BILL ANALYSIS                                                                                                                                                                                                    Ó



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

          Bill No:          AB 1651           Hearing Date:    6/27/2016
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          |Author:    |Obernolte                                            |
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          |Version:   |6/20/2016    As Amended                              |
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          |Urgency:   |No                     |Fiscal:      |Yes             |
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          |Consultant:|Jay Dickenson                                        |
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          SUBJECT: Public Utilities Commission: contracts

            DIGEST:    This bill requires the California Public Utilities  
          Commission (CPUC) to monthly publish on its website information  
          about each contract the CPUC enters into, as well information  
          about every contract entered into at the direction of the CPUC.   
          It also requires CPUC to publish on its website audits of CPUC's  
          contracting practices conducted by the Department of General  
          Services (DGS).

          ANALYSIS:
          
          Existing law:
          

          1)Requires DGS to conduct an audit of each state agency to which  
            purchasing authority has been delegated at least once in each  
            three-year period to ensure compliance with statutory  
            requirements related to specific contracting procedures.   
            (Public Contract Code §10333)



          2)Generally requires that governmental records be disclosed to  
            the public, upon request, unless there is a specific reason  
            not to do so. (Government Code §6251 et seq.)


          3)Provides that no information provided to the CPUC by a public  
            utility or its subsidiary or affiliate shall be open to the  
            public except on the order of the CPUC or a commissioner in  







          AB 1651 (Obernolte)                                Page 2 of ?
          
          
            the course of a hearing or proceeding.  Also provides that any  
            present or former officer or employee of the CPUC who divulges  
            information is guilty of a misdemeanor.  (Public Utilities  
            Code §583)

          This bill:

          1)Requires the CPUC, at least monthly, to publish and make  
            available free of charge on its website the following:

                     Information about each contract that the CPUC enters  
                 into.
                     The names, addresses, and points of contact of the  
                 parties to the contract.
                     The goods and services requested, as applicable.
                     The contract value.

          1)As of July 1, 2017, makes the preceding requirements of any  
            contract entered into at the direction of the CPUC.

          2)Requires the CPUC to make available on its website DGS audits  
            of its contracting practices.

          Background

          Several parties have criticized the CPUC's recent contracting  
          practices.  In August of last year, the Assembly Committee on  
          Utilities and Commerce held an oversight hearing on the topic.   
          In a background document for the hearing, committee staff  
          concluded it to be unclear whether the CPUC consistently used  
          the state contracting process, which, among other things,  
          requires that most contracts be competitively bid among multiple  
          vendors.  Subsequent to the hearing, the Joint Legislative Audit  
          Committee approved an audit to examine CPUC contracting  
          practices.  

          Currently, CPUC contracts are available to the public.  However,  
          the process for obtaining access to such contract can be  
          cumbersome.  This bill is premised on the belief that posting on  
          the CPUC website information about contracts to which CPUC is a  
          party will better allow public scrutiny and encourage  
          appropriate contracting practices at the CPUC.

          This bill also requires the posting on the CPUC website  
          information about any contract entered into at the direction of  








          AB 1651 (Obernolte)                                Page 3 of ?
          
          
          the CPUC.  According to representatives of the investor-owned  
          utilities, there are very few contracts they enter into at the  
          direction of the CPUC.  For this reason, they are not concerned  
          that meeting the requirements of this bill with be onerous. 

          The CPUC regularly deals with sensitive information.  Existing  
          statute protects such information by allowing parties to declare  
          such information confidential.  In addition, this bill requires  
          the CPUC to post information about contracts, not the contracts  
          themselves, so CPUC should be able to maintain the  
          confidentiality of any sensitive information by being selective  
          about what contract-related information it places on its  
          website.  In any case, the information this bill requires to be  
          published on the CPUC website is currently available to the  
          public via means other than the internet.

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


            SUPPORT:  

          California Public Utilities Commission (Source)
          The Utility Reform Network

          OPPOSITION:

          None received

          ARGUMENTS IN SUPPORT:    According to the author:
          
               In August 2015, the Assembly Committee on Utilities and  
               Commerce convened an informational hearing on CPUC  
               contracting practices, including an examination of CPUC  
               competitive solicitation practices and adherence to state  
               contracting rules.  The hearing raised questions about the  
               level of oversight and transparency on contracts involving  
               the CPUC and the utilities it regulates.

               One particular issue raised at the hearing was the  
               difficulty of accessing contract details and bidder  
               information.  Without a legislative mandate for  
               transparency, there is no guarantee that contract  
               publishing practices will be maintained in the future.









          AB 1651 (Obernolte)                                Page 4 of ?
          
          
               AB 1651 seeks to address this by shining light onto all  
               awarded contracts involving the CPUC.  This bill would do  
               this by requiring the CPUC to publish on its website copies  
               of each awarded or directed contract and make these  
               documents available to the public free of charge.  In  
               addition, the CPUC would also be required to post copies of  
               DGS audits relating to the CPUC's contracting practices on  
               the CPUC website.  These provisions will improve public  
               transparency at the CPUC and will improve Legislative  
               oversight by helping lawmakers stay informed of CPUC  
               contracting practices.
          
          

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