Senate Bill No. 48

Introduced by Senator Hill

December 18, 2014

An act to amend Sections 305, 306, 307, 308, 309.6, 321.6, 1701, 1701.1, 1701.4, and 1759 of, and to add Section 1701.6 to, the Public Utilities Code, relating to the Public Utilities Commission.

LEGISLATIVE COUNSEL’S DIGEST

SB 48, as introduced, Hill. Public Utilities Commission.

(1) The California Constitution establishes the Public Utilities Commission, with jurisdiction over all public utilities. The California Constitution grants the commission certain general powers over all public utilities, subject to control by the Legislature, and authorizes the Legislature, unlimited by the other provisions of the Constitution, to confer additional authority and jurisdiction upon the commission that is cognate and germane to the regulation of public utilities. Existing law requires the Governor to designate the president of the commission from among its members and requires the president to direct the executive director, the attorney, and other staff of the commission, except for the Office of Ratepayer Advocates. Existing law authorizes the executive director and the attorney to undertake certain actions if directed or authorized by the president, except as otherwise directed or authorized by vote of the commission.

This bill would repeal the requirement that the president direct the executive director, the attorney, and other commission staff. The bill would delete the authority of the president to direct or authorize the executive director and attorney to undertake certain actions, thereby requiring that they be directed or authorized to undertake those actions by the commission. The bill would require the commission to develop performance criteria for the commission and the executive director and to annually evaluate the performance of the executive director based on the criteria established in the previous year.

(2) The Public Utilities Act provides that the office of the commission be in the City and County of San Francisco, that the office always be open, legal holidays and nonjudicial days excepted, that the commission hold its sessions at least once in each calendar month in the City and County of San Francisco, and authorizes the commission to also meet at those other times and places as may be expedient and necessary for the proper performance of its duties.

This bill would require that the commission hold its sessions at least once in each calendar month in the City and County of San Francisco or the City of Sacramento and would require that the commission hold no less than 6 sessions each year in the City of Sacramento.

(3) The California Constitution authorizes the commission to establish its own procedures, subject to statutory limitations or directions and constitutional requirements of due process. Existing law requires the commission to determine whether a proceeding requires a hearing and, if so, to determine whether the matter requires a quasi-legislative, an adjudication, or a ratesetting hearing. For these purposes, quasi-legislative cases are cases that establish policy rulemakings and investigations which may establish rules affecting an entire industry, adjudication cases are enforcement cases and complaints except those challenging the reasonableness of any rates or charges, and ratesetting cases are cases in which rates are established for a specific company, including general rate cases, performance-based ratemaking, and other ratesetting mechanisms.

This bill would make the Administrative Adjudication Code of Ethics applicable to adjudication hearings of the commission.

(4) Existing law requires the commission, upon initiating a hearing, to assign one or more commissioners to oversee the case and an administrative law judge, where appropriate. Existing law requires the assigned commissioner to prepare and issue, by order or ruling, a scoping memo that describes the issues to be considered and the applicable timetable for resolution. Existing law requires the commission, to adopt procedures on the disqualification of administrative law judges due to bias or prejudice similar to those of other state agencies and superior courts.

This bill would require the commission to additionally adopt procedures on the disqualification of commissioners due to bias or prejudice similar to those of other state agencies and superior courts.

(5) The Public Utilities Act requires the commission to develop, publish, and annually update an annual workplan that does all the following: (a) describes in clear detail the scheduled ratemaking proceedings and other decisions that may be considered by the commission during the calendar year, (b) include information on how members of the public and ratepayers can gain access to the commission’s ratemaking process and information regarding the specific matters to be decided, (c) include information on the operation of the office of the public adviser and identify the names and telephone numbers of those contact persons responsible for specific cases and matters to be decided, and (d) include a statement that specifies activities that the commission proposes to reduce the costs of, and rates for, energy, including electricity, and for improving the competitive opportunities for state agriculture and other rural energy consumers. The act requires the commission to submit the workplan to the Governor and Legislature by February 1 of each year.

