Amended in Assembly August 18, 2015

Amended in Assembly July 7, 2015

Amended in Senate May 6, 2015

Amended in Senate April 15, 2015

Senate BillNo. 660


Introduced by Senators Leno and Hueso

February 27, 2015


An act to amend Sections 305, 307, 308, 309.6,begin delete 311,end delete 1701.1, 1701.2, 1701.3, and 1701.4 of, and to add Sections 305.5, 1701.6, and 1701.7 to, the Public Utilities Code, relating to the Public Utilities Commission.

LEGISLATIVE COUNSEL’S DIGEST

SB 660, as amended, Leno. Public Utilities Commission.

(1) The California Constitution establishes the Public Utilities Commission, with jurisdiction over all public utilities. The California Constitution grants the commission certain general powers over all public utilities, subject to control by the Legislature, and authorizes the Legislature, unlimited by the other provisions of the California Constitution, to confer additional authority and jurisdiction upon the commission that is cognate and germane to the regulation of public utilities. Existing law requires the Governor to designate the president of the commission from among its members and requires the president to direct the executive director, the attorney, and other staff of the commission, except for the Office of Ratepayer Advocates. Existing law authorizes the executive director and the attorney to undertake certain actions if directed or authorized by the president, except as otherwise directed or authorized by vote of the commission.

This bill would repeal the requirement that the president direct the executive director, the attorney, and other commission staff. The bill would delete the authority of the president to direct or authorize the executive director and attorney to undertake certain actions, and would instead require that they be directed or authorized to undertake those actions by the commission. The bill would authorize the commission to delegate specific management and internal oversight functions to committees composed of 2 commissioners. The bill would require the commission to vote in an open meeting on the assignment or reassignment of proceeding to one or more commissioners.

(2) Existing law requires the commission, upon initiating a hearing, to assign one or more commissioners to oversee the case and an administrative law judge, where appropriate. Existing law requires the assigned commissioner to prepare and issue, by order or ruling, a scoping memo that describes the issues to be considered and the applicable timetable for resolution. Existing law requires the commission to adopt procedures on the disqualification of administrative law judges due to bias or prejudice similar to those of other state agencies and superior courts.

This bill would require the commission to additionally adopt procedures on disqualification of commissioners due to bias or prejudice similar to those of other state agencies and superior courts. For ratesetting or adjudicatory proceedings, the bill would require a commissioner or an administrative law judge to be disqualified if there is an appearance of bias or prejudice based on specified criteria. The bill would require that the commission procedures prohibit a commissioner or administrative law judge from ruling on a motion made by a party to a proceeding to disqualify the commissioner or administrative law judge due to bias or prejudice.

(3) The Public Utilities Act requires the commission to determine whether a proceeding requires a hearing and, if so, to determine whether the matter requires a quasi-legislative, an adjudication, or a ratesetting hearing. For these purposes, quasi-legislative cases are cases that establish policy rulemakings and investigations, which may establish rules affecting an entire industry, adjudication cases are enforcement cases and complaints, except those challenging the reasonableness of any rates or charges, and ratesetting cases are cases in which rates are established for a specific company, including general rate cases, performance-based ratemaking, and other ratesetting mechanisms. The act regulates communications in hearings before the commission and defines “ex parte communication” to mean any oral or written communication between a decisionmaker and a person with an interest in a matter before the commission concerning substantive, but not procedural, issues that does not occur in a public hearing, workshop, or other public proceeding, or on the official record of the proceeding on the matter. Existing law defines “person with an interest” to mean, among other things, a person with a financial interest 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. Existing law requires the commission, by regulation, to adopt and publish a definition of the terms “decisionmaker” and “persons” for those purposes, along with any requirements for written reporting of ex parte communications and appropriate sanctions for noncompliance with any rule proscribing ex parte communications. The act provides that ex parte communications are prohibited in adjudication cases and are prohibited in ratesetting cases, with certain exceptions. The act requires that ex parte communications