BILL ANALYSIS Ó
AB 825
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Date of Hearing: April 28, 2015
ASSEMBLY COMMITTEE ON JUDICIARY
Mark Stone, Chair
AB 825
Rendon - As Amended: April 20, 2015
SUBJECT: Public Utilities Commission
KEY ISSUES:
1)Should the Public Utilities Commission make more documents
accessible to the public, including by posting
non-confidential documents (or public versions of confidential
documents) on an internet website?
2)Should a party aggrieved by a decision of the Public Utilities
Commission be allowed to bring an action challenging that
decision in the superior courts of Los Angeles or San
Francisco, as opposed to existing law that only permits
petitioning an appellate court?
SYNOPSIS
Most provisions in this bill seek greater transparency in the
decision-making process of the California Public Utilities
Commission (PUC) by, among other things, requiring the PUC to
post various filings, reports, procurement contracts, and other
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documents on an Internet Web site and otherwise increase citizen
access to information concerning PUC decisions. No doubt this
bill reflects recent controversies surrounding former PUC
President Michael Peevey, his ties to Pacific Gas & Electric and
Southern California Edison, and how those ties allegedly
affected PUC decisions relating to the San Bruno tragedy and the
failed San Onofre nuclear plant. These controversies have
raised questions about the PUC decision-making process and its
relationship to the entities that it is charged with regulating.
Many of the bill's transparency requirements were addressed in
the analysis of the Assembly Committee on Utilities and
Commerce, which approved the bill by a 14-0 vote. The bill was
referred to this Committee because, as most recently amended, it
changes the process of judicial review of PUC decisions.
Although the state constitution gives the Legislature plenary
authority to establish a process of judicial review of PUC
decisions, statutes have long required petitions challenging PUC
decisions to be directed to California Supreme Court or (since
1999) one of the California Courts of Appeal. What kinds of
"decisions" must be challenged in an appellate court is open to
debate; however, a California Court of Appeal recently suggested
that a challenge to any decision of PUC would need to go to an
appellate court. In that case, the court held that an action
alleging that PUC violated the Bagley-Keene Open Meeting Act
could not be brought in superior court. Prior to recent
amendments, this bill responded to that decision by providing
that a person could bring an action alleging a violation of
either the Bagley-Keene Act or the California Public Records Act
in superior court. As recently amended, however, the bill goes
much further: it eliminates the long-standing requirement that
challenges go to an appellate court and instead permits any
party aggrieved by a decision of the PUC to obtain a review in
the superior courts of either of San Francisco or Los Angeles.
The bill is supported by labor, consumer, and environmental
groups.
SUMMARY: Imposes new requirements aimed at increasing the
transparency of the decision-making of the California Public
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Utilities Commission (PUC) and fundamentally changes the process
of judicial review of PUC decisions. Specifically, this bill:
1)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
commission.
2)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.
3)Requires 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, require the 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 along with the name and contact information of an
utility official who can discuss the nature of the rate
application.
4)Provides 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
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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.
5)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
rates-setting 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.
6)Permits any party aggrieved by a decision or order issued by
the PUC to obtain a review of the order in the superior court
for the City and County of San Francisco or the County of Los
Angeles, by filing in the court, within 60 days after the
decision or order of the PUC upon the application of
rehearing, a written petition praying that the order of the
PUC be modified or set aside in whole or part. Specifies the
following:
a) No objection shall be considered by the court unless
the objection had been urged upon the PUC in the
application for rehearing.
b) Requires that a copy of the petition be transmitted by
the clerk of the court to the PUC and the PUC, upon receipt
of the petition, shall file with the court the record upon
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which the decision or order complained of was entered.
c) Specifies that until the record in the proceeding has
been filed in the court, the PUC may at any time, upon
reasonable notice and in any manner it determines is
proper, modify or set aside, in whole or in part, any
finding or order made or issued by it.
d) Permits a party to apply to the court for leave to
produce additional evidence, if the party shows that the
additional evidence is material and there were reasonable
grounds for failure to produce the evidence in the
proceeding before the PUC, the court may authorize
additional evidence in a manner and upon terms that the
court deems proper.
EXISTING LAW:
1)Requires the CPUC to adopt 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
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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)
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 any 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)
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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 kilowatt hour of production. (Public Utilities Code 911)
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)
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FISCAL EFFECT: As currently in print this bill is keyed fiscal.
