AB 2168, as introduced, Williams. Public Utilities Commission Audit Compliance Act of 2016.
(1) Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including electrical corporations, gas corporations, heat corporations, telegraph corporations, telephone corporations, and water corporations. The California Constitution authorizes the commission to establish rules, examine records, and prescribe a uniform system of accounts for all public utilities. The Public Utilities Act requires the commission to inspect and audit the books and records of electrical corporations, gas corporations, heat corporations, telegraph corporations, telephone corporations, and water corporations for regulatory and tax purposes. An inspection and audit is required to be done at least every 3 years if the utility has over 1,000 customers and at least every 5 years if the utility has 1,000 or fewer customers. The act requires that reports of the inspections and audits and other pertinent information be furnished to the State Board of Equalization for use in the assessment of the public utilities.
This bill, which would be known as the Public Utilities Commission Audit Compliance Act of 2016, would delete the requirement that the reports of the inspections and audits and other pertinent information be furnished to the State Board of Equalization for use in the assessment of the public utilities and instead would require the commission to post reports of the inspections and audits and other pertinent information on its Internet Web site.
(2) Existing law directs the Public Utilities Commission to require a public utility to establish and maintain a reserve account whenever the commission authorizes a change in rates reflecting and passing through to customers specific changes in costs to reflect the balance between the related costs and revenues.
This bill would require the commission to develop a risk-based approach for reviewing those balancing accounts periodically to ensure that the transactions recorded in the balancing accounts are for allowable purposes and are supported by appropriate documentation.
Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.
The people of the State of California do enact as follows:
This act shall be known, and may be cited, as the
2Public Utilities Commission Audit Compliance Act of 2016.
(a) The Legislature hereby finds and declares that the
4California State Auditor, at the behest of the Joint Legislative Audit
5Committee, has made multiple legislative recommendations
6relating to the operations of the Public Utilities Commission in
7recent years. Those legislative recommendations include both of
8the following:
9(1) The Legislature should amend Section 314.5 of the Public
10Utilities Code to remove the requirement that the Public Utilities
11Commission provide audit reports to the State Board of
12Equalization (Report 2013-109).
13(2) To ensure proper oversight of balancing accounts to protect
14ratepayers from unfair rate increases, the Legislature
should amend
15Section 792.5 of the Public Utilities Code to require the Public
16Utilities Commission to develop a risk-based approach for
17reviewing all balancing accounts periodically to ensure that the
18transactions recorded in the balancing accounts are for allowable
19purposes and are supported by appropriate documentation, such
20as invoices (Report 2013-109).
21(b) It is the intent of the Legislature in enacting this act to codify
22the California State Auditor’s legislative recommendations
P3 1described in subdivision (a) to ensure that the Public Utilities
2Commission continues to prioritize the protection of ratepayers
3and remains accountable to legislative oversight.
Section 314.5 of the Public Utilities Code is amended
5to read:
The commission shall inspect and audit the books and
7records for regulatory and tax purposesbegin delete (a)end deletebegin insert (1)end insert at least oncebegin delete inend delete
8 every three years in the case of every electrical, gas, heat, telegraph,
9telephone, and water corporation serving over 1,000 customers,
10andbegin delete (b)end deletebegin insert (2)end insert at least oncebegin delete inend delete
every five years in the case of every
11electrical, gas, heat, telegraph, telephone, and water corporation
12serving 1,000 or fewer customers. An audit conducted in
13connection with a rate proceeding shall be deemed to fulfill the
14requirements of this section.begin delete Reportsend deletebegin insert The commission shall post
15reportsend insert ofbegin delete suchend deletebegin insert theend insert inspections and audits and other pertinent
16informationbegin delete shall be furnished to the State Board of Equalization begin insert
on its Internet Web
17for use in the assessment of public utilities.end delete
18site.end insert
Section 792.5 of the Public Utilities Code is amended
20to read:
begin insert(a)end insertbegin insert end insert Whenever the commission authorizes any change
22in rates reflecting and passing through to customers specific
23changes in costs, except rates set for common carriers, the
24commission shall require as a condition ofbegin delete suchend deletebegin insert theend insert order that the
25public utility establish and maintain a reserve account reflecting
26the balance, whether positive or negative, between the related costs
27and revenues, and
the commission shall take into account by
28appropriate adjustment or other action any positive or negative
29balance remaining inbegin delete any suchend deletebegin insert theend insert reserve account at the time of
30any subsequent rate adjustment.
31(b) The commission shall develop a risk-based approach for
32reviewing all balancing accounts periodically to ensure that the
33transactions recorded in the balancing accounts are for allowable
34purposes and are supported by appropriate documentation.
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