BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
SB 48 (Hill) - Public Utilities Commission.
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|Version: May 6, 2015 |Policy Vote: E., U., & C. 9 - 0 |
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|Urgency: No |Mandate: No |
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|Hearing Date: May 18, 2015 |Consultant: Marie Liu |
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This bill meets the criteria for referral to the Suspense File.
Bill
Summary: SB 48 would make various changes to the internal
governance, annual reporting requirements, and meeting
requirements of the California Public Utilities Commission
(CPUC).
Fiscal
Impact:
Ongoing annual costs in the tens of thousands of dollars and
possibly into the low thousands to the Public Utilities
Reimbursement Account (special) to have at least six meetings
in Sacramento instead of San Francisco.
One-time costs of $160,000 annually for two years followed by
estimated annual costs of $360,000 to the Public Utilities
Reimbursement Account (special) to seek views of interested
persons.
Unknown possible legal costs to the Public Utilities
Reimbursement Account (special) to respond to claims under the
Bagley-Keene Open Meeting Act.
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Minor and absorbable costs to the Public Utilities
Reimbursement Account (special) for additional meetings in
order for the commission to direct the executive director,
attorney, and staff.
Background: The CPUC is established in the California Constitution and is
governed by five full-time commissioners, appointed by the
governor and confirmed by the Senate, and staffed by
approximately 1,000 individuals who, together, regulate
privately owned electric, natural gas, telecommunications,
water, railroad, rail transit, and passenger transportation
companies. CPUC staff includes four personal advisors to each
commissioner, except five to the president, as well as the 42
judges of the Administrative Law Division - attorneys, engineers
and accountants who prepare the docket for all CPUC official
filings, including maintenance of the official record of
proceedings.
The CPUC is subject to the Bagley-Keene Open Meeting Act, which
requires a state body to take actions only at a public meeting
following the public posting of an agenda describing the item
for proposed action at least 10 days prior to the meeting. Any
private congregation of a majority of the members of a state
body at the same time and place to hear, discuss, or deliberate
upon any item that is within its jurisdiction is unlawful.
However, only the Supreme Court and the court of appeal have the
jurisdiction over any order or decision of the CPUC, including
Bagley-Keene Open meeting requirements.
Proposed Law:
This bill would make various changes to the operation and
internal governance of the CPUC. Specifically, this bill would:
Allow actions to enforce the Bagley-Keene Open Meeting Act or
the California Records Act to be brought to the superior
court.
Remove the president's ability to solely direct the executive
director, the attorney, and other staff of the commission and
instead require the staff to be directed by the entire
commission.
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Require that the CPUC hold at least six sessions annually in
Sacramento.
Require that all written testimony submitted in a formal
proceeding of the CPUC to be posted on its website.
Require the commission to include performance criteria for the
commission and executive director as well as an evaluation of
the executive director for the past year based on those
criteria in its annual workplan.
Expand the existing required annual report regarding cases
before the agency to also include information on the number of
scoping memos issued in each proceeding and a description of
the commission's timeliness in resolving cases.
Subject the commission's adjudication proceedings to the
Administrative Adjudication Code of Ethics (GOV§11476 et seq.)
Explicitly require the commission to seek the views of those
who are likely to be affected by a proceeding, except in
adjudication cases, and to describe these efforts in the text
of the order instituting the investigation or proceeding.
Related
Legislation:
SB 215 (Leno) would make similar revisions to the CPUC in
regards to the powers of the president and would establish the
criteria for when an administrative law judge should be
excused from a proceeding. SB 215 is currently in the Senate
Energy, Utilities, and Commerce Committee.
SB 660 (Leno, Hueso) would make various changes to the ex
parte communication laws related to ratesetting and
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quasi-legislative proceedings at the CPUC. SB 660 is set to be
heard in the Senate Appropriations Committee on May 18, 2015.
SB 33 (Peace) Chapter 509, Statutes of 1999 put the executive
director and general counsel directly under the control of the
president and authorize the Governor to appoint the president.
Staff
Comments: In order to have at least six meetings in Sacramento
instead of San Francisco, the CPUC estimates costs in the tens
of thousands of dollars to the low hundreds of thousands of
dollars. The costs in the low range would include travel costs
for approximately 40 people including CPUC staff and the
commissioners for six meetings. The higher range would be
include facility costs should no state or complimentary
facilities that meet the CPUC's needs be available. The CPUC
notes that the meeting facility would need to be of sufficient
size, have a space for closed meetings, be compatible with the
CPUC's video/audio contractor as all meetings are webcasted and
audiocasted.
This bill would require the CPUC to actively seek the views of
parties that could be affected by an rulemaking, including those
that might benefit from the rulemaking. To implement this
requirement, the CPUC would need a proceeding to establish the
rules so that the outreach is performed uniformly and
transparently. There would also be ongoing costs to implement
the outreach. These implementation costs would depend on the
process established by the rulemaking, but the CPUC anticipates
that would need one analyst for every five proceedings. Given
that there were 15 proceedings in 2014, it anticipates needing
three Public Utilities Regulatory Analysts III to carry out the
outreach annually plus some supervisorial assistance and legal
support for an annual cost of approximately $360,000 annually.
Staff notes that according to the author's office, this language
was modeled after an Executive Order issued by President Obama
aimed at improving regulation and regulatory review by ensuring
that regulations are adopted in a process that involves public
opinion. It is open to interpretation on what level of effort is
called for by this bill. Arguably it is possible to fulfill the
requirements of this provision with a notice in the major
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newspapers as well as a more intensive effort that involved
individually contacting known interest groups. The proceeding
establishing these rules would define the necessary level of
effort, though staff believes it is reasonable to assume that
the CPUC would be compelled to take a relatively more involved
effort in its outreach efforts as a result of this bill.
This bill would make it easier to bring forward an action
against the CPUC under the Bagley-Keene Open Meeting Act by
allowing such actions to be brought to the superior court in
addition to the court of appeal and the Supreme Court. If the
CPUC is complying with the requirements of the Bagley-Keene Open
Meeting Act, there should seemingly be minimal costs associated
with this provision. However, the CPUC notes that it may have
costs associated with baseless claims that may be filed in order
to undermine or delay CPUC proceedings. Staff notes that while
it may be reasonable to assume that a party may use baseless
claims as a strategic move especially given that the CPUC
addresses controversial issues, any estimate of such costs would
be speculative.
This bill will change the internal governance of the CPUC by
specifying that the executive director, chief counsel, and staff
operated under the direction of the commission as a whole, not
just the president. The CPUC notes potential costs, ranging from
minimal to hundreds of thousands of dollars, associated with
this change as more decisions would need to be made in meetings
in order for the commission to provide direction. Staff notes
that historically the commission was responsible for directing
the staff. This changed in 1999 with the passage of SB 33
(Peace) which gave the president the sole power to direct staff
in an attempt to improve accountability. Given that there were
no potential savings anticipated with the empowering of the
president when SB 33 was heard by the Assembly Appropriations
Committee, staff assumes that the costs of removing the powers
of the president are likely to be minor and absorbable.
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