BILL ANALYSIS                                                                                                                                                                                                    Ó






                                                                     SB 215


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          Date of Hearing:  June 29, 2016


                    ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE


                                  Mike Gatto, Chair


          SB  
          215 (Leno) - As Amended June 20, 2016


          SENATE VOTE:  37-0


          SUBJECT:  Public Utilities Commission


          SUMMARY:  Enacts various reforms to existing law to address  
          issues of governance, transparency, and accountability at the  
          California Public Utilities Commission (CPUC). Specifically,  
          this bill:  


          1)Specifies a commissioner is to be recused for bias or  
            prejudice by requiring the CPUC to adopt procedures for the  
            recusal or disqualification of a commissioner due to bias or  
            prejudice; prohibits an administrative law judge (ALJ) or  
            commissioner from ruling on any motion seeking their own  
            recusal or disqualification and changes the legal standard for  
            recusal or disqualification from "unalterably closed mind" to  
            the existence of "bias or prejudice."


          2)Reforms ex parte communication, as specified.


          3)Reforms penalties for sanctions related to violations of ex  











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            parte rules.


          4)Authorizes the Attorney General to bring an enforcement  
            action, decided by the Superior Court, to assess civil  
            sanctions against a decisionmaker or employee of the CPUC who  
            violates ex parte rules.


          5)Sets maximum civil financial penalties for ex parte violations  
            at $50,000 per violation. New provisions include factors that  
            may be considered in the assessment of penalties such as the  
            severity of the violation and the financial resources of the  
            offender.


          EXISTING LAW:   



          1)Requires that the commission adopt procedures on the  
            disqualification of administrative law judges due to bias or  
            prejudice similar to those of other state agencies and  
            superior courts. (Public Utilities Code Section 309.6)



          2)Requires the CPUC to determine the nature of a proceeding,  
            specifically whether it is quasi-legislative, ratesetting, or  
            adjudicatory and establishes definitions and rules related to  
            each. (Public Utilities Code Section 1701.1)



          3)Directs the CPUC to adopt by regulation rules to define  
            decisionmakers and persons for purposes of applying ex parte  
            communication rules. (Public Utilities Code Section 1701.1)













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          4)Prescribes procedures for adjudication cases if the CPUC  
            determines the case requires a hearing. (Public Utilities Code  
            Section 1701.2)



          5)Prescribes procedures for ratesetting cases if the CPUC  
            determines the case requires a hearing. (Public Utilities Code  
            Section 1701.3)



          1)Prescribes procedures for quasi-legisiative cases if the CPUC  
            determines the case requires a hearing. (Public Utilities Code  
            Section 1701.3)


          6)Specifies that the complainant and the corporation or person  
            complained of, and such corporations or persons as the CPUC  
            allows to intervene shall be entitled to be heard and to  
            introduce evidence. (Public Utilities Code Section 1701.5)


          FISCAL EFFECT:  Unknown.


          COMMENTS:  


          1)Author's Statement: "In 2010, the City of San Bruno  
            experienced a preventable pipeline explosion that caused  
            horrible suffering and loss of life. More recently, a release  
            of emails related to the San Bruno disaster and the San Onofre  
            nuclear plant closing has revealed serious flaws in the  
            management structure and operation of the CPUC. These emails  
            have amply demonstrated that the relationships between the  
            Commission and its regulated utilities are too close, and too  
            informal, to inspire confidence that ratepayer and non-utility  











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            interests are adequately represented by the Commission.

