BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 895|
|Office of Senate Floor Analyses | |
|(916) 651-1520 Fax: (916) | |
|327-4478 | |
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THIRD READING
Bill No: AB 895
Author: Rendon (D)
Amended: 9/4/15 in Senate
Vote: 21
SENATE ENERGY, U. & C. COMMITTEE: 10-0, 6/30/15
AYES: Hueso, Fuller, Cannella, Hertzberg, Hill, Lara, Leyva,
McGuire, Morrell, Pavley
NO VOTE RECORDED: Wolk
SENATE APPROPRIATIONS COMMITTEE: 5-0, 8/27/15
AYES: Lara, Beall, Hill, Leyva, Mendoza
NO VOTE RECORDED: Bates, Nielsen
ASSEMBLY FLOOR: 79-0, 6/1/15 - See last page for vote
SUBJECT: Utility rate refunds: energy crisis litigation:
Public Utilities Commission: judicial review
SOURCE: Author
DIGEST: This bill allows actions to be brought in superior
court to enforce against the California Public Utilities
Commission (CPUC) the provisions of the Bagley-Keene Open
Meeting Act and the Public Records Act. This bill prospectively
allows the Attorney General (AG) or the CPUC to enter into an
energy settlement agreement only on a monetary basis. This bill
also prohibits the CPUC from distributing or expending the
proceeds of claims recovered by the CPUC in any litigation or
settlement to obtain ratepayer recovery for the effects of the
2000-02 energy crisis, and requires the proceeds of any claims
arising from that crisis be deposited into the Ratepayer Relief
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Fund for appropriation by the Legislature.
Senate Floor Amendments of 9/4/15 seek to relax limitations on
judicial review of CPUC actions related to the Bagley-Keene Open
Meeting Act or the Public Records Act.
ANALYSIS:
Existing law:
1)Establishes the CPUC with five members appointed by the
Governor and confirmed by the Senate and empowers it to
regulate privately owned public utilities in California.
Specifies that the Legislature may prescribe that additional
classes of private corporations or other persons are public
utilities. (Article XII of the California Constitution;
Public Utilities Code §301 et seq.)
2)Provides that only the California Supreme Court and the court
of appeal may review appeals of CPUC decisions. (Public
Utilities Code §1701.6)
3)Requires state agencies to conduct business via open public
meetings, as described in Bagley-Keene Open Meeting Act.
(Government Code § 11120 et seq.)
4)Requires state and local agencies to generally make public
documents available upon request, as described in the Public
Records Act. (Government Code § 6250 et seq.)
5)Establishes the Ratepayer Relief Fund in the State Treasury to
benefit electricity and natural gas ratepayers, and to fund
investigation and litigation costs of the state in pursuing
allegations of overcharges and unfair business practices.
(Government Code §16428.15)
6)Requires that any energy settlement agreement direct
settlement funds to the following purposes in priority order:
(a) to reduce ratepayer costs of those utility ratepayers
harmed by the actions of the settling parties; and (b) for
deposit in the Ratepayer Relief Fund. (Government Code
§16428.3)
7)Authorizes funds deposited in the Ratepayer Relief Fund to be
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appropriated by the Legislature for purposes that benefit
ratepayers. (Government Code §16428.3)
This bill:
1)Provides that actions to enforce the requirements of the
Bagley-Keene Open
Meeting Act or the Public Records Act against the CPUC may be
brought in superior court.
2)Prohibits the CPUC from distributing or expending the proceeds
of claims in any litigation or settlement to obtain ratepayer
recovery for the effects of the 2000-02 energy crisis.
3)Requires the proceeds of any claims arising from that crisis
be deposited into the Ratepayer Relief Fund for appropriation
by the Legislature.
Background
Limits on legal challenge to CPUC actions. The CPUC was
established to act with considerable independence. One example
of this independence is a limit on the ability of a party to
challenge in court an action of the CPUC. Specifically, statute
allows only the state Supreme Court and the court of appeal to
affect a decision of the CPUC.
The CPUC is subject to the Bagley-Keene Open Meeting Act. The
Act requires a state body to take "action" (collective decision
or an actual vote) only at a public meeting following the public
posting of an agenda describing the item for proposed action at
least 10 days prior to the meeting. Any private congregation of
a majority of the members of a state body at the same time and
place to hear, discuss, or deliberate upon any item that is
within its jurisdiction is unlawful. Violations of the Act can
result in members of the state body facing misdemeanor penalties
and action taken rendered invalid, with attorney's fees awarded
to prevailing plaintiffs.