COMMENTS: According to the author, recent media reports on the
California Public Utilities Commission have lessened the
public's trust in the Commission, in part, by showing that the
Commission's decision-making process "lacked transparency, with
some deals done in private meetings with investor-owned utility
representatives." No doubt this bill reflects recent
controversies surrounding former PUC President Michael Peevey,
his ties to Pacific Gas & Electric and Southern California
Edison, and how those ties allegedly affected PUC decisions
relating to the San Bruno tragedy and the failed but costly San
Onofre nuclear plant. These controversies have raised questions
about the PUC decision-making process and its relationships with
the entities that it is charged with regulating. However, in
addition to these higher profile issues, the author also
contends that since deregulation and the 2000 energy crisis the
PUC has tended to designate more information as "confidential"
and thus shielded from public scrutiny. The author believes that
AB 825 will improve transparency and increase public trust.
Transparency and Confidentiality Provisions: The transparency
provisions of this bill fall roughly into two categories.
First, the bill requires the PUC to post on its Website certain
documents pertaining to, or submitted by, regulated entities.
For example, existing law requires the PUC to periodically
inspect and audit the books of regulated entities and submit
reports of these investigations to the State Board of
Equalization (BOE). This bill would instead require these
reports to be posted on the PUC Website. This bill also
provides that when a regulated entity submits an application for
a rate change, the application shall be reduced to a
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plain-language summary and posted on the PUC Website. Second,
the bill alters existing rules on documents submitted to the PUC
under claims of confidentiality. For example, under this the
bill, if a regulated entity seeks to preserve the
confidentiality of a document, it must also file a "public
version" of the document that contains sufficient information
for any other party to understand the contents of the document.
In addition, this measure allows any party to file a motion to
make public any document filed under claim of confidentiality.
An administrative law judge or commissioner considering the
motion would hold a hearing and determine whether the document
should be made public. Finally, the bill makes certain kinds of
information presumptively public and not subject to
confidentiality restrictions. These presumptively public
documents would include contracts for goods and services
executed by the PUC and information submitted by a government
entity that is available to the public from that entity.
Judicial Review Provisions: Of greatest interest to this
committee is the bill's fundamental alteration of the manner in
which a person may challenge an order or decision of the PUC.
Existing law (Public Utilities Code Sections 1731-1768) sets
forth the process of obtaining a review of PUC decisions and the
grounds for, and scope of, that review. Before any review is
sought in a court, a party that wishes to challenge a PUC
decision must first ask the PUC for a rehearing. If, after the
rehearing process is exhausted, the PUC decides to reverse or
modify its decision, the challenging party may file a petition
for a writ of review in either the Court of Appeal or the
Supreme Court (but not in a superior court). The party filing
the petition must file a record sufficient to allow the court to
decide whether or not to grant a review. In other words, while
the appellate court is not required to grant a review - that is,
there is not appeal or review as a matter of right - it must at
least consider the record and exhibits attached to the petition.
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If the court denies the petition, it is not required to write
an opinion. However, the "summary denial" of the writ should not
be confused with a "summary judgment" in a trial court. In a
summary judgment, the case is dismissed without a consideration
of the merits. However, a summary denial is, at least in
theory, based on the merits as revealed in the record and
exhibits submitted by the petitioner. (See James B. v. Superior
Court (1995) 35 Cal. App. 4th 1014, 1018.) If the petition for
review is accepted, the process is treated like any other appeal
with full oral arguments before the court. A petitioner who
loses in the Court of Appeal may appeal to the California
Supreme Court, but such appeals are usually only accepted if
necessary to establish uniformity in decisions or settle a
disputed and important question of law.
By the author's own reckoning, this bill would initiate a
"fundamental change" in the long-standing judicial review
process for PUC decisions. Instead of filing a petition with
the Court of Appeal or the Supreme Court, which may or may not
grant the petition of review, an aggrieved party could file a
petition in the superior courts of San Francisco or Los Angeles
asking the court to modify or set aside, in whole or in part,
the decision of the PUC. The petition must be filed within 60
days of the challenged PUC decision. The bill would prohibit
the court from considering, except as specified, any new issues
that were not raised with the PUC in the rehearing. The PUC
could at any time prior to the filing of the record modify or
set aside the challenged decision.
General Concerns Expressed to the Committee: Because the
amendments affecting judicial review were made relatively late,
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and the change extensive, the Committee has not received formal
letters of opposition that relate to judicial review provisions.
However, while the Judicial Council has not taken a formal
position, it has raised general and specific concerns that the
Committee might wish to consider. At the most general level,
the Committee should consider whether the existing system of
petition to the Court of Appeal, which has been in place since
1999, is inadequate - or more importantly, whether review by the
superior courts of San Francisco and Los Angeles will yield
better results (depending on how one defines "better") than the
existing process. On the other hand, the mere fact that the
existing restriction on the superior courts hearing such matters
is of long-standing is not necessarily a good reason for keeping
it. As Justice Oliver Wendell Holmes put it, "It is revolting
to have no better reason for a rule of law than that it was laid
down in the time of Henry IV." [Holmes, "The Path of Law,"
Harvard Law Review (1897)] Surely the same could be said of a
rule laid down in 1998, or for that matter in 1911 when the PUC
was created. Whether it is good or bad policy to continue the
existing method of judicial review, there is no question that
the California Constitution gives the Legislature plenary power
"to establish the manner and scope of review of commission
action in a court or record." (California Constitution Article
XII Section 5.)
