BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
AB 853 (Roger Hernández) - Electrical and gas corporations:
security of plant and facilities.
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|Version: August 18, 2015 |Policy Vote: E., U., & C. 7 - 3 |
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|Urgency: No |Mandate: Yes (see staff |
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|Hearing Date: August 24, 2015 |Consultant: Marie Liu |
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This bill meets the criteria for referral to the Suspense File.
Bill
Summary: AB 853 would require the California Public Utilities
Commission (CPUC) to evaluate and consider approval of an
electrical or gas corporation's utilization of persons not
employed by the utility as part of that utility's general rate
case application.
Fiscal
Impact: At least $200,000 from the Public Utilities
Reimbursement Account (special) to consider advice letters or
GRC petitions to allow the use of contract works.
Background: Existing law establishes the CPUC to regulate privately-owned
public utilities in California including the setting of rates.
Requests to recover monies for distribution and generation costs
from ratepayers are considered through a general rate case
AB 853 (Roger Hernández) Page 1 of
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(GRC). GRCs are major regulatory proceedings and provide the
CPUC an opportunity to perform an exhaustive examination of a
utility's operations and costs. Usually performed every three
years, the GRC allows the CPUC to conduct a broad and detailed
review of a utility's revenues, expenses, and investments in
plant and equipment to establish an approved revenue
requirement. Through the GRC a utility forecasts how they will
structure their operations and make investments for the next
three years.
Proposed Law:
This bill would require an electrical corporation or gas
corporation (IOU) to use direct employees 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 it obtains
written approval from the CPUC.
An IOU must request approval for the use of non-direct employees
through the utility's GRC in a separate stand-alone section. The
IOU would be required to demonstrate that the work can be
performed safely and securely and without jeopardizing the
security of its nuclear, electrical, and gas infrastructure. The
commission would be required to issue a written decision as part
of the GRC that determines whether the utility can utilize
non-direct employees.
Staff
Comments: Given the wide scope of the work that would require
approval from the CPUC should non-direct employees be used, the
CPUC assumes that every GRC would contain a review of the use of
non-direct employees. To perform the additional review, the CPCU
anticipates needing approximately $200,000 annually.
Staff notes that the CPUC estimate may be considered a minimum.
GRCs are typically considered every three years. This bill does
not offer a process for which a utility could seek approval for
the use of non-direct employees for work that was unanticipated
at the time of the last GRC, including emergency work. A utility
could file a Petition to Modify a previous GRC decision, which
would result in workload not anticipated in the CPUC's estimate.
Also, there may be additional costs to the extent that the
AB 853 (Roger Hernández) Page 2 of
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requests to use non-direct employees result in extra complaints,
data requests, and other motions. It is unclear to the extent
the CPUC's estimates take into account these costs.
This bill contains codified findings and declarations. In the
interest of code clarity and efficiency, staff recommends this
bill be amended to place the findings and declarations in an
uncodified section of the bill.
This bill amends the Public Utilities Code. As violations of the
PUC are crimes, this bill modifies crimes thereby creating a
local mandate. However, under the California Constitution, such
mandates are not reimbursable.
Proposed Author
Amendments: The author has submitted amendments past the
amendment deadline that would exclude the construction,
alteration, demolition, installation, maintenance, or repair
work on its nuclear, electrical, or gas infrastructure from the
requirements of this bill. Also excluded from the requirement
would be the design and engineering of standard equipment
purchased from an outside vendor. The amendments would also make
the requirements effective with the next GRC for each utility.
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