of access protected in
law that is beyond reproach by future commissions.
REGISTERED SUPPORT / OPPOSITION:
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Support
California Coalition of Utility Employees
California State Association of Electrical Workers
California State Pipe Trades Council Citizens Oversight Projects
(if amended)
Madelyn Glickfeld (if amended)
TURN
Western States Council of Sheet Metal Workers
Opposition
None on file
Analysis Prepared by:Sue Kateley / U. & C. / (916) 319-2083
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