            "In response to these events, the CPUC's top management asked  
            the law firm of Strumwasser & Woocher LLP to assess current  
            laws and practices related to ex parte communications and to  
            compare the [CPUC's] rules with best practices regarding ex  
            parte communications from other utility regulators. The report  
            found that ex parte communications are 'frequent, pervasive,  
            and at least sometimes outcome-determinative in CPUC  
            ratesetting cases.'<1> It declared that these practices are  
            'fundamentally unfair to the parties' and 'have come to  
            fundamentally undermine record-based decision-making and to  
            transform the very nature of CPUC rate hearings.'<2> 

            SB 215 includes enhanced disclosure ofsubstantive ex parte  
            communications in ratesetting cases, new requirements for  
            decisionmakers to disclose ex parte communications in  
            ratesetting cases, and specific sanctions for illegal ex parte  
            communications for both interested persons such as utilities,  
            and for decisionmakers such as Commissioners and senior CPUC  
            staff. It is important to understand that the [CPUC's] role in  
            many circumstances is to act as prosecutor, judge, and jury,  
            often with consequences for human life and safety as well as  
            large financial impacts for ratepayers and utilities. In this  
            high-powered, high-stakes environment, we must protect the  
            impartiality of the [CPUC], not only in adherence to basic  
            fairness, but also to ensure public confidence in CPUC  
            decisions. 

            "What we face today is an erosion of public trust in the  
            institution Californians rely upon to protect life safety and  
            --------------------------

          <1>


           Strumwasser, M.J.; Grossman Palmer, B.; Larson, D.K., Report to  
          the California Public Utilities Commission Regarding Ex Parte  
          Communications and Related Practices, Strumwasser & Woocher, LLP  
          June 22, 2015, Page 4. (Report attached.)
          <2> ibid, Page 4.









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            to keep utility monopolies in check. By bolstering standards  
            for recusal of commissioners, reforming ex parte communication  
            rules, increasing transparency, and tightening penalties for  
            ex parte violations, SB 215 will help instill a new ethic and  
            bring meaningful change to the [CPUC]."

          2)Principles of California Public Utilities Commission Reform:   
            On Monday June 27, 2016, Governor Brown and Assemblymember  
            Gatto, Chair of the Assembly Utilities and Commerce Committee  
            announced an agreement on Principles for Reforms of the CPUC.  
            This bill includes several of these principles already,  
            including:


             a)   Ex Parte reforms.


             b)   Authorizing the Attorney General to bring an enforcement  
               action in superior court against a decisionmaker or  
               employee of the commission who violates the ex parte  
               communication requirements.


            SB 512 (Hill) and SB 1017 (Hill) of 2016 include other  
            elements of the principles.


          3)Suggested Amendments:  The author may wish to consider the  
            following amendments:


             a)   Include  a specific prohibition against conversing with  
               commissioners regarding selection of administrative law  
               judges in lieu of language in the bill that would deem this  
               an ex parte communication.


             b)   Prohibit ex parte communications 3 days before a  
               commission vote.











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             c)   Require inclusions of topics discussed and relevant  
               proceeding numbers in ex parte reporting.


             d)   Include an equal time rule for ex parte communications  
               to ensure that other interested parties are allowed access  
               to commissioners.


             SECTION 1. Section 309.6 of the Public Utilities Code is  
            amended to read:
            309.6. (a) The commission shall adopt procedures on the  
            disqualification of commissioners and  administrative law  
            judges due to bias or prejudice similar to those of other  
            state agencies and superior courts.
            (b) (1) For ratesetting and adjudicatory proceedings, a  
            commissioner or administrative law judge shall be disqualified  
            for bias or prejudice based on either of the following:
            (A) Actions taken during the proceeding that demonstrate bias  
            or prejudice.
            (B) Actions demonstrating any commitment to provide relief to  
            a party.
            (2) Past work experience by the commissioner or administrative  
            law judge shall not be a sufficient basis for demonstrating  
            bias or prejudice pursuant to paragraph (1).
            (c) The commission procedures shall not authorize a  
            commissioner or administrative law judge to rule on a motion  
            made by a party to a proceeding to disqualify the commissioner  
            or administrative law judge due to bias or prejudice.
             (d)  The commission shall develop the procedures with the  
            opportunity for public review and comment.

