BILL ANALYSIS Ó SB 512 Page 1 Date of Hearing: June 29, 2016 ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE Mike Gatto, Chair SB 512 (Hill) - As Amended June 20, 2016 SENATE VOTE: 37-0 SUBJECT: Public Utilities Commission SUMMARY: Makes various changes to processes to provide improved transparency of California Public Utilities Commission (CPUC) activities and make revisions to rules governing intervenor compensation to allow local governments to receive such compensation, as specified. Specifically, this bill: 1)Requires the CPUC to hold its sessions at least once in each calendar month, without specifying the location. 2)Makes the Administrative Adjudication Code of Ethics applicable to administrative law judges of the CPUC. 3)Requires, except in adjudication cases, the CPUC, before determining the scope of the proceeding, where feasible and appropriate, to seek theparticipation of those who are likely to be affected by a decision in the proceeding. SB 512 Page 2 4)Requires the Policy and Planning Division of the CPUC to undertake one or more studies of outreach efforts undertaken by other state and federal utility regulatory bodies and to make recommendations to the commission to promote effective outreach, including metrics for use in evaluating success. 5)Requires the CPUC to include a docket card that lists the public versions of all prepared oral and written testimony and advice letter filings, protests, and responses on its Internet Web site. 6)Requires the CPUC to make additional information available on the Internet, including information on how members of the public and ratepayers can gain access to the CPUC's ratemaking process. 7)Requires the CPUC to develop, publish, and annually update a report on public meetings held outside San Francisco in the previous year and a schedule of meetings anticipated to be held outside San Francisco during the upcoming year. 8)Expands the CPUC's current annual workplan report to described all scheduled proceedings that may be considered by the CPUC during the calendar year and require inclusion of performance criteria for the CPUC and executive director.. 9)Permits intervenor compensation to be paid to certain local government entities that intervene or participate in commission proceedings to the extent that their involvement was for the purpose of protecting health and safety, under specified circumstances. SB 512 Page 3 EXISTING LAW: 1)Establishes the CPUC with five members appointed by the Governor and confirmed by the Senate and empowers it to regulate privately owned public utilities in California. (California Constitution Article XII; Public Utilities Code Section 301 et seq.) 2)Requires the office of the CPUC to be located in the City and County of San Francisco. Requires the CPUC to hold at least one session per calendar month in the City and County of San Francisco. (Public Utilities Code Section 306) 3)Requires the CPUC to publish and maintain on its website specified information, including a docket card that lists all documents filed and all decisions or rulings issued in those proceedings, as provided. (Public Utilities Code Section 311.5) 4)Requires the CPUC to develop, publish and annually update an annual workplan report that describes the scheduled ratemaking proceedings and other decisions that may be considered during the calendar year, along with other specified information to be included in the workplan report. (Public Utilities Section 910) 5)Requires the CPUC to annually submit a report to the Legislature on the number of cases where resolution exceeded the time periods prescribed in scoping memos and days that commissioners presided in hearings. (Public Utilities Code Section 910.1) SB 512 Page 4 6)Exempts the CPUC from the California Administrative Procedures Act. (Public Utilities Code Section 1701) 7)Provides compensation for reasonable advocate's fees, reasonable expert witness fees, and other reasonable costs to public utility customers of participation or intervention in any proceeding of the commission. (Public Utilities Code Section1801 et seq.) FISCAL EFFECT: Unknown. COMMENTS: 1)Author's Statement. "Recent scandals at the California Public Utilities Commission (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 poor safety oversight point toward poor management of the organization. "SB 512 would reform the CPUC's governance structure, more clearly outlining the roles and responsibilities of Commissioners and staff, and it would end loopholes that allow regulated utilities to influence CPUC Commissioners outside the public eye." 2)Background. This bill addresses several areas of CPUC reform: a) Performance criteria for the commission and the executive director and annually evaluate the performance of the executive director based on those criteria; SB 512 Page 5 b) Allows the CPUC to meet anywhere, not just in San Francisco; c) Requires the CPUC to modify its annual report to list its schedule of future rulemakings and report on the timeliness of proceedings so that it says how long proceedings have lasted; d) Requires administrative law judges to adhere to ethics provisions of the Administrative Procedures Act; e) Requires testimony-oral and written-to be docketed on the CPUC's Web site; f) Requires the CPUC to perform outreach to affected groups before opening a commission-instigated proceeding, and requires them to outline the efforts in the opening document of the proceeding; g) Permits local government agencies that have been subject to a utility catastrophe and consortia of local government entities to receive intervenor compensation for safety-related intervention. When current CPUC President Picker addressed his colleagues and CPUC staff in January 2015 he stated: "We will move the agency forward with openness and transparency. SB 512 Page 6 "Re-building the CPUC into an organization that is more fair, open, accessible, and