BILL ANALYSIS Ó
AB 825
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ASSEMBLY THIRD READING
AB
825 (Rendon and Mark Stone)
As Amended June 1, 2015
Majority vote
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|Committee |Votes |Ayes |Noes |
| | | | |
| | | | |
|----------------+------+--------------------+----------------------|
|Utilities |14-0 |Rendon, Patterson, | |
| | |Achadjian, Bonilla, | |
| | |Burke, Dahle, | |
| | |Eggman, | |
| | | | |
| | | | |
| | |Cristina Garcia, | |
| | |Hadley, Obernolte, | |
| | |Quirk, Santiago, | |
| | |Ting, Williams | |
| | | | |
|----------------+------+--------------------+----------------------|
|Judiciary |10-0 |Mark Stone, Wagner, | |
| | |Alejo, Chau, Chiu, | |
| | |Gallagher, Cristina | |
| | |Garcia, Holden, | |
| | |Maienschein, | |
| | |O'Donnell | |
| | | | |
|----------------+------+--------------------+----------------------|
|Appropriations |17-0 |Gomez, Bigelow, | |
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| | |Bonta, Calderon, | |
| | |Chang, Daly, | |
| | |Eggman, Gallagher, | |
| | | | |
| | | | |
| | |Eduardo Garcia, | |
| | |Gordon, Holden, | |
| | |Jones, Quirk, | |
| | |Rendon, Wagner, | |
| | |Weber, Wood | |
| | | | |
| | | | |
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SUMMARY: Modifies various statutes governing the operation of the
California Public Utilities Commission (CPUC). This bill imposes
new requirements to increase the transparency of the CPUC
decision-making and changes the process of the judicial review of
CPUC decisions. Specifically this bill:
1)Prohibits the CPUC from reassigning any staff from duties or
activities authorized by statute to other duties or activities
unless authorized by the Legislature. Requires the CPUC's
internal auditor to report directly to the commission.
2)Deletes the requirement to furnish reports of the inspections
and audits and other pertinent information to the Board of
Equalization (BOE), and instead requires the information to be
posted on the CPUC's Internet Web site.
3)Requires each public utility submitting a rate change
application to include, and electronically post, a summary that
can be easily understood as specified.
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4)Requires a public utility, subsidiary, affiliate, or holding
company seeking to confidentially file a document in a CPUC
proceeding to also file a public version that allows any other
party to the proceeding to understand the nature of its
contents. Authorizes any party to the proceeding to file a
motion to make any document filed under the claim of
confidentiality public. Requires an administrative law judge
assigned to the proceeding or the assigned Commissioner to hold
a hearing to determine if the document should be made public.
5)Requires CPUC to post on its Internet Web site a summary of all
electricity procurement contracts entered into by an electrical
corporation during the previous three years, the expenses CPUC
approved as just and reasonable, and a list of all public
utilities with pending rates-setting cases with specified
information in summary form.
FISCAL EFFECT: According to the Appropriations Committee, total
annual increased CPUC costs of approximately $2.5 million (special
fund):
a) Prohibition on reassignment,
b) Internal Auditor reports to Commissioners,
c) Confidentiality motions and hearings, and
d) Confidentiality proceeding.
COMMENTS:
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1)Purpose. According to the author, recent media reports on the
CPUC have lessened the public's trust in the Commission, in
part, by showing the Commission's decision-making process lacked
transparency, with some deals done in private meetings with
investor-owned utility representatives. This bill will improve
transparency and increase public trust.
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
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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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report provides relatively little information to
inform the Legislature about potential changes to
the level or distribution of resources provided to
CPUC.
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 CPUC has not always
complied with the requirement to audit utilities' books and
records according to the schedule prescribed by state law. The
Auditor also found that for over three decades, it has not
provided the results of these audits to the California State
Board of Equalization for tax assessment purposes, as required
by state law.
This bill would eliminate the requirement that the audits be
provided to California State Board of Equalization and instead
require that they be posted on the CPUC Web site.
4)Rate Change Proposals. Currently, most utilities provide this
information on their Web sites, 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
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<2> https://www.auditor.ca.gov/pdfs/reports/2013-109.pdf
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the CPUC.
5)Transparency and Confidentiality Provisions: The transparency
provisions of this bill fall roughly into two categories.
First, this bill requires the CPUC to post on its Web site
certain documents pertaining to, or submitted by, regulated
entities. For example, existing law requires the CPUC to
periodically inspect and audit the books of regulated entities
and submit reports of these investigations to the BOE. This
bill would instead require these reports to be posted on the
CPUC Web site. This bill also provides that when a regulated
entity submits an application for a rate change, the application
shall be reduced to a plain-language summary and posted on the
PUC Web site. Second, this bill alters existing rules on
documents submitted to the CPUC under claims of confidentiality.
For example, under this 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, this 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 CPUC and information submitted by a government
entity that is available to the public from that entity.
Analysis Prepared by:
Sue Kateley / U. & C. / (916) 319-2083 FN:
0000827
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