BILL ANALYSIS Ó SB 48 Page 1 SENATE THIRD READING SB 48 (Hill) As Amended September 9, 2015 Majority vote SENATE VOTE: 39-0 -------------------------------------------------------------------- |Committee |Votes|Ayes |Noes | | | | | | | | | | | | | | | | |----------------+-----+-----------------------+---------------------| |Utilities |14-0 |Rendon, Patterson, | | | | |Achadjian, Bonilla, | | | | |Burke, Dahle, Eggman, | | | | |Cristina Garcia, | | | | |Hadley, Obernolte, | | | | |Quirk, Santiago, Ting, | | | | |Williams | | | | | | | |----------------+-----+-----------------------+---------------------| |Appropriations |17-0 |Gomez, Bigelow, Bloom, | | | | |Bonta, Calderon, | | | | |Chang, Nazarian, | | | | |Eggman, Gallagher, | | | | | | | | | | | | | | |Eduardo Garcia, | | | | |Holden, Jones, Quirk, | | SB 48 Page 2 | | |Rendon, Wagner, Weber, | | | | |Wood | | | | | | | | | | | | -------------------------------------------------------------------- SUMMARY: Proposes a suite of reforms on the governance and operations of the California Public Utilities Commission (CPUC). Specifically, this bill: 1)Requires the CPUC to hold at least six commission sessions each year in Sacramento. 2)Requires the CPUC to publish and include all written testimony in proceeding docket cards. Requires the CPUC to post information on the Internet regarding how the public can access the ratemaking process, the role of the Office of the Public Advisor, and how the Office of the Public Advisor can be of assistance. 3)Expands reporting requirements to include specified information regarding the details of CPUC cases and proceedings, and requires the CPUC president to report on the timeliness of resolving cases annually before the appropriate legislative policy committees. 4)Expands the reporting requirements of the CPUC's annual workplan to include, among other things, performance criteria for the CPUC and its executive director, as well as an annual evaluation of the executive director based on the performance criteria. 5)Subjects the CPUC's adjudication proceedings to the SB 48 Page 3 Administrative Adjudication Code of Ethics. 6)With the exception of adjudicated proceedings, requires the CPUC to seek and engage the views of those likely to be affected by a decision or proceeding, as specified. Requires the CPUC to annually publish and update its outreach activities. 7)Provides that actions to enforce the CPUC's process for handling and determining disclosable public records, as well as actions to enforce Bagley-Keene Open Meetings Act requirements, may be taken to the superior court. 8)Makes various legislative findings regarding the judicial review provisions of the Bagley-Keene Open Meetings Act. 9)Makes other technical and clarifying changes to address chaptering out conflicts. FISCAL EFFECT: According to the Assembly Appropriations Committee, this bill would have the following costs: 1)Significant one-time information technology upgrades, including contracting, systems development, staffing, and implementation costs of approximately $7.5 million to fulfill the public information requirements of the bill. 2)Ongoing annual costs of approximately $1.7 million to maintain and operate the new information technology systems. 3)One-time costs of $120,000 a year for two years for a SB 48 Page 4 proceeding to establish rules for outreach, and ongoing costs of up to $400,000 per year to seek the views of interested persons. 4)Ongoing annual legal costs of approximately $335,000 for the workload associated with superior court reviews of Bagley-Keene Open Meeting and Public Records Acts enforcement actions. 5)Ongoing annual costs of up to $120,000 to hold at least six meetings in Sacramento instead of San Francisco. This includes the costs of meetings sites, equipment, and staff travel. 6)Potential increased annual costs in the range of tens of thousands of dollars to the low hundreds of thousands of dollars for additional meetings in order for the Commission, rather than the president, to direct the executive director, attorney, and staff. 7)Ongoing annual costs of $35,000 for increased reporting requirements. COMMENTS: 1)Author's Statement: "Recent scandals at the [CPUC] have highlighted the need for more visibility in the interactions between Commissioners and regulated utilities, and a series of embarrassing audits of the CPUC's mismanagement of public funds and poor safety oversight point toward poor management of the organization. SB 48 would reform the CPUC's governance SB 48 Page 5 structure, more clearly outlining the roles and responsibilities of Commissioners and staff, and require the CPUC to reach out to communities affected by CPUC decisions instead of only the regulated utilities." 2)Background: California Constitution Article XII establishes the CPUC, and grants it the authority to regulate public utilities. The CPUC is governed by five full-time commissioners appointed by the Governor and confirmed by the State Senate. Commissioners are appointed for six-year terms and can only be removed by the Legislature. Beginning in 2014, Pacific Gas and Electric began releasing over 65,000 emails from a five-year period between utility executives and CPUC officials. The emails revealed discussions on subjects the CPUC was deliberating within a number of proceedings, many of which arguably violated CPUC's rules governing ex parte communications, including emails pertaining to the selection of administrative law judges for ratesetting cases. This bill makes changes to the operation and governance of the CPUC, including requiring the CPUC to hold at least six sessions each year in Sacramento. 3)Bagley-Keene Open Meeting Act: The CPUC is subject to the Bagley-Keene Open Meeting Act, which requires state entities take "action" only at a public meeting following public posting of an agenda describing the item for proposed action. Any private gathering 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. This bill provides that actions to enforce the Bagley-Keene Open Meeting Act and the CPUC's process for disclosing public records may be taken to the superior court. This bill also makes various legislative findings regarding the judicial review provisions of the Bagley-Keene Open Meeting Act. SB 48 Page 6 4)CPUC's Internal Deficiencies: The CPUC has recently undergone a number of audits related to its budget, transportation program, natural gas pipeline safety program, among other internal functions. The findings of these audits have raised questions about the CPUC's ability to manage even some of its core functions. In March 2014, an audit by the State Auditor found that "the commission lacks adequate process for sufficient oversight of utility balancing accounts to protect ratepayers from unfair rate increases." This bill makes various changes to the CPUC to promote greater transparency, including expanding reporting requirements regarding cases, proceedings, and its annual workplan, as specified. This bill also requires the CPUC to promote greater public involvement by publishing information online and engaging in outreach activities, as specified. Analysis Prepared by: Edmond Cheung / U. & C. / (916) 319-2083 FN: 0002338