            SEC. 2. Section 1701.1 of the Public Utilities Code is amended  
            to read:
            1701.1. (a) The commission shall determine whether each  
            proceeding is a quasi-legislative, an adjudication, or a  
            ratesetting proceeding and,  consistent with due process,  











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            public policy, and statutory requirements, determine whether   
            the  proceeding requires a 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 or of any subsequent ruling that expands the scope of  
            the proceeding.  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 rules  regarding ex parte  
            communication on case categorization issues.
            (b) The commission,  upon initiating an adjudication  
            proceeding or ratesetting proceeding,  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. The administrative law judge shall  
            either preside and conduct, or assist the assigned  
            commissioner or commissioners in presiding and conducting, any  
            evidentiary or adjudication hearing that may be required. 
            (c) The commission, upon initiating a quasi-legislative  
            proceeding, shall assign one or more commissioners to oversee  
            the case and an administrative law judge, where appropriate,  
            who may be assisted by a technical advisory staff member in  
            conducting the proceeding. 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.
            (d)  (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.











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            (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) "All-party conference," for purposes of this article, is a  
            public hearing held on the record before a quorum of  
            commissioners at which  all  parties to a proceeding shall have  
            the right to participate and communicate their views regarding  
            any factual, legal, or policy issue in the proceeding.
            (e)  (1)  (A)  "Ex parte communication," for purposes of this  
            article, means any oral or written communication between a  
            decisionmaker and an interested person concerning any  matter  
            before the commissionthat the commission has not specified in  
            its Rules of Practice and Procedure as being a procedural  
            matter and  that does not occur in a public hearing, workshop,  
            or other public proceeding, or on the official record of the  
            proceeding on the matter. The commission shall specify in its  
            Rules of Practice and Procedure, enacted by rulemaking, the  
            types of issues considered procedural matters under this  
            article.  Any communication between an interested person and a  
            decisionmaker regarding which commissioner or administrative  
            law judge may be assigned to a matter before the commission  
            shall not be deemed to be a procedural matter and shall be an  
            ex parte communication subject to this article  . 
            (B) "Interested person," for purposes of this article, means  
            any of the following:
             (i)  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.
             (ii)  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. A person  
            involved in issuing credit ratings or advising entities or  
            persons who invest in the shares or operations of any party to  











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            a proceeding is a person with a financial interest. 
            (iii)  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.
            (iv) Other categories of individuals deemed by the commission,  
            by rule, to be an interested person.
            (2)  The commission shall by rule  adopt and publish a  
            definition of decisionmakers and interested  persons for  
            purposes of this article,  along with any requirements for  
            written reporting of ex parte communications and appropriate  
            sanctions for noncompliance with any rule proscribing ex parte  
            communications. The definition of decisionmakers shall  
            include, but is not limited to, each commissioner; the  
            attorney for the commission; the executive director of the  
            commission; the personal staff of a commissioner if the staff  
            is acting in a policy or legal advisory capacity; the chief  
            administrative law judge of the commission; and the  
            administrative law judge assigned to the proceeding.   The  
            commission shall by rule explictly ban any communication  
            between an interested person and a decisionmaker regarding  
            which commissioner or administrative law judge may be assigned  
            to a matter before the commission.
             (3) For adjudication cases, the rules shall provide that ex  
            parte communications shall be prohibited, as required by this  
            article. The rules shall provide that if an ex parte  
            communication occurs that is prohibited by this article, or if  
            an ex parte communication occurs in a ratesetting case,  
            whether initiated by a decisionmaker or an interested person,  
            all of the following shall be required:
            (A) The interested person shall report the communication  
            within three working days of the communication by filing a  
            notice with the commission that includes all the following:
            (i) The date, time, and location of the communication, whether  
            the communication was oral or  written, or a combination of  
            both, and the communication medium utilized. 
            (ii) The identity of the decisionmaker, the identity of the   
            person initiating the communication, and any other persons  
            present. 