This bill would expand the requirement that the workplan describe in clear detail the scheduled proceedings that may be considered by the commission during the calendar year to include all proceedings and not just ratemaking proceedings. The bill would additionally require that the workplan include performance criteria for the commission and executive director and evaluate the performance of the executive director during the previous year based on the criteria established in the prior year’s workplan.

(6) The Public Utilities Act requires the commission to create, and annually submit to the Governor and Legislature by February 1, a report on the number of cases where resolution exceeded the time periods prescribed in scoping memos and the days that commissioners presided in hearings.

This bill would delete the requirement that the report include the number of cases where resolution exceeded the time periods prescribed in scoping memos and instead would require the report to describe the commission’s timeliness in resolving cases and include information on the disposition of applications for rehearings. The bill would require that the report include the number of scoping memos issued in each proceeding and to include the number of orders issued extending the statutory deadlines for all adjudication, ratesetting, and quasi-legislative cases.

(7) Existing law regulates communications in hearings before the commission and defines “ex parte communication” to mean any oral or written communication between a decisionmaker and a person with an interest in a matter before the commission concerning substantive, but not procedural, issues that does not occur in a public hearing, workshop, or other public proceeding, or on the official record of the proceeding on the matter. Existing law requires the commission, by regulation, to adopt and publish a definition of the terms “decisionmaker” and “persons” for those purposes, along with any requirements for written reporting of ex parte communications and appropriate sanctions for noncompliance with any rule proscribing ex parte communications. Existing law requires the commission to permit ex parte communications in quasi-legislative cases without restriction.

This bill would revise the definition of an “ex parte communication” to include communication between a decisionmaker and a representative of the financial industry, even if the representative does not have an interest in the matter. The bill would require that the commission’s definition of who is a “decisionmaker” include commissioners, the executive director of the commission, and the attorney of the commission. The bill would permit ex parte communications in quasi-legislative proceedings only in the following circumstances: (A) for oral ex parte communications if all interested parties are invited and given not less than 3 days’ notice, (B) for written ex parte communications if copies of the communication are transmitted to all parties on the same day, and (C) if an ex parte communication meeting is granted to any party, all other parties are required to be granted individual ex parte meetings of a substantially equal period of time and not less than 3 days’ notice would be required to be sent of this right at the time that the request is granted. The bill would make a violation of the ex parte communications requirements punishable by a fine of not more than $50,000 or by imprisonment for not more than one year in the county jail, or by both fine and imprisonment. By creating a new crime, the bill would impose a state-mandated local program. The bill would require the commission to post all prepared written testimony submitted in its formal proceedings on the commission’s Internet Web site.

(8) The California Constitution provides that the Legislature has plenary power to establish the manner and scope of review of commission action in a court of record. Existing law provides that only the Supreme Court and the court of appeal have jurisdiction to review, reverse, correct, or annul any order or decision of the commission or to suspend or delay the execution or operation thereof, or to enjoin, restrain, or interfere with the commission in the performance of its official duties.

This bill would authorize an action to enforce the requirements of the Bagley-Keene Open Meeting Act or the California Public Records Act to be brought against the commission in the superior court.

(9) The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.

The people of the State of California do enact as follows:

SECTION 1.  

(a) The Legislature finds and declares all of the
following:

(1) On June 3, 2014, California’s Fourth District Court of
Appeal, in Disenhouse v. Peevey (2014) 226 Cal.App.4th 1096,
held that an interested person desiring to enforce the Bagley-Keene
Open Meeting Act against the Public Utilities Commission must
do so by filing a petition for writ of mandamus in the Supreme
Court or the Court of Appeal and may not do so by filing an action
for injunctive relief in the superior court.

(2) The intent of the Bagley-Keene Open Meeting Act is that
actions of state agencies be taken openly and that their deliberation
be conducted openly.

