Amended in Senate September 4, 2015

Amended in Senate September 1, 2015

Amended in Senate August 18, 2015

Amended in Assembly April 30, 2015

Amended in Assembly March 24, 2015

California Legislature—2015–16 Regular Session

Assembly Bill No. 853

Introduced by Assembly Member Roger Hernández

February 26, 2015

An act to add Section 764 to the Public Utilities Code, relating to energy.

LEGISLATIVE COUNSEL’S DIGEST

AB 853, as amended, Roger Hernández. Electrical and gas corporations: security of plant and facilities.

Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including electrical corporations and gas corporations, as defined. If the commission finds after a hearing that the rules, practices, equipment, appliances, facilities, or service of any public utility, or of the methods of manufacture, distribution, transmission, storage, or supply employed by the public utility, are unjust, unreasonable, unsafe, improper, inadequate, or insufficient, the Public Utilities Act requires that the commission determine and, by order or rule, fix the rules, practices, equipment, appliances, facilities, service, or methods to be observed, furnished, constructed, enforced, or employed. The Public Utilities Act requires the commission to prescribe rules for the performance of any service or the furnishing of any commodity of the character furnished or supplied by any public utility and, on proper demand and tender of rates, require the public utility to furnish the commodity or render the service within the time and upon the conditions provided in the rules adopted by the commission.

This bill would, on and after the filing of an electrical corporation’s or gas corporation’s general rate case application, require that electrical corporation or gas corporation, except as provided, to utilize employees of that corporation for any work associated with the design, engineering, and operation of its nuclear, electrical, and gas infrastructure, including all computer and information technology systems, unless the utility files a request to begin delete employ end delete begin insert contract to utilize end insert persons begin delete that are not end delete begin insert who will replace those end insert employees with the commission as a part of the utility’s general rate case application. The bill would require that the request be a separate stand-alone section that is not embedded in the general requested staffing change proposals. The bill would require the utility to demonstrate that the work can be performed safely and securely, and without jeopardizing the security of its nuclear, electrical, and gas begin delete infrastructure, by persons that are not employees. end delete begin insert infrastructure. end insert The bill would require the commission to evaluate the utility’s begin delete proposal to utilize persons that are not employees. end delete begin insert proposal. end insert The bill would require the commission to issue a written begin delete decision, end delete begin insert decision to approve or deny the request end insert as part of the general rate case begin delete proceeding, determining whether the electrical corporation or gas corporation may utilize persons that are not employees for the described work. end delete begin insert proceeding. 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 the 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.  

The Legislature finds and declares all of the
following:

(a) Protecting the security of nuclear, electrical, and natural gas
utility systems is a paramount state interest.

(b) Protecting the privacy of ratepayers’ personal information,
including usage information, is a paramount state interest.

(c) Recent intrusions into major corporate computer systems,
including Sony and Anthem Blue Cross, and the theft of
information from those systems have demonstrated the
vulnerability of those systems.

(d) The computer systems of California’s electrical corporations
and gas corporations have information about the design,
engineering, and operation of the nuclear, electrical, and natural
gas utility infrastructure, as well as personal information about
California ratepayers. This information could be used to
compromise the security of California’s utility infrastructure and
the privacy of California’s ratepayers.

(e) Widespread deployment of smart meters, smart grid
equipment, and microgrids increases the importance of protecting
the computer systems of electrical corporations and gas
corporations.

(f) The part of any computer system that is most vulnerable to
being compromised is the personnel who operate that system.

(g) Electrical corporations and gas corporations should make
every reasonable effort to protect their computer systems from
unauthorized intrusions.

(h) To protect the security of electrical and natural gas utility
computer systems, including nuclear infrastructure, the information
technology personnel who operate those systems should be
employees of the electrical corporation or gas corporation.

(i) To protect the security of nuclear, electrical, and gas utility
infrastructure, the design, engineering, and operation of that
infrastructure should, to the extent feasible, be performed by
employees of the electrical corporation or gas corporation.

SEC. 2.  

Section 764 is added to the Public Utilities Code, to
read:

764.  

(a) An electrical corporation or gas corporation shall
utilize employees of the electrical corporation or gas corporation
for any work associated with the design, engineering, and operation
of its nuclear, electrical, and gas infrastructure, including all
computer and information technology systems, unless the utility
complies with the requirements of this section and obtains the
approval of the commission pursuant to this section.

(b) Before begin delete utilizing end delete begin insert contracting to utilize end insert persons begin delete that are not end delete
begin insert who will replace end insert employees of the electrical corporation or gas
corporation for begin delete work end delete begin insert the same work end insert begin insert performed by those employees end insert
begin insert that is end insert associated with the design, engineering, and operation of
its nuclear, electrical, and gas infrastructure, including all computer
and information technology systems, an electrical corporation or
gas corporation shall file a request to begin delete employ end delete begin insert contract with those end insert
persons begin delete that are not end delete begin insert who will replace those end insert employees with the
commission, as part of the utility’s general rate case application.
The request shall be a separate stand-alone section that is not
embedded in the general requested staffing change proposals. The
utility shall demonstrate that the work can be performed safely
and securely, and without jeopardizing the security of its nuclear,
electrical, and gas infrastructure.

(c) The commission shall evaluate the utility’s proposal begin delete to utilize
persons that are not employees of the electrical corporation or gas
corporation for work associated with the design, engineering, and
operation of its nuclear, electrical, and gas infrastructure, including
all computer and information technology systems. end delete begin insert described in
subdivision (b). end insert

(d) The commission shall issue a written decision begin insert to approve
or deny the proposal described in subdivision (b) end insert as part of the
general rate case begin delete proceeding determining whether the electrical
corporation or gas corporation may utilize persons that are not
employees of the electrical or gas corporation for the described
work. end delete begin insert proceeding. end insert

(e) A person or corporation owning or operating a qualifying
facility pursuant to federal law or a facility that is an exempt
wholesale generator is not an electrical corporation due to the
ownership or operation of that facility. This subdivision is
declaratory of existing law.

(f) The requirements of this section are applicable only to
electrical corporations or gas corporations that file general rate
cases with the commission.

(g) (1) This section does not apply to an electrical corporation
or gas corporation contracting out construction, alteration,
demolition, installation, maintenance, or repair work on its nuclear,
electrical, or gas infrastructure.

(2) This section does not apply to the design and engineering
of standard equipment purchased from an outside vendor.

begin insert

(3) This section does not apply to supplemental work performed
by a third party in response to an emergency.

end insert begin insert

(4) This section does not apply to the design, engineering, or
construction work associated with existing or new electrical or
gas utility infrastructure necessary to accommodate or serve state
transportation infrastructure projects.

end insert begin insert

(5) Nothing in this section shall be construed to alter the
requirements of Article 5 (commencing with Section 8281) of
Chapter 7 of Division 4.

end insert begin delete

(3)

end delete

begin insert ( end insert begin insert 6) end insert  For each electrical or gas corporation, this section shall
become effective for that corporation upon the filing, on or after
January 1, 2016, of that corporation’s general rate case application.

SEC. 3.  

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.