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            (iii)  Topics of the communication, including applicable  
            proceeding numbers. 
            (iii) A complete description of the interested person's  
            communication and its content.
            (iv) A copy of any written material or text used during the  
            communication.
            (B) Any decisionmaker who participated in the communication  
            shall comply with both of the following:
            (i) If the interested person who participated in the  
            communication has not timely submitted the notice required by  
            subparagraph (A), the decisionmaker shall refer the matter to  
            a commission attorney and promptly prepare and file a notice  
            that includes the information required by subparagraph (A) and  
            a complete description of the decisionmaker's communication  
            and its content.
             (ii)  If the interested person has timely submitted the  
            notice required by subparagraph (A), the decisionmaker shall  
            promptly file a notice that includes a complete  description  
            of the decisionmaker's  communication and its content and, if  
            appropriate, that corrects or supplements, as applicable, the  
            factual representations made by the interested person. 
            (4) The commission shall not take any vote on a matter in  
            which a notice  of a prohibited ex parte communication  has been  
            filed pursuant to subparagraph (A) or (B) of paragraph (3)  
            until all parties to the proceeding have been provided a  
            reasonable opportunity to respond to the communication.
            (5) If an ex parte communication is not disclosed as required  
            by this subdivision until after the commission has issued a  
            decision on the matter to which the  prohibited  communication  
            pertained, a party not participating in the communication may  
            file a petition to rescind or modify the decision. The party  
            may seek a finding that the ex parte communication  was  
            prohibited and  significantly influenced the decision's process  
            or outcome as part of any petition to rescind or modify the  
            decision. The commission shall process the petition in  
            accordance with the commission's procedures for petitions for  
            modification and shall issue a decision on the petition no  
            later than 180 days after the filing of the petition.
            (6) (A) Ex parte communications that occur at conferences that  











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            are  related to   within the scope of an adjudication or  
            ratesetting proceeding shall be  prohibited and  subject to the   
            disclosure  requirements of this article.
            (B) Ex parte communications that occur at conferences and that  
            are  related to   within the scope of  a quasi-legislative  
            proceeding shall be governed by the ex parte communication  
            disclosure requirements developed by the commission.
            (C) For purposes of this section, "ex parte communications  
            that occur at conferences" includes, but is not limited to,  
            communications in a private setting or during meals,  
            entertainment events, and tours, and informal discussions  
            among conference attendees.
            (7) The commission shall render its decisions based on the  
            evidence in the record. Ex parte communications shall not be a  
            part of the  evidentiary  record of the proceedings.
            (f) The commission may meet in a closed session to discuss  
            administrative matters so long as no collective consensus is  
            reached or vote taken on any matter requiring a vote of the  
            commissioners. The commission shall, by rule, adopt and  
            publish a definition of "administrative matters" for purposes  
            of this section.
            (g) The commission shall permit written comments received from  
            the public to be included in the record of its proceedings  ,  
            but the comments shall not be treated as evidence  . The  
            commission shall provide parties to the proceeding a  
            reasonable opportunity to respond to any public comments  
            included in the record of proceedings.
            (h) It is the intent of the Legislature that the commission,  
            and any entity or person seeking to influence actions taken by  
            the commission, shall be subject to all applicable ethical  
            standards, including any applicable obligations under the  
            Political Reform Act of 1974 (Title 9 (commencing with Section  
            81000) of the Government Code), including, but not limited to,  
            any applicable lobbying obligations.
            
            SEC. 3. Section 1701.2 of the Public Utilities Code is amended  
            to read:
            1701.2. (a) If the commission pursuant to Section 1701.1 has  
            determined that an adjudication case requires a hearing, the  