The CPUC is also subject to the Public Records Act. Generally,
the Act requires a state or local agency, upon request, to make
records available to any person upon payment of fees to cover
the costs of providing the records. There are many specific
exemptions to the general requirement.
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Amendments made in the most recent version of this bill
expressly authorizes actions to enforce the Bagley-Keene Open
Meeting Act or the Public Records Act to be brought in superior
court.
Electricity crisis litigation. In the latter half of the 1990s,
the state restructured its electricity markets to provide more
competition. These efforts were codified in AB 1890 (Brulte,
Chapter 854, Statutes of 1996). Soon thereafter, in 2000 and
2001, the state experienced extraordinary wholesale electricity
prices in what has become known as the California electricity
crisis. Pacific Gas and Electric declared bankruptcy; Southern
California Edison nearly did so.
Subsequent investigation revealed numerous instances of illegal
market manipulation on the part of electricity suppliers. The
state - through the CPUC and the now-defunct Energy Oversight
Board and, subsequently, the AG - has been party to litigation
related to the energy crisis. The U.S. Supreme Court recently
ruled that energy companies can be sued under state antitrust
laws for illegally manipulating natural gas prices during
California's 2000-2002 energy crisis. As a result, there will
likely be additional claims relating to the energy crisis, as
well as, potentially, additional judgments and settlements that
compensate the state.
In the past, proceeds of claims arising from the energy crisis
have been handled differently. In some instances, the CPUC has
directed settlement monies be returned directly to ratepayers.
In one instance, however, the CPUC settled with parties to allow
in-kind payments to fund installation of electric vehicle
charging infrastructure.
This bill allows the AG or CPUC to enter into an energy
settlement agreement only on a monetary basis and expressly
prohibits nonmonetary compensation in lieu of monetary
compensation. This provision applies only to settlement
agreements entered into before January 1, 2016. Finally, this
bill requires that the proceeds of any claims arising from that
crisis be deposited into the Ratepayer Relief Fund for
appropriation by the Legislature and specifies that the
requirement does not apply to claims brought by an electrical
corporation that arise from the energy crisis.
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Prior/Related Legislation
AB 1890 (Brulte, Chapter 854, Statutes of 1996) established a
competitive deregulated electricity market in California.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: No
According to the Senate Appropriations Committee:
Increased revenues, potentially in the billions of dollars, to
the Ratepayer Relief Fund (special).
Potential costs to the General Fund for litigation costs for
the AG and the Department of Water Resources (DWR) associated
with energy crisis.
Unknown costs to the state, as a ratepayer, (General Fund and
various special funds) to the extent that settlement monies
are not deposited in the Electric Power Fund to repay bonds
and long-term power contracts entered into by DWR.
Potential impacts to settlement amounts.
SUPPORT: (Verified9/4/15)
California Manufacturers & Technology Association
Office of Ratepayer Advocates
The Utility Reform Network
OPPOSITION: (Verified9/4/15)
None received
ARGUMENTS IN SUPPORT: The author and proponents contend that
the ratepayers should directly benefit from any proceeds
resulting from litigation related to the energy crisis. This
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bill helps ensure this benefit occurs, unless the Legislature -
rather than the CPUC - determines the money should be used for
other purposes.
ASSEMBLY FLOOR: 79-0, 6/1/15
AYES: Achadjian, Alejo, Travis Allen, Baker, Bigelow, Bloom,
Bonilla, Bonta, Brown, Burke, Calderon, Campos, Chang, Chau,
Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle, Daly,
Dodd, Eggman, Frazier, Beth Gaines, Gallagher, Cristina
Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez,
Gordon, Gray, Grove, Hadley, Harper, Roger Hernández, Holden,
Irwin, Jones, Jones-Sawyer, Kim, Lackey, Levine, Linder,
Lopez, Low, Maienschein, Mathis, Mayes, McCarty, Medina,
Melendez, Mullin, Nazarian, Obernolte, O'Donnell, Olsen,
Patterson, Perea, Quirk, Rendon, Ridley-Thomas, Rodriguez,
Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting,
Wagner, Waldron, Weber, Wilk, Williams, Wood, Atkins
NO VOTE RECORDED: Brough
Prepared by:Jay Dickenson / E., U., & C. / (916) 651-4107
9/8/15 20:56:32
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