effective must start at the top." This bill provides authority to enable the CPUC to implement those actions that will move the CPUC toward openness and transparency. In addition, by providing performance criteria and review and information about the proceedings, the public can be participate more effectively in CPUC proceedings. With regard to intervenor compensation, the City of San Bruno stated in its letter: As we embarked on our participation in three investigations related to the explosion in our community we were shocked to discoverer that?.such compensation it not available to local government organizations like ours. Cities and counties that have suffered catastrophe are least able to devote their limited resource to the arcane and expensive task of participation in CPUC proceedings - they have more than enough to do to just respond, to address the needs of their residents and to rebuild and recover. As written, this bill is unclear that the communities eligible for intervenor compensation would have suffered a catastrophic loss and that the loss is related to utility infrastructure. The author may wish to consider a clarifying amendment to address this. 3) Proposed amendments: SB 512 Page 7 d) "Eligible local government entity" means either of the following: (1) A local government entity that is not a publicly owned public utility that intervenes or participates in a commission proceeding for the purpose of protecting the health and safety of the residents within the entity's jurisdiction after suffering a catastrophic material loss, either in significant damage to infrastructure or loss of life and property or both , as a direct result of public utility infrastructure. (2) A consortium of local governmental entities that intervene or participate in a commission proceeding for the purpose of protecting public health and safety through prevention of material loss, either in significant damage to infrastructure or loss of life and property, as a result of public utility infrastructure . 1802.4. An eligible local government entity is eligible for an award of compensation pursuant to this article for its involvement to the extent that the involvement was for the purpose of protecting health and safety and consistent with subdivision (d) of Section 1802. The eligibility of a local government entity described by paragraph (1) of subdivision (d) of Section 1802, shall be for involvement to the extent that the involvement was germane to the material loss suffered and to improving safety within the entity's jurisdiction . 4) Support and Opposition: Supporters state that transcripts are necessary and integral to the development of a complete record in CPUC proceedings and that parties must have timely access to the transcripts in SB 512 Page 8 order to support positions taken in briefs, comments or other documents submitted in the proceedings With respect to intervenor compensation, supporters state that local governments who have suffered catastrophic losses to seek intervenor compensation. Opponents state that local governments have the power to raise revenue or prioritize workload to cover their operational expenses for the direct benefit of their constituents to advocate in CPUC proceedings. They believe it is inappropriate to ask utility customers to indirectly subsidize the activities of a local government or consortia of local government entities. 5) Related Legislation: SB 215 (Leno) of 2016: Enacts various reforms to existing law to address issues of governance, transparency, and accountability at the CPUC. Pending in the Assembly. AB 2120 (Weber) of 2016: Expands eligibility for intervenor compensation to consortia of school districts. Pending in the Senate. ACR 11 (Gatto) of 2016: Places a measure on the ballot to author Legislature to reform the CPUC functions. Pending in the Senate. SB 48 (Hill) of 2015: Contained provisions related to judicial review of Public Records Act and Bagley-Keene Open Meeting Act. Vetoed by the Governor. SB 512 Page 9 SB 660 (Leno) of 2015: Restricted the use of ex parte communications in ratesetting and quasi-legislative proceedings. Vetoed by the Governor. SB 825 (Rendon) of 2015: Created an inspector general for the CPUC, required the CPUC to publish more information, codified procedures in proceedings regarding the release of utility-furnished documents, increased the use of all-part meetings, and made other changes. Vetoed by the Governor. SB 1165 (Wright) of 2012: Allowed intervenor compensation to be awarded for participation or intervention in proceedings at the CPUC for a county office of education, on behalf of any of the local educational agencies in whole or part within the county or on behalf of itself, or for a community college district. Died in the Senate Appropriations Committee. AB 1973 (Ruskin) of 2008: Required Senate confirmation of the Governor-appointed president of the CPUC, and had the executive director and attorney take direction from the commission rather than the president. Died on the Assembly Floor. SB 532 (Kopp), Chapter 938, Statutes of 1995: Revised procedures for administrative procedures by, among other things, requiring that all state adjudicative proceedings adhere to an "administrative adjudication bill of rights," which would promote greater due process, fairness, accessibility, objectivity and consistency in adjudicative proceedings. This bill exempted the CPUC from its requirements. SB 512 Page 10 REGISTERED SUPPORT / OPPOSITION: Support California Farm Bureau California Public Utilities Commission (if amended) City of Carmel by the Sea City of Laguna Beach City of San Bruno Sierra Club Opposition AT&T California Cable & Telecommunications Association (CCTA) California Water Association (unless amended) SB 512 Page 11 CTIA Consolidated Communications Sprint T-Mobile Verizon Analysis Prepared by:Sue Kateley / U. & C. / (916) 319-2083