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            assigned commissioner or the assigned administrative law judge  
            shall hear the case in the manner described in the scoping  
            memo. The scoping memo shall designate whether the assigned  
            commissioner or the assigned administrative law judge shall  
            preside in the case.
            (b) The commission shall provide by rule for peremptory  
            challenges and challenges for cause of the administrative law  
            judge. Challenges for cause shall include, but not be limited  
            to, financial interests and prejudice. The rule shall provide  
            that all parties are entitled to one peremptory challenge of  
            the assignment of the administrative law judge in all cases.  
            All parties are entitled to unlimited peremptory challenges in  
            any case in which the administrative law judge has within the  
            previous 12 months served in any capacity in an advocacy  
            position at the commission, been employed by a regulated  
            public utility, or has represented a party or has been an  
                                                            interested person in the case.
             (c)   The assigned commissioner or the administrative law  
            judge shall prepare and file a decision setting forth  
            recommendations, findings, and conclusions. The decision shall  
            be filed with the commission and served upon all parties to  
            the action or proceeding without undue delay, not later than  
            60 days after the matter has been submitted for decision. The  
            decision of the assigned commissioner or the administrative  
            law judge shall become the decision of the commission if no  
            further action is taken within 30 days. Any party may appeal  
            the decision to the commission, provided that the appeal is  
            made within 30 days of the issuance of the decision. The  
            commission may itself initiate a review of the proposed  
            decision on any grounds.  
            (d) The commission may hold an all-party conference before a  
            quorum of commissioners at which all parties have an  
            opportunity to be heard. The commission shall adopt rules for  
            implementation of all-party conferences that ensure the  
            broadest participation by parties to the proceeding that the  
            commission can reasonably accommodate consistent with the  
            commissioners' other duties and responsibilities.
            (e) The commission's decision shall be supported by findings  
            of fact on all issues material to the decision, and the  











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            findings of fact shall be based on the record developed by the  
            assigned commissioner or the administrative law judge. A  
            decision different from that of the assigned commissioner or  
            the administrative law judge shall be accompanied by a written  
            explanation of each of the changes made to the decision.
             (f)  Notwithstanding Section 307, an officer, employee, or  
            agent of the commission that is personally involved in the  
            prosecution or in the supervision of the prosecution of an  
            adjudication case before the commission shall not participate  
            in the decision of the case, or in the decision of any  
            factually related adjudicatory proceeding, including  
            participation in or advising the commission as to findings of  
            fact, conclusions of law, or orders. An officer, employee, or  
            agent of the commission that is personally involved in the  
            prosecution or in the supervision of the prosecution of an  
            adjudication case may participate in reaching a settlement of  
            the case, but shall not participate in the decision of the  
            commission to accept or reject the settlement, except as a  
            witness or counsel in an open hearing or a hearing closed  
            pursuant to subdivision  (d).  (h).  The Legislature finds that  
            the commission performs both prosecutorial and adjudicatory  
            functions in an adjudication case and declares its intent that  
            an officer, employee, or agent of the commission, including  
            its attorneys, may perform only one of those functions in any  
            adjudication case or factually related adjudicatory  
            proceeding.
             (g)  (1)  Ex parte communications shall be prohibited in  
            adjudication cases.
            (2) Any oral or written communications concerning procedural  
            matters in adjudication cases between interested persons and  
            decisionmakers, except the assigned administrative law judge,  
            shall be prohibited.
             (h)  Notwithstanding any other law, the commission may meet  
            in a closed hearing to consider the decision that is being  
            appealed. The vote on the appeal shall be in a public meeting  
            and shall be accompanied with an explanation of the appeal  
            decision.
             (i)  Adjudication cases shall be resolved within 12 months of  
            initiation unless the commission makes findings why that  











