BILL ANALYSIS                                                                                                                                                                                                    Ó




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                                   THIRD READING 


          Bill No:  AB 1651
          Author:   Obernolte (R) 
          Amended:  8/15/16 in Senate
          Vote:     21 

           SENATE ENERGY, U. & C. COMMITTEE:  9-0, 6/27/16
           AYES:  Hueso, Morrell, Cannella, Gaines, Hertzberg, Hill, Lara,  
            Leyva, McGuire
           NO VOTE RECORDED:  Pavley, Wolk

           SENATE APPROPRIATIONS COMMITTEE:  6-0, 8/11/16
           AYES:  Lara, Beall, Hill, McGuire, Mendoza, Nielsen
           NO VOTE RECORDED:  Bates

           ASSEMBLY FLOOR:  80-0, 5/31/16 - See last page for vote

           SUBJECT:   Public Utilities Commission:  contracts


          SOURCE:    California Public Utilities Commission


          DIGEST:  This bill requires the California Public Utilities  
          Commission (CPUC) to annually publish on its Web site  
          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 Web site  
          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  








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            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)Requires, generally, 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  
            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 annually, to publish and make  
            available free of charge on its Web site 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 Web site 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  








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          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 Web site  
          information about any contract entered into at the direction 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 Web site is currently available to the  
          public via means other than the internet.


          FISCAL EFFECT:   Appropriation:    No          Fiscal  
          Com.:YesLocal:   No            

          According to the Senate Committee on Appropriations,  
          approximately $150,000 annually (Utilities Reimbursement  
          Account) to the CPUC.


          SUPPORT:   (Verified8/11/16)









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          California Public Utilities Commission (source)
          The Utility Reform Network


          OPPOSITION:   (Verified8/11/16)


          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 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.

          ASSEMBLY FLOOR:  80-0, 5/31/16
          AYES:  Achadjian, Alejo, Travis Allen, Arambula, Atkins, Baker,  
            Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke,  








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            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, Quirk, Ridley-Thomas, Rodriguez,  
            Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting,  
            Wagner, Waldron, Weber, Wilk, Williams, Wood, Rendon

          Prepared by:Jay Dickenson / E., U., & C. / (916) 651-4107
          8/15/16 19:47:21


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