BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | AB 1023| |Office of Senate Floor Analyses | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- THIRD READING Bill No: AB 1023 Author: Rendon (D) Amended: 9/4/15 in Senate Vote: 21 SENATE ENERGY, U. & C. COMMITTEE: 11-0, 7/13/15 AYES: Hueso, Fuller, Cannella, Hertzberg, Hill, Lara, Leyva, McGuire, Morrell, Pavley, Wolk SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8 ASSEMBLY FLOOR: 74-0, 5/22/15 (Consent) - See last page for vote SUBJECT: Public Utilities Commission: proceedings: ex parte communications SOURCE: Author DIGEST: This bill requires the California Public Utilities Commission (CPUC) to establish and maintain a weekly log that summarizes all ex parte communications in CPUC proceedings between decisionmakers, as defined, and persons with an interest. Senate Floor Amendments of 9/4/15 are exclusively technical as they move the language from one code section to another to avoid chaptering issues with other CPUC related bills. ANALYSIS: Existing law: AB 1023 Page 2 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)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 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 the 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 AB 1023 Page 3 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 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 AB 1023 Page 4 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. 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 currently under consideration on the Senate Floor. 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 currently under consideration on the Assembly Floor. 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 the Senate Committee on Energy, Utilities and Communication after merging much of its contents with SB 660 (see below). SB 660 (Leno/Hueso, 2015) proposes a suite of reforms of the AB 1023 Page 5 CPUC focused on ex parte communications rules, addressing the disqualification of commissioners in proceedings, and others. The bill is currently under consideration on the Assembly Floor. FISCAL EFFECT: Appropriation: No Fiscal Com.:YesLocal: No SUPPORT: (Verified9/8/15) Sierra Club California OPPOSITION: (Verified9/8/15) None received ARGUMENTS IN SUPPORT: According to the author, there have been revelations in recent months that 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. ASSEMBLY FLOOR: 74-0, 5/22/15 AYES: Achadjian, Travis Allen, Baker, Bigelow, Bloom, Bonilla, Bonta, Brough, 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-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte, Patterson, Perea, Quirk, Rendon, Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Wagner, Wilk, Williams, Wood, Atkins NO VOTE RECORDED: Alejo, Jones, O'Donnell, Olsen, Waldron, AB 1023 Page 6 Weber Prepared by:Nidia Bautista / E., U., & C. / (916) 651-4107 9/8/15 14:55:33 **** END ****