Procedural concerns that should be considered by the Committee:
In addition to the larger substantive policy question, the
Committee should also note that the bill in print raises a
number of procedural questions as well. For example, the bill
allows the aggrieved party may file a "written petition" to
obtain a "review of the order." Existing law, Public
Utilities Code Section 1759(b), specifies that the appropriate
action is a "writ of mandamus" pursuant to Section 1085 of the
Code of Civil Procedure. Also, existing Sections 1757 and
1757.1 set forth the scope of the appellate court's review. In
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short, if this bill moves forward, the author may wish to
address both the form of action and the scope of review with
greater specificity.
Another issue which the Committee may wish to consider is the
author's decision to restrict review to the superior courts of
Los Angeles and San Francisco. The author's office has informed
the Committee that these two courts are the largest and will
most likely have judges with the expertise to hear these
matters. However, the Judicial Council has expressed concern
to the Committee that limiting the review to just these two
courts may substantially increase the workload of each. Also,
reliance on these two courts is more limited, geographically,
than the four district Courts of Appeal. It is also unclear
whether the author intends the San Francisco and Los Angeles
Superior Courts to be the exclusive choice, or if a party
challenging a PUC decision could still file a petition directly
to one of the Courts of Appeal. Because the bill eliminates
existing provisions setting forth the process for appealing to
the Court of Appeal and the Supreme Court, then under the bill
that would no longer be an option. But it is not entirely clear
if that is the author's intent. Presumably, a party could
appeal a superior court decision to the Court of Appeal, but the
bill in print does not expressly provide for that.
Author Indicates Willingness to Continue Working on Judicial
Review Process: The author has informed the Committee that he
recognizes that the bill in print needs to be fleshed out with
more procedural details. If the bill moves forward, the author
has indicated a willingness to continue working with the
Judicial Council, this Committee, and other stakeholders.
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ARGUMENTS IN SUPPORT: According to the author, recent media
reports "have revealed a lack of transparency in decisions by
the California Public Utilities Commission. Transparency in how
public agencies make decisions remains a fundamental principle
in California law and government. Assembly Bill 825 seeks to
increase transparency in Commission decisions in regulating
public utilities." The author believes that the bill achieves
this in three ways in particular. First, the bill "makes
transparency a priority for commission activities, and gives the
'Public Advisor' responsibility for ensuring that transparency,
with tools such as the commission website. The website will
include certain summary information on energy procurement and
utility rate increase applications." Second, the author will
require "the commission to re-examine its confidentiality
policies in light of the statutory priority for transparency. It
also recognizes that certain information that already is public
cannot be presumed confidential." Third, the author argues that
"AB 825 accomplishes fundamental change in the way that courts
review commission decisions, by allowing lawsuits against the
commission in the Superior Court in either San Francisco or Los
Angeles, instead of just in appellate courts as the law now
provides."
The bill is supported by labor, consumer, and environmental
groups for substantially the same reasons, though these bills
have not weighed in on the changes in the judicial review
process.
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TURN (The Utility Reform Network) supports this bill for many of
the above reasons; however, it seeks an amendment that would
apply the confidentiality provisions to any party involved in
the electricity market or other utility service, not just the
regulated utilities.
Letter of Concern: Although the California Cable &
Telecommunications Association (CCTA) does not oppose this bill,
it has submitted a letter expressing concern and requesting
amendments. In particular, CCTA believes that some of the
changes that this bill proposes as to how the PUC handles
confidential information is problematic, especially as to
"competitively sensitive" information that may be contained in
audit reports. For example, CCTA argues that an Administrative
Law Judge or commissioner should not require, as this bill seems
to do, "a hearing on every motion for release of confidential
information if a review of the information clearly shows that
the information on its face is confidential." CCTA argues
that the burden of proof should be on the person claiming that
the document shall not be maintained as confidential.
REGISTERED SUPPORT / OPPOSITION:
Support
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California Teamsters Public Affairs Council
Citizens Oversights Projects
Engineers & Scientists of California
IFPTE Local 20 AFL-CIO
Utility Workers Union of America, AFL-CIO
Sierra Club
TURN (The Utility Reform Network) (If amended)
Concern
California Cable & Telecommunications Association
Opposition
None on file
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Analysis Prepared by:Thomas Clark / JUD. / (916) 319-2334