(3) The people’s right to remain informed so that they may
retain control over the instruments of government that they have
created is not less of a right for some agencies than for other
agencies, nor shall the people’s ability to enforce the Bagley-Keene
Open Meeting Act be more hampered for some agencies than for
other agencies.

(4) The duties, responsibilities, and actions of the Public Utilities
Commission affect the well-being of current and future generations
and the public interest and principles of fundamental fairness and
due process of law require that the commission conduct its affairs
in an open, objective, and impartial manner, free of undue influence
and the abuse of power and authority.

(b) It is the intent of the Legislature that the Public Utilities
Commission should be subject to the judicial review provisions
of the Bagley-Keene Open Meeting Act.

SEC. 2.  

Section 305 of the Public Utilities Code is amended
to read:

305.  

The Governor shall designate a president of the
commission from among the members of the commission. The
president shall begin delete direct the executive director, the attorney, and other
staff of the commission, except for the staff of the division
described in Section 309.5, in the performance of their duties, in
accordance with commission policies and guidelines. The president
shall end delete preside at all meetings and sessions of the commission.

SEC. 3.  

Section 306 of the Public Utilities Code is amended
to read:

306.  

(a) The office of the commission shall be in the City and
County of San Francisco. The office shall always be open, legal
holidays and nonjudicial days excepted. The commission shall
hold its sessions at least once in each calendar month in the City
and County of San Francisco begin insert or the City of Sacramento end insert . The
commission may also meet at such other times and in such other
places as may be expedient and necessary for the proper
performance of its duties, and for that purpose may rent quarters
or offices. begin insert The commission shall hold no less than six sessions
each year in the City of Sacramento. end insert

(b) The meetings of the commission shall be open and public
in accordance with the provisions of Article 9 (commencing with
Section 11120) of Chapter 1 of Part 1 of Division 3 of Title 2 of
the Government Code.

In addition to the requirements of Section 11125 of the
Government Code, the commission shall include in its notice of
meetings the agenda of business to be transacted, and no item of
business shall be added to the agenda subsequent to the notice in
the absence of an unforeseen emergency situation. A rate increase
shall not constitute an unforeseen emergency situation. As used
in this subdivision, “meeting” shall include all investigations,
proceedings, and showings required by law to be open and public.

(c) The commission shall have a seal, bearing the inscription
“Public Utilities Commission State of California.” The seal shall
be affixed to all writs and authentications of copies of records and
to such other instruments as the commission shall direct.

(d) The commission may procure all necessary books, maps,
charts, stationery, instruments, office furniture, apparatus, and
appliances.

SEC. 4.  

Section 307 of the Public Utilities Code is amended
to read:

307.  

(a) The commission may appoint as attorney to the
commission an attorney at law of this state, who shall hold office
during the pleasure of the commission.

(b) The attorney shall represent and appear for the people of the
State of California and the commission in all actions and
proceedings involving any question under this part or under any
order or act of the commission. If directed to do so by the begin delete president,
except as otherwise directed by vote of the end delete commission, the
attorney shall intervene, if possible, in any action or proceeding
in which any such question is involved.

(c) The attorney shall commence, prosecute, and expedite the
final determination of all actions and proceedings directed or
authorized by begin delete the president, except as otherwise directed or
authorized by vote of end delete the commission, advise the commission and
each commissioner, when so requested, in regard to all matters in
connection with the powers and duties of the commission and the
members thereof, and generally perform all duties and services as
attorney to the commission that begin delete the president, or vote of end delete the
commission begin delete , end delete may require of begin delete him. end delete begin insert him or her. end insert

SEC. 5.  

Section 308 of the Public Utilities Code is amended
to read:

308.  

(a) The commission shall appoint an executive director,
who shall hold office during its pleasure. The executive director
shall be responsible for the commission’s executive and
administrative duties and shall organize, coordinate, supervise,
and direct the operations and affairs of the commission and
expedite all matters within the commission’s jurisdiction.

