BILL ANALYSIS Ó
SB 215
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SENATE THIRD READING
SB
215 (Leno and Hueso)
As Amended August 18, 2016
Majority vote
SENATE VOTE: 37-0
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|Committee |Votes|Ayes |Noes |
| | | | |
| | | | |
| | | | |
|----------------+-----+-----------------------+---------------------|
|Utilities |14-0 |Gatto, Patterson, | |
| | |Burke, Chávez, Eggman, | |
| | |Cristina Garcia, | |
| | |Eduardo Garcia, | |
| | |Hadley, | |
| | | | |
| | | | |
| | |Roger Hernández, | |
| | |Obernolte, Quirk, | |
| | |Santiago, Ting, | |
| | |Williams | |
| | | | |
|----------------+-----+-----------------------+---------------------|
|Appropriations |15-0 |Gonzalez, Bigelow, | |
| | |Bloom, Bonilla, Bonta, | |
| | |Chang, Eggman, Eduardo | |
| | |Garcia, Jones, | |
SB 215
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| | |Obernolte, Quirk, | |
| | |Santiago, Weber, Wood, | |
| | |McCarty | |
| | | | |
| | | | |
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SUMMARY: Provides a variety of changes to address issues of
governance and accountability of the California Public Utilities
Commission (CPUC). Among other provisions, this bill:
1)Requires the CPUC 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 CPUC
procedures from authorizing a Commissioner or ALJ to rule on a
motion to disqualify oneself from presiding over a proceeding.
2)Recasts and revises laws relating to ex parte communications
with regard to CPUC 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 decision-maker or employee of the
CPUC for knowingly and willfully violating or failing to
comply with the ex parte communication requirements.
4)States legislative intent that anyone seeking to influence
CPUC actions is subject to all legal and ethical standards
under the Political Reform Act (PRA).
5)States that the technical rules of evidence need not apply in
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the hearings, investigations, and proceedings of the
commission and also states that no informality in the manner
of taking testimony shall invalidate a decision of the
commission.
FISCAL EFFECT: According to the Assembly Appropriations
Committee, increased CPUC 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 CPUC. The author further contends these
emails amply demonstrate the relationships between the CPUC
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
operations of the CPUC, including the regulation of ex parte
communications.
2)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. The CPUC
regulates privately-owned electric, natural gas,
telecommunications, water, railroad, rail transit, and
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passenger transportation companies. CPUC 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 CPUC official
filings, including maintenance of the official record of
proceedings.
3)CPUC Deficiencies: The CPUC 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
CPUC'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 CPUC found ex parte
communications to be frequent, pervasive, and at least
sometimes outcome-determinative in ratesetting cases. This
bill requires reports of ex parte communications to include
substantive information on oral communications.
This bill addresses audit findings of mismanagement ex-parte
communication violations, and failed governance.
4)Technical Rule of Evidence: This bill includes a statement
that the technical rules of evidence need not apply in the
hearings, investigations, and proceedings of the commission
and also states that no informality in the manner of taking
testimony shall invalidate a decision of the commission. This
provision is substantially similar to existing statute, Public
Utilities Code 1701 except that it adds the word "evidence"
and limits this provision only to quasi-legislative
proceedings.
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Analysis Prepared by:
Sue Kateley / U. & C. / (916) 319-2083 FN:
0004480