BILL ANALYSIS Ó
AB 825
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GOVERNOR'S VETO
AB
825 (Rendon and Mark Stone)
As Enrolled September 16, 2015
2/3 vote
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|ASSEMBLY: |79-0 |(June 3, 2015) |SENATE: |40-0 |(September 10, |
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|ASSEMBLY: |79-0 |(September 11, | | | |
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Original Committee Reference: U. & C.
SUMMARY: Proposes reforms to governance and operations at the
California Public Utilities Commission (CPUC) to increase
transparency and oversight over the activities of the CPUC.
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The Senate amendments do the following:
1)Clarify that the Inspector General for the CPUC takes
direction from the State Auditor, and provides funding for the
Inspector General upon appropriation.
2)Delete provisions treating certain categories of documents as
public.
3)Clarify the process for allowing parties to challenge
confidentiality of documents in CPUC proceedings.
4)Clarify the role of the CPUC public advisor at the CPUC.
5)Establish "all party conferences" as part of the hearing
process for commissioners.
6)Require public comments at hearings to be incorporated into
the hearing's evidentiary records.
7)Require commissioners to hold public office hours and attend
all hearings.
8)Require the CPUC's public advisor to update and maintain the
CPUC's service of process lists.
9)Prohibit a CPUC attorney who prosecutes an action before the
CPUC from meeting with a commissioner without all parties
present.
10) Delete prohibition on reassignment of CPUC staff without
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statutory authority.
11) Delete requirement that internal CPUC auditors report
directly to CPUC.
12) Make additional technical and clarifying changes.
EXISTING LAW:
1)Establishes the CPUC with five members appointed by the
Governor and confirmed by the Senate, empowers it to regulate
privately-owned public utilities in California, and specifies
that the Legislature may prescribe additional classes of
private corporations or other persons as public utilities.
(California Constitution Article XII and Public Utilities Code
Section 301)
2)Requires the CPUC to provide public copies of the agenda and
related items prior to the start of any voting meeting of
commissioners, and publish specified documents on the
Internet. (Public Utilities Code Section 311.5)
3)Prohibits any information furnished to the CPUC by a public
utility, or any business which is a subsidiary or affiliate of
a public utility, or a corporation which holds a controlling
interest in a public utility, except those matters
specifically required to be open to public inspection, as
specified, from being open to public inspection or made
public, except on order of the CPUC, or by the CPUC or
commissioner in the course of a hearing or proceeding.
(Public Utilities Code Section 583)
4)Establishes the office of the public advisor, and requires the
CPUC to appoint a public advisor in order to assist members of
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the public and ratepayers who desire to testify before or
present information to the CPUC in any hearing or proceeding,
and advise the CPUC on procedural matters relating to public
participation in proceedings. Provides that the CPUC can
employ staff as necessary to carry out the duties of the
office of public advisor. (Public Utilities Code Section 321)
5)Requires the CPUC to determine whether a proceeding requires a
hearing, and to determine whether the matter requires a
quasi-legislative, adjudication, or a ratesetting hearing, and
to establish regulations regarding ex parte communication on
case categorization issues. (Public Utilities Code Section
1701.1)
FISCAL EFFECT: According to the Senate Appropriations
Committee, this bill would have the following costs:
1)Ongoing costs of at least $170,000 and up to $1 million to
increase the amount of information available on the CPUC Web
site.
2)Ongoing costs of approximately $200,000 for the public advisor
to have independent responsibility over the CPUC Web site.
3)Unknown costs to post the transcripts of documents, evidence,
testimony, and proceedings online.
4)One-time costs of $157,000 annually for two years for a
proceeding to reopen its confidentiality practices.
5)Ongoing costs of $626,000 annually for hearings to consider
motions to make confidential documents public.
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6)Unknown costs to require that the assigned commissioner attend
all hearings in a proceeding.
7)Ongoing costs between $450,000 and $850,000 to appoint an
inspector general from the State Auditor's office to the CPUC.