(b) The executive director shall keep a full and true record of
all proceedings of the commission, issue all necessary process,
writs, warrants, and notices, and perform begin delete such end delete begin insert any end insert other duties begin delete as
the president, or vote of the commission, end delete begin insert the commission end insert
prescribes. The begin delete president end delete begin insert commission end insert may authorize the executive
director to dismiss complaints or applications when all parties are
in agreement thereto, in accordance with rules that the commission
may prescribe.

(c) The commission may appoint assistant executive directors
who may serve warrants and other process in any county or city
and county of this state.

begin insert

(d) The commission shall develop performance criteria for the
commission and the executive director and shall annually evaluate
the performance of the executive director based on the criteria
established in the previous year.

end insert

SEC. 6.  

Section 309.6 of the Public Utilities Code is amended
to read:

309.6.  

(a) The commission shall adopt procedures on the
disqualification of begin insert end insert begin insert commissioners and end insert administrative law judges
due to bias or prejudice similar to those of other state agencies and
superior courts.

(b) The commission shall develop the procedures with the
opportunity for public review and comment.

SEC. 7.  

Section 321.6 of the Public Utilities Code is amended
to read:

321.6.  

(a) The commission shall do all of the following:

(1) Develop, publish, and annually update an annual workplan
that describes in clear detail the scheduled begin delete ratemaking end delete proceedings
and other decisions that may be considered by the commission
during the calendar year. The plan shall include, but is not limited
to, information on how members of the public and ratepayers can
gain access to the commission’s ratemaking process and
information regarding the specific matters to be decided. The plan
shall also include information on the operation of the office of the
public adviser and identify the names and telephone numbers of
those contact persons responsible for specific cases and matters
to be decided. The plan shall also include a statement that specifies
activities that the commission proposes to reduce the costs of, and
rates for, energy, including electricity, and for improving the
competitive opportunities for state agriculture and other rural
energy consumers. begin insert The plan shall also include performance criteria
for the commission and executive director and shall evaluate the
performance of the executive director during the previous year
based on the criteria established in the prior year’s workplan. end insert The
commission shall post the plan under the Official Documents area
of its Internet Web site and shall develop a program to disseminate
the information in the plan utilizing computer mailing lists to
provide regular updates on the information to those members of
the public and organizations which request that information.

(2) Produce a complete accounting of its transactions and
proceedings for the preceding year, together with other facts,
suggestions, and recommendations that it deems of value to the
people of the state and a statement that specifies the activities and
achievements of the commission in reducing the costs of, and rates
for, energy, including electricity, for state agriculture and other
rural energy consumers.

(3) Create a report begin delete on the number of cases where resolution
exceeded the time periods prescribed in scoping memos end delete begin insert describing
the commission’s timeliness in resolving cases, information on the
disposition of applications for rehearings, end insert and the days that
commissioners presided in hearings. begin insert The report shall include the
number of scoping memos issued in each proceeding and the
number of orders issued extending the statutory deadlines pursuant
to subdivision (d) of Section 1701.2, for all adjudication cases,
and pursuant to subdivision (a) of Section 1701.5, for all ratesetting
or quasi-legislative cases. end insert

(4) Submit annually the plan, accounting, and report required
by paragraphs (1), (2), and (3) to the Governor and Legislature no
later than February 1 of each year.

(b) The president of the commission shall annually appear before
the appropriate policy committees of the Senate and Assembly to
report on the annual workplan access guide of the commission
required pursuant to this section.

(c) The president of the commission shall annually appear before
the appropriate policy committees of the Senate and Assembly to
report on the annual report of the commission on the begin delete number of
cases where resolution exceeded the time periods prescribed in
scoping memos end delete begin insert commission’s timeliness in resolving cases end insert and
the days that commissioners presided in begin delete hearings, pursuant to
Section 13 of Chapter 856 of the Statutes of 1996. end delete begin insert hearings. end insert

SEC. 8.  

Section 1701 of the Public Utilities Code is amended
to read:

1701.  

