AB 2168, as amended, 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 wouldbegin insert rename the reserve accounts end insertbegin insert“balancing accounts” and wouldend insert 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. Thosebegin delete legislative recommendations includeend deletebegin insert include,
8among other recommendations,end insert both of the 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 (Reportbegin delete 2013-109).end deletebegin insert 2013-109, Recommendation 15).end insert
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 (Reportbegin delete 2013-109).end deletebegin insert
2013-109, Recommendation 1).end insert
P3 1(b) It is the intent of the Legislature in enacting this act to codify
2the California State Auditor’s legislative recommendations
3described in subdivision (a) to ensure that the Public Utilities
4Commission continues to prioritize the protection of ratepayers
5and remains accountable to legislative oversight.
Section 314.5 of the Public Utilities Code is amended
7to read:
The commission shall inspect and audit the books and
9records for regulatory and tax purposes (1) at least once every
10three years in the case of every electrical, gas, heat, telegraph,
11telephone, and water corporation serving over 1,000 customers,
12and (2) at least once every five years in the case of every electrical,
13gas, heat, telegraph, telephone, and water corporation serving 1,000
14or fewer customers. An audit conducted in connection with a rate
15proceeding shall be deemed to fulfill the requirements of this
16section. The commission shall post reports of the inspections and
17audits and other pertinent information
on its Internet Web site.
Section 792.5 of the Public Utilities Code is amended
19to read:
(a) Whenever the commission authorizes any change
21in rates reflecting and passing through to customers specific
22changes in costs, except rates set for common carriers, the
23commission shall require as a condition of the order that the public
24utility establish and maintain abegin delete reserveend deletebegin insert balancingend insert account reflecting
25the balance, whether positive or negative, between the related costs
26and revenues, and the commission shall take into account by
27appropriate adjustment or other action any positive or negative
28balance remaining in thebegin delete reserveend deletebegin insert
balancingend insert account at the time of
29any subsequent rate adjustment.
30(b) The commission shall develop a risk-based approach for
31reviewing all balancing accounts periodically to ensure that the
32transactions recorded in the balancing accounts are for allowable
33purposes and are supported by appropriate documentation.
O
98