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            deadline cannot be met and issues an order extending that  
            deadline. In the event that a rehearing of an adjudication  
            case is granted, the parties shall have an opportunity for  
            final oral argument.
             (j)  (1) The commission may determine that the respondent  
            lacks, or may lack, the ability to pay potential penalties or  
            fines or to pay restitution that may be ordered by the  
            commission.
            (2) If the commission determines that a respondent lacks, or  
            may lack, the ability to pay, the commission may order the  
            respondent to demonstrate, to the satisfaction of the  
            commission, sufficient ability to pay potential penalties,  
            fines, or restitution that may be ordered by the commission.  
            The respondent shall demonstrate the ability to pay, or make  
            other financial arrangements satisfactory to the commission,  
            within seven days of the commission commencing an adjudication  
            case. The commission may delegate to the attorney to the  
            commission the determination of whether a sufficient showing  
            has been made by the respondent of an ability to pay.
            (3) Within seven days of the commission's determination of the  
            respondent's ability to pay potential penalties, fines, or  
            restitution, the respondent shall be entitled to an impartial  
            review by an administrative law judge of the sufficiency of  
            the showing made by the respondent of the respondent's ability  
            to pay. The review by an administrative law judge of the  
            ability of the respondent to pay shall become part of the  
            record of the adjudication and is subject to the commission's  
            consideration in its order resolving the adjudication case.  
            The administrative law judge may enter temporary orders  
            modifying any financial requirement made of the respondent  
            pending the review by the administrative law judge.
            (4) A respondent that is a public utility regulated under a  
            rate of return or rate of margin regulatory structure or that  
            has gross annual revenues of more than one hundred million  
            dollars ($100,000,000) generated within California is presumed  
            to be able to pay potential penalties or fines or to pay  
            restitution that may be ordered by the commission, and,  
            therefore, paragraphs (1) to (3), inclusive, do not apply to  
            that respondent.











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            SEC. 4. Section 1701.3 of the Public Utilities Code is amended  
            to read:
            1701.3. (a) If the commission pursuant to Section 1701.1 has  
            determined that a ratesetting case requires a hearing, the  
            procedures prescribed by subdivisions (b), (d), (f), and (i)  
            shall be applicable.
            (b)   The assigned commissioner shall determine prior to the  
            first hearing whether the commissioner or the assigned  
            administrative law judge shall be designated as the principal  
            hearing officer. The principal hearing officer shall be  
            present for more than one-half of the hearing days. The  
            decision of the principal hearing officer shall be the  
            proposed decision.
            (c) An alternate decision may be issued by the assigned  
            commissioner or the assigned administrative law judge who is  
            not the principal hearing officer. Any alternate decision may  
            be filed with the commission and served upon all parties to  
            the proceeding any time prior to issuance of a final decision  
            by the commission, consistent with the requirements of Section  
            311.
            (d) The commission shall establish a procedure for any party  
            to request the presence of a commissioner at a hearing. The  
            assigned commissioner shall be present at any closing  
            arguments in the case.
            (e) The principal hearing officer shall present the proposed  
            decision to the full commission in a public meeting. The  
            alternate decision, if any, shall also be presented to the  
            full commission at that public meeting.
            (f)  The presentation to the full commission shall contain a  
            record of the number of days of the hearing, the number of  
            days that each commissioner was present, and whether the  
            decision was completed on time.
             (g)  The commission shall provide by rule  for peremptory  
            challenges and challenges for cause of the administrative law  
            judge. Challenges for cause shall include, but not be limited  
            to, financial interests and prejudice. All parties shall be  
            entitled to unlimited peremptory challenges in any case in  
            which the administrative law judge has within the previous 12  











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            months served in any capacity in an advocacy position at the  
            commission, been employed by a regulated public utility, or  
            has represented a party or has been an interested person  in  
            the case.
            (h) (1) Ex parte communications in ratesetting cases are  
            subject to the disclosure requirements of this article. The  
            commission  may make a formal determination prohibiting   , may  
            prohibit  ex parte communications in a ratesetting case  within  
            90 days of the commencement of the proceeding  .
            (A) Oral communications may be permitted by a decisionmaker if  
            all parties are  invited to the meeting and  given not less than  
            three working days' notice.  No individual ex parte meetings  
            may be held within three business days before the scheduled  
            date of a vote on the decision of the commission.  
            (B)  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 that authorization at the time the  
            request is granted.  
             (C)  Written ex parte communications by any interested person  
            may be permitted if copies of the communication are  
            transmitted to all parties on the same day as the original  
            communication.
             (D)  Written ex parte communications shall not be part of the  
            record of the proceeding.
             (C)  (  E)  The commission may establish a period during which no  
            oral or written  ex parte  all-party  communications may  be  
            permitted and the commission  may meet in closed session  
            during that period, which shall not in any circumstance exceed  
            14 days. If the commission holds the decision, it may permit  
            all-party communications during the first half of the interval  
            between the hold date and the date that the decision is  
            calendared for final decision. The commission may meet in  
            closed session for the second half of that interval.
             (2) Oral communications concerning a procedural matter in  
            ratesetting cases between interested persons and  
            decisionmakers, except the assigned administrative law judge,  
            are prohibited, except that an oral communication may be  
            permitted at any time by any decisionmaker if all parties are  