(a) All hearings, investigations, and proceedings shall
be governed by this part and by rules of practice and procedure
adopted by the commission, and in the conduct thereof the technical
rules of evidence need not be applied. No informality in any
hearing, investigation, or proceeding or in the manner of taking
testimony shall invalidate any order, decision or rule made,
approved, or confirmed by the commission.

(b) Notwithstanding Section 11425.10 of the Government Code,
begin insert Articles 1 through 15, inclusive, of end insert Chapter 4.5 (commencing with
Section 11400) of Part 1 of Division 3 of Title 2 of the Government
Code begin delete does end delete begin insert do end insert not apply to a hearing by the commission under this
code. begin insert The Administrative Adjudication Code of Ethics (Article 16
(commencing with Section 11475) of Chapter 4.5) shall apply to
adjudication proceedings of the commission. end insert

SEC. 9.  

Section 1701.1 of the Public Utilities Code is amended
to read:

1701.1.  

(a) The commission, consistent with due process,
public policy, and statutory requirements, shall determine whether
a proceeding requires a hearing. The commission shall determine
whether the matter requires a quasi-legislative, an adjudication,
or a ratesetting hearing. The commission’s decision as to the nature
of the proceeding shall be subject to a request for rehearing within
10 days of the date of that decision. If that decision is not appealed
to the commission within that time period it shall not be
subsequently subject to judicial review. Only those parties who
have requested a rehearing within that time period shall
subsequently have standing for judicial review and that review
shall only be available at the conclusion of the proceeding. The
commission shall render its decision regarding the rehearing within
30 days. The commission shall establish regulations regarding ex
parte communication on case categorization issues.

(b) The commission upon initiating a hearing shall assign one
or more commissioners to oversee the case and an administrative
law judge where appropriate. The assigned commissioner shall
schedule a prehearing conference. The assigned commissioner
shall prepare and issue by order or ruling a scoping memo that
describes the issues to be considered and the applicable timetable
for resolution.

(c) (1) Quasi-legislative cases, for purposes of this article, are
cases that establish policy, including, but not limited to,
rulemakings and investigations which may establish rules affecting
an entire industry.

(2) Adjudication cases, for purposes of this article, are
enforcement cases and complaints except those challenging the
reasonableness of any rates or charges as specified in Section 1702.

(3) Ratesetting cases, for purposes of this article, are cases in
which rates are established for a specific company, including, but
not limited to, general rate cases, performance-based ratemaking,
and other ratesetting mechanisms.

(4) “Ex parte communication,” for purposes of this article,
means any oral or written communication between a decisionmaker
and a person with an interest in a matter before the commission
begin insert or a representative of the financial industry end insert concerning substantive,
but not procedural issues, that does not occur in a public hearing,
workshop, or other public proceeding, or on the official record of
the proceeding on the matter. “Person with an interest,” for
purposes of this article, means any of the following:

(A) Any applicant, an agent or an employee of the applicant,
or a person receiving consideration for representing the applicant,
or a participant in the proceeding on any matter before the
commission.

(B) Any person with a financial interest, as described in Article
1 (commencing with Section 87100) of Chapter 7 of Title 9 of the
Government Code, in a matter before the commission, or an agent
or employee of the person with a financial interest, or a person
receiving consideration for representing the person with a financial
interest.

(C) A representative acting on behalf of any civic,
environmental, neighborhood, business, labor, trade, or similar
organization who intends to influence the decision of a commission
member on a matter before the commission.

The commission shall by regulation adopt and publish a
definition of decisionmakers and persons for purposes of this
section, begin insert which shall include commissioners, the executive director,
and the attorney to the commission, end insert along with any requirements
for written reporting of ex parte communications and appropriate
sanctions begin insert , in addition to those described in Section 1701.6, end insert for
noncompliance with any rule proscribing ex parte communications.
The regulation shall provide that reportable communications shall
be reported by the begin delete party, end delete begin insert party and the decisionmaker, end insert whether
the communication was initiated by the party or the decisionmaker.
Communications shall be reported begin insert by the party end insert within three
working days of the communication by filing a “Notice of Ex Parte
Communication” with the commission in accordance with the
procedures established by the commission for the service of that
notice. The notice shall include the following information:

(i) The date, time, and location of the communication, and
whether it was oral, written, or a combination.

