BILL ANALYSIS Ó
SB 215
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Date of Hearing: August 10, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
SB 215
(Leno) - As Amended August 3, 2016
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|Policy |Utilities and Commerce |Vote:|14 - 0 |
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Urgency: No State Mandated Local Program: YesReimbursable:
No
SUMMARY:
This bill provides a variety of changes to address issues of
governance and accountability of the California Public Utilities
Commission (PUC). Among other provisions, this bill:
1)Requires the PUC to adopt procedures for the disqualification
of Commissioners due to bias or prejudice. Requires a
Commissioner or Administrative Law Judge (ALJ) to be
disqualified from ratesetting or adjudicatory proceedings for
bias or prejudice based on specified criteria. Prohibits PUC
procedures from authorizing a Commissioner or ALJ to rule on a
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motion to disqualify oneself from presiding over a proceeding.
2)Recasts and revises laws relating to ex parte communications
with regard to PUC proceedings including the explicitly ban of
the practice of "one-way" ex parte communication.
3)Authorizes the Attorney General to bring an enforcement action
in Superior Court against a decisionmaker or employee of the
PUC for knowingly and willfully violating or failing to comply
with the exparte communication requirements.
4)States legislative intent that anyone seeking to influence PUC
actions is subject to all legal and ethical standards under
the Political Reform Act (PRA).
FISCAL EFFECT:
Increased PUC costs in the range of $250,000 to $600,000 (Public
Utilities Reimbursement Account).
COMMENTS:
1)Purpose. In 2010, the City of San Bruno experienced a
pipeline explosion that caused horrible suffering and loss of
life. According to the author, 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 PUC. The author further contends these
emails amply demonstrate the relationships between the PUC and
its regulated utilities are too close, and too informal, to
inspire confidence that ratepayer and non-utility interests
are adequately represented. This bill provides reforms to the
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operations of the PUC, including the regulation of ex parte
communications.
2)Background. The PUC 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. The PUC regulates
privately-owned electric, natural gas, telecommunications,
water, railroad, rail transit, and passenger transportation
companies. PUC staff includes four personal advisors to each
of four Commissioners, five to the President. Additional
staff include 42 judges of the Administrative Law Division
and numerous attorneys, engineers and accountants who prepare
the docket for all PUC official filings, including maintenance
of the official record of proceedings.
3)PUC Deficiencies. The PUC has recently undergone a number of
audits related to its budget, transportation program, natural
gas pipeline safety program, and other internal functions.
The audit findings raised questions regarding the PUC's
ability to manage its core functions. An audit by the State
Auditor in March of 2014 found the Commission lacks adequate
process for the sufficient oversight of utility balancing
accounts to protect ratepayers from unfair rate increases.
A recent report commissioned by the PUC found ex parte
communications to be frequent, pervasive, and at least
sometimes outcome-determinative in ratesetting cases.
This bill addresses audit findings of mismanagement ex-parte
communication violations, and failed governance.
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Analysis Prepared by:Jennifer Galehouse / APPR. / (916)
319-2081