8)Ongoing costs of $220,000 annually to provide legal staff at
the public advisor's office to ensure compliance with the
Public Records Act and the Bagley-Keene Open Meeting Act.
These costs may be offset by reduced workload in other CPUC
divisions to oversee compliance.
COMMENTS:
1)Author's Statement: "Transparency in how government makes its
decisions remains a critical link to gaining the public's
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)Background: The CPUC is governed by five full-time
commissioners appointed by the Governor and confirmed by the
State Senate. Commissioners are appointed for six-year terms
and can only be removed by the Legislature. Beginning in
2014, Pacific Gas & Electric began releasing over 65,000
emails from a five-year period. The emails revealed a culture
of secrecy within the CPUC. Many of the emails exposed
regular private communications between CPUC commissioners and
staff with regulated entities on subjects the CPUC was
deliberating within a number of proceedings, many of which
arguably violated CPUC's rules governing ex parte
communications, including emails pertaining to the selection
of Administrative Law Judges (ALJs) for ratesetting cases.
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3)CPUC Transparency and Oversight: Recently, the CPUC has
undergone a number of audits that has raised concerns about
the ability of the CPUC to manage even some of its core
functions. In response, the CPUC established an Internal
Audit Unit, overseen by a chief internal auditor, to perform
audits of the CPUC's internal controls and management,
oversees its organizational risk assessment and enterprise
risk management, and provides consulting services to assist
CPUC operations. In addition, current law establishes the
Public Advisor's Office, which provides procedural information
and advice to individuals and groups who want to participate
in formal CPUC proceedings. The office also informs the CPUC
of any barriers that prevent effective public participation.
This bill requires the State Auditor to appoint an inspector
general to conduct oversight review and assess, audit,
investigate, and report on the policies, practices, and
procedures of the CPUC, as specified. In addition, the bill
tasks the public advisor of the CPUC with the responsibility
of ensuring that the activities of the CPUC are transparent to
the public, as specified. Furthermore, to promote greater
transparency, the bill requires the CPUC to post specified
information on its website regarding electricity procurement
contracts, pending proceedings, non-confidential documents,
Public Records Act requests, and advice letters.
4)Confidentiality: Current law prohibits any information
furnished to the CPUC by a public utility, as specified,
except those matters specifically required to be open to
public inspection, as specified, from being open to public
inspection or made public, except on order of the CPUC, or by
the CPUC or commissioner in the course of a hearing or
proceeding. As a result, regulated utilities argue that there
exists a presumption that information is confidential unless a
commissioner, on a case-by-case basis, decides it is not.
This bill creates a specified process that provides parties to
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a proceeding with the ability to contest claims of
confidentiality by filing a motion to make the information
public, and requires the assigned ALJ or commissioner to make
written findings and conclusions.
GOVERNOR'S VETO MESSAGE:
These bills include various provisions to increase transparency
and accessibility to the Public Utilities Commission. I support
the intent of these bills and many of their proposed reforms,
however some additional work is needed to ensure that they
achieve their intended purposes and can be effectively
implemented.
Allowing Bagley-Keene and Public Records Act lawsuits to be
brought against the Commission by any interested party in
Superior Court, rather than exclusively in the Courts of Appeal
and the California Supreme Court, will only result in increased
litigation and likely delay Commission decision-making. It will
not improve public access to critical information about the
actions of regulated entities. Amending Section 583 of the
Public Utilities Code to require more information to be publicly
available is a much better way to ensure that the public is
provided with this information.
Moreover, the Commission needs sufficient funds to fully
accomplish some of these reforms, such as holding more public
meetings outside of San Francisco, shortening the timeframe for
concluding formal ratesetting and quasi-legislative proceedings
and expanding the scope of the information required to be posted
on the CPUC's Web site. I am directing the Commission to work
with the Legislature through the budget process to ensure the
necessary funds are dedicated to accomplish these needed
reforms.
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Analysis Prepared by:
Edmond Cheung / U. & C. / (916) 319-2083 FN:
0002517