BILL ANALYSIS Ó
SB 18
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SENATE THIRD READING
SB
18 (Hill and Hueso)
As Amended July 9, 2015
Majority vote
SENATE VOTE: 39-0
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|Committee |Votes|Ayes |Noes |
| | | | |
| | | | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Utilities |13-0 |Rendon, Patterson, | |
| | |Achadjian, Bonilla, | |
| | |Burke, Cristina | |
| | |Garcia, Hadley, Roger | |
| | |Hernández, Obernolte, | |
| | |Quirk, Santiago, | |
| | |Ting, Williams | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Appropriations |14-0 |Gomez, Bigelow, | |
| | |Bloom, Bonta, | |
| | |Calderon, Chang, | |
| | |Eggman, Gallagher, | |
| | | | |
| | | | |
| | |Eduardo Garcia, | |
| | |Jones, Quirk, Rendon, | |
SB 18
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| | |Weber, Wood | |
| | | | |
| | | | |
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SUMMARY: Requires the California Public Utilities Commission
(CPUC) to approve any contract entered into for outside legal
counsel services to represent it in a criminal investigation by
a vote of the CPUC no sooner than 30 days after the contract is
submitted to the Joint Legislative Budget Committee (JLBC) for
review. Specifically, this bill:
1)Requires the CPUC to approve any contract or other agreement
for services by outside legal counsel to represent the CPUC in
a criminal investigation initiated by any federal, state, or
local agency be approved by a vote of the CPUC no sooner than
30 days after the contract or agreement is submitted to the
JLBC for review.
2)Requires the contract or other agreement submitted to the JLBC
for review to include the following:
a) The funds that the CPUC will use to pay for these
services;
b) Whether the CPUC has followed all of the laws and
procedures applicable to contracting for legal services;
and
c) Whether, and to what degree, existing programs and
operations of the CPUC will be affected.
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FISCAL EFFECT: According to the Assembly Appropriations
Committee, this bill would have minor, absorbable costs, if any.
COMMENTS:
1)Author Statement: "The [CPUC] recently hired criminal defense
attorney for $5.2 million dollars without a vote of the
commissioners ? The [CPUC] paid for the criminal attorney out
of money that would have gone toward hiring
legislatively-authorized positions, improving Information
Technology, strategic planning, and employee training. As
such, the [CPUC] is undermining its ability to fulfill its
statutory and Constitutional responsibilities by hiring a
criminal attorney. For this reason, such a contract should be
subject to a vote of the commissioners, and it should receive
an expedited review by the Legislature. These straightforward
means of oversight would incentivize the [CPUC] to be very
clear on the purpose and scope of any proposal to spend money
on criminal defense."
2)Background: In September 2015, the California Attorney
General (AG) opened an independent investigation on the CPUC
over issues relating to the 2010 San Bruno pipeline explosion
and the selection of an administrative law judge for a rate
setting case. The AG is investigating whether CPUC officials
were influenced by the Pacific Gas and Electric Company to
select a more favorable judge to hear a rate setting case
involving the 2010 San Bruno explosion in which the utility is
seeking to pay for $1.3 billion in pipeline improvements with
ratepayer funds.
In October 2014, the CPUC requested the AG's office to
represent it in the AG's investigation. The AG's office
declined the request based on potential conflicts of interest.
In November 2014, the CPUC signed a $49,000 contract with the
law firm of Sheppard Mullin to represent it in the AG's
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investigation. The contract was subsequently amended to
increase the contract to $5.2 million in March 2015.
3)Oversight: In light of the CPUC's hiring of Sheppard Mullin
to represent it in the AG's criminal investigations, there are
questions over whether or not the CPUC exhausted all its
efforts to hire civil service attorneys before contracting
with private outside counsel. Furthermore, the subsequent
increase of the contract from $49,000 to $5.2 million without
oversight has also brought up questions about whether or not
ratepayer funds should be used for such purposes and whether
or not there should be greater oversight over this process.
This bill requires any contract or other agreement by the CPUC
for outside legal counsel services to represent the CPUC in a
criminal investigation to be approved by a vote of the CPUC no
sooner than 30 days after the contract or agreement is
submitted to the JLBC for review. This bill requires the
contract or other agreement submitted to the JLBC for review
to include: a) the funds that the CPUC will use to pay for
these services, b) whether the CPUC has followed all of the
laws and procedures applicable to contracting for legal
services, and c) whether, and to what degree, existing
programs and operations of the CPUC will be affected.
Analysis Prepared by:
Edmond Cheung / U. & C. / (916) 319-2083 FN:
0001276
SB 18
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