BILL ANALYSIS                                                                                                                                                                                                    Ó






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          |SENATE RULES COMMITTEE            |                       AB 1023|
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                                   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:








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          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  







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          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  







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            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  







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          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,  







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            Weber

          Prepared by:Nidia Bautista / E., U., & C. / (916) 651-4107
          9/8/15 14:55:33


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