(ii) The identity of the recipient and the person initiating the
communication, as well as the identity of any persons present
during the communication.

(iii) A description of the party’s, but not the decisionmaker’s,
communication and its content, to which shall be attached a copy
of any written material or text used during the communication.

begin insert

(d) The commission shall post all prepared written testimony
submitted in its formal proceedings on its Internet Web site.

end insert

SEC. 10.  

Section 1701.4 of the Public Utilities Code is
amended to read:

1701.4.  

(a) If the commission pursuant to Section 1701.1 has
determined that a quasi-legislative case requires a hearing, the
procedures prescribed by this section shall be applicable. The
assigned administrative law judge shall act as an assistant to the
assigned commissioner in quasi-legislative cases. The assigned
commissioner shall be present for formal hearings. The assigned
commissioner shall prepare the proposed rule or order with the
assistance of the administrative law judge. The assigned
commissioner shall present the proposed rule or order to the full
commission in a public meeting. The report shall include the
number of days of hearing and the number of days that the
commissioner was present.

(b) Ex parte communications shall be permitted begin delete without any
restrictions. end delete begin insert in quasi-legislative cases, subject to the following: end insert

begin insert

(1) Oral ex parte communications may be permitted if all
interested parties are invited and given not less than three days’
notice.

end insert begin insert

(2) Written ex parte communications may be permitted if copies
of the communication are transmitted to all parties on the same
day.

end insert begin insert

(3) If an ex parte communication meeting is granted to any
party, all other parties shall also be granted individual ex parte
meetings of a substantially equal period of time and shall be sent
a notice of this right at the time that the request is granted. In no
event shall that notice be less than three days.

end insert

(c) Any party has the right to present a final oral argument of
its case before the commission. Those requests shall be scheduled
in a timely manner. A quorum of the commission shall be present
for the final oral arguments.

(d) The commission may, in issuing its rule or order, adopt,
modify, or set aside the proposed decision or any part of the rule
or order. The final rule or order of the commission shall be issued
not later than 60 days after the issuance of the proposed rule or
order. Under extraordinary circumstances the commission may
extend this date for a reasonable period. The 60-day period shall
be extended for 30 days if any alternate rule or order is proposed
pursuant to Section 311.

SEC. 11.  

Section 1701.6 is added to the Public Utilities Code,
to read:

1701.6.  

A violation of the ex parte communications
requirements of this article by any person is punishable by a fine
of not more than fifty thousand dollars ($50,000) or by
imprisonment for not more than one year in a county jail, or by
both that fine and imprisonment.

SEC. 12.  

Section 1759 of the Public Utilities Code is amended
to read:

1759.  

(a) No court of this state, except the Supreme Court and
the court of appeal, to the extent specified in this article, shall have
jurisdiction to review, reverse, correct, or annul any order or
decision of the commission or to suspend or delay the execution
or operation thereof, or to enjoin, restrain, or interfere with the
commission in the performance of its official duties, as provided
by law and the rules of court.

(b) The writ of mandamus shall lie from the Supreme Court and
from the court of appeal to the commission in all proper cases as
prescribed in Section 1085 of the Code of Civil Procedure.

begin insert

(c) This section does not apply to an action brought against the
commission to enforce the requirements of the Bagley-Keene Open
Meeting Act (Article 9 (commencing with Section 11120) of
Chapter 1 of Part 1 of Division 3 of Title 2 of the Government
Code) or the California Public Records Act (Chapter 3.5
(commencing with Section 6250) of Division 7 of Title 1 of the
Government Code), which action may be brought in the superior
court.

end insert

SEC. 13.  

No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of
the Government Code, or changes the definition of a crime within
the meaning of Section 6 of Article XIII B of the California
Constitution.