BILL ANALYSIS                                                                                                                                                                                                    Ó



          SENATE COMMITTEE ON ENERGY, UTILITIES AND COMMUNICATIONS
                              Senator Ben Hueso, Chair
                                2015 - 2016  Regular 

          Bill No:          AB 1023           Hearing Date:    7/13/2015
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          |Author:    |Rendon                                               |
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          |Version:   |4/20/2015    As Amended                              |
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          |Urgency:   |No                     |Fiscal:      |Yes             |
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          |Consultant:|Nidia Bautista                                       |
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          SUBJECT:  Public Utilities Commission: proceedings: ex parte  
          communications

            DIGEST:    This bill requires the California Public Utilities  
          Commission to establish and maintain a weekly log that  
          summarizes all ex parte communications between decisionmakers,  
          as defined, and persons with an interest.

          ANALYSIS:
          
          Existing law:

          1)Establishes the California Public Utilities Commission (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)Requires the CPUC to determine whether a proceeding requires a  
            hearing and whether it is quasi-legislative, adjudication or  
            ratesetting.  Provides rules governing each type of  
            proceeding, including prohibiting any substantive  
            communication between a decision maker and a party in  
            adjudicative cases.  (Public Utilities Code §§1701.1 and  
            1701.2)

          This bill:

          1)Requires the CPUC to establish and maintain a weekly  







          AB 1023 (Rendon)                                   Page 2 of ?
          
          
            communications log summarizing all oral or written ex parte  
            communications for quasi-legislative, rate-setting and  
            adjudicative proceedings.

          2)Requires the communications log to include a summary of oral  
            and written ex parte communications between a person with an  
            interest in a matter before the CPUC and a commissioner,  
            advisor to a commissioner, the executive director of the CPUC,  
            a deputy executive director, director of a division not acting  
            as a party, or an administrative law judge. 

          3)Requires that each communication log entry include the date of  
            each communication, the persons involved, and any proceedings  
            that were subject of each communication. 

          4)Requires the CPUC to make the log available on its website.

          Background

          Ex parte communications.  Substantive communication outside of  
          the public record that occurs between a decisionmaker and a  
          party with an interest in a CPUC proceeding are known as "ex  
          parte" communications.  Statute recognizes that ex parte  
          communications can conflict with the need for public decision at  
          the CPUC.  Current law directs the CPUC to adopt regulations  
          requiring reporting of ex parte communications.  The regulations  
          are to require the interested party to report the communication  
          within three working days of the communication and include:
                       
                 The date, time, and location of the communication, and  
               whether it was oral, written, or a combination.

                 The identity of the recipient and the person initiating  
               the communication, as well as the identity of any persons  
               present during the communication.

                 A description of the party's, but not the  
               decisionmaker's, communication and its content.

          Statute does not require a CPUC decisionmaker to report ex parte  
          communication with an interested party. 

          Statute directs CPUC to identify each of its proceedings  
          according to one of three categories - adjudicatory,  
          quasi-legislative, and ratesetting - and provides ex parte rules  








          AB 1023 (Rendon)                                   Page 3 of ?
          
          
          applicable to each type of proceeding.  The types of proceedings  
          and the statutory ex parte rules applicable to each are:

                 Adjudication cases - enforcement cases and complaints,  
               except those challenging the reasonableness of rates or  
               charges.  Statute expressly prohibits ex parte  
               communication related to an adjudicatory proceeding.

                 Quasi-legislative cases - those that establish policy,  
               including, but not limited to, rulemakings and  
               investigations which may establish rules affecting an  
               entire industry.  Statute expressly allows for ex parte  
               communication without restriction in these types of  
               proceedings.

                 Ratesetting cases - cases in which rates are established  
               for a specific company.  Statute expressly prohibits ex  
               parte communication related to ratesetting cases.  However,  
               despite the prohibition, statute provides circumstances in  
               which ex parte communication is permitted and procedures  
               for reporting and managing such communication.

          The CPUC has adopted regulations regarding ex parte  
          communications.  The regulations define ex parte communication  
          as oral or written communication that: (1) concerns any  
          substantive issue in a formal proceeding, (2) takes place  
          between an interested person and a decisionmaker, and (3) does  
          not occur in a public hearing, workshop, or other public forum  
          noticed by ruling or order in the proceeding, or on the record  
          of the proceeding.  The regulations define "decisionmaker" as  
          any commissioner, the chief administrative law judge, any  
          assistant chief administrative law judge, the assigned  
          administrative law judge, or the law and motion administrative  
          law judge.  The ex parte regulations applicable to  
          decisionmakers are also applicable to commissioners'  "personal  
          advisors," with certain exceptions regarding ratesetting  
          proceedings.

          There are inconsistencies between the reference in statute noted  
          in this bill stating one advisor per commissioner and the actual  
          number of personal advisors per commissioner, which is four and  
          five for the president. The author and committee may wish to  
          amend the bill language related to advisors of the commissioners  
          by striking reference to Section 309.1and adding language  
          specifying the policy advisors for each commissioner. 








          AB 1023 (Rendon)                                   Page 4 of ?
          
          

          Prior/Related Legislation
          
            AB 825 (Rendon, 2015) proposes a suite of reforms of the CPUC  
          largely directed at increased transparency of the activities of  
          the agency, including expanding the roles and responsibilities  
          of the public advisor, specifying additional requirements of  
          commissioners, increased transparency of electric utilities'  
          procurement, among others.  The bill is waiting to be heard by  
          the Senate Committee on Appropriations.

          SB 48 (Hill, 2015) proposes a suite of reforms of the CPUC,  
          including modifying the role of the president, meeting location  
          requirements, and other reforms.  The bill is scheduled to be  
          heard July 15th in the Assembly Committee on Appropriations.

          SB 215 (Leno, 2015) proposes a suite of reforms of the CPUC  
          related to governance and operations, including disqualifying  
          commissioners from proceedings, modifying the role of the  
          president, modifying ex parte rules, and other reforms.  The  
          bill was held in this committee after merging much of its  
          contents with SB 660. 

          SB 660 (Leno/Hueso, 2015) proposes a suite of reforms of the  
          CPUC focused on ex parte communications rules, addressing the  
          disqualification of commissioners in proceedings, modifying the  
          powers of the president, and others.  The bill is scheduled to  
          be heard July 13th in the Assembly Committee on Utilities and  
          Commerce.

          FISCAL EFFECT:                 Appropriation:  No    Fiscal  
          Com.:             Yes          Local:          No


          ASSEMBLY VOTES:


          Assembly Floor                                 (74-0)
          Assembly Appropriations Committee                         (17-0)
          Assembly Utilities and Commerce Committee           (15-0)
            
          SUPPORT:  

          Sierra Club California









          AB 1023 (Rendon)                                   Page 5 of ?
          
          
          OPPOSITION:

          None received 

          ARGUMENTS IN SUPPORT:  In recent months, revelations have shown  
          a pattern of informal and private contacts by CPUC members with  
          regulated entities. On October 18, 2014, the CPUC's executive  
          director established a policy that requires high-level CPUC  
          personnel and asks commissioners, advisors, and the chief  
          administrative law judge to provide a communication log  
          summarizing oral and written communications that occur between  
          CPUC personnel and interested parties in adjudicatory and rate  
          setting proceedings.  AB 1023 codifies this new CPUC policy.
          
          

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