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            invited and given not less than three working days' notice.
            (3) Written communications concerning a procedural matter in  
            ratesetting cases between interested persons and  
            decisionmakers, except the assigned administrative law judge,  
            are prohibited, except that a decisionmaker may permit a  
            written communication by any party if copies of the  
            communication are transmitted to all parties on the same day.
             (i)  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.
            (j) After the issuance of a proposed decision in a ratesetting  
            case, the commission may hold an all-party conference before a  
            quorum of commissioners at which all parties have an  
            opportunity to be heard. The commission shall adopt rules for  
            implementation of all-party conferences that ensure the  
            broadest participation by parties to the proceeding that the  
            commission can reasonably accommodate consistent with the  
            commissioners' other duties and responsibilities.
             (k)  The commission may, in issuing its decision, adopt,  
            modify, or set aside the proposed decision or any part of the  
            decision based on evidence in the record. The final decision  
            of the commission shall be issued not later than 60 days after  
            the issuance of the proposed decision. 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 decision is proposed pursuant to Section  
            311.
            
            SEC. 5.  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 subdivisions (b) and (d) to (f),  
            inclusive, shall be applicable.
             (b)   The assigned administrative law judge and any assigned  
            technical advisory staff  shall act as an assistant to the  
            assigned commissioner in quasi-legislative cases. The assigned  
            commissioner shall prepare the proposed rule or order with the  











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            assistance of the administrative law judge and any assigned  
            technical advisory staff.  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.
             (c)  Ex parte communications in quasi-legislative proceedings  
            are permitted and not subject to the disclosure requirements  
            of this article, except when the commission,  within 90 days of  
            the commencement of a quasi-legislative proceeding, makes a  
            formal determination of    by order or ruling  , either of the  
            following. 
            (1) That ex parte communications are subject to the disclosure  
            requirements of this article.
            (2) That ex parte communications are prohibited and subject to  
            the disclosure requirements of this article.
             (d)  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.
            (e) After the issuance of a proposed decision in a  
            quasi-legislative case, the commission may hold an all-party  
            conference before a quorum of commissioners at which all  
            parties have an opportunity to be heard. The commission shall  
            adopt rules for implementation of all-party   conferences that  
            ensure the broadest participation by parties to the proceeding  
            that the commission can reasonably accommodate consistent with  
            the commissioners' other duties and responsibilities.
             (f)  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. 6. Section 1701.5 of the Public Utilities Code is amended  
            to read:











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            1701.5. (a) Except as specified in subdivision (b), in a  
            ratesetting or quasi-legislative case, the commission shall  
            resolve the issues raised in the scoping memo within 18 months  
            of the date the proceeding  is initiated,  unless the  
            commission makes a written determination that the deadline  
            cannot be met, including findings as to the reason, and issues  
            an order extending the deadline.
            (b) Notwithstanding subdivision (a), the commission may  
            specify in a scoping memo a resolution date later than 18  
            months from the date the proceeding  is initiated,  if that  
            scoping memo includes specific reasons for the necessity of a  
            later date and the commissioner assigned to the case approves  
            the date.
            SEC. 7. Section 1701.6 is added to the Public Utilities Code,  
            to read:

            1701.6. (a) In addition to any penalty, fine, or other  
            punishment applicable pursuant to Article 11 (commencing with  
            Section 2100), the commission may assess civil sanctions upon  
            any entity or person, other than a decisionmaker or employee  
            of the commission, who violates, fails to comply with, or  
            procures, aids, or abets any violation of, the ex parte  
            communication requirements of this article or those adopted by  
            the commission pursuant to this article. The civil sanctions  
            may include civil penalties, adverse consequences in  
            commission proceedings, or other appropriate commission orders  
            directed at the entity, person, or both the entity and person,  
            committing the violation.
            (b) (1) Except as provided in paragraph (2), a civil penalty  
            assessed shall not exceed fifty thousand dollars ($50,000) per  
            violation. Each day of a continuing violation is a separate  
            violation. If the violation consists of engaging in a  
            communication that is prohibited by the ex parte communication  
            requirements, each day that the violation is not disclosed to  
            the commission and to parties of record in the formal  
            proceeding in which the communication occurred shall  
            constitute a separate violation.
            (2) If the entity or person may obtain, by violating the ex  
            parte communication requirements, financial benefits that  











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            exceed the maximum amount of civil penalty allowable pursuant  
            to paragraph (1), the commission may impose a civil penalty up  
            to the amount of those financial benefits.
            (c) Civil penalties assessed pursuant to subdivision (b) upon  
            entities whose rates are determined by the commission shall be  
            in the form of credits to the customers of that entity. Civil  
            penalties collected from other entities shall be deposited in  
            the General Fund.
            (d) In determining the appropriate civil sanctions, the  
            commission shall consider the following factors:
            (1) The severity of the violation.
            (2) The conduct of the entity or person, including the level  
            of experience of the entity or person in participating in  
            commission proceedings and whether the entity or person  
            knowingly violated the ex parte communication requirements.
            (3) The financial resources of the entity or person.
            (4) The totality of the circumstances in furtherance of the  
            public interest.
            
            SEC. 8. Section 1701.7 is added to the Public Utilities Code,  
            to read:
            1701.7. (a) The Attorney General may bring an enforcement  
            action in superior court against a decisionmaker or employee  
            of the commission who violates, fails to comply with, or  
            procures, aids, or abets any violation of, the ex parte  
            communication requirements in this article or those adopted by  
            the commission pursuant to this article.
            (b) Notwithstanding Section 1759, in an enforcement action  
            brought pursuant to this section, the court may grant  
            appropriate relief, including disqualification of the  
            decisionmaker from one or more proceedings and civil penalties  
            as provided in Section 2111.
            (c) In determining the appropriate relief, the court may  
            consider the following factors:
            (1) The severity of the violation.
            (2) The conduct of the decisionmaker or employee, including  
            whether the decisionmaker or employee knowingly violated the  
            ex parte communication requirements.
            (3) The financial resources of the decisionmaker or employee.











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            (4) The totality of the circumstances in furtherance of the  
            public interest.
            (d) The Attorney General may compromise the enforcement action  
            subject to approval by the court.
            (e) Civil penalties collected pursuant to this section shall  
            be deposited into the Litigation Deposits Fund established  
            pursuant to Article 9 (commencing with Section 16425) of  
            Chapter 2 of Part 2 of Division 4 of Title 2 of the Government  
            Code.


          4)Support and Opposition: 


            Supporters state that reforms in this bill represent important  
            first steps to restore public confidence in the ability of the  
            CPUC to make fair and open decisions on a wide array of public  
            utility issues that effect virtually all California residents  
            and businesses.


            Opponents state that, if enacted, SB 215 will "simply enhance  
            the already significant advantage the large utilities enjoy in  
            the CPUC process" and render it virtually impossible for  
            participants in most proceedings to communicate with  
            decisionmakers at the CPUC.


            Other opponents are concerned that it will be impossible to  
            convene an all-party meeting due to the logistical problems  
            associated with convening a meeting with all commissioners in  
            attendance.


          REGISTERED SUPPORT / OPPOSITION:















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          Support


          California Emerging Technology Fund


          National Diversity Coalition


          The Utility Reform Network




          Opposition


          California Cogeneration Council 


          California Water Association (unless amended)


          California Large Energy Consumers Association


          Commercial Energy of California


          Goodin, MacBride, Squeri & Day (unless amended)




          Analysis Prepared by:Sue Kateley / U. & C. / (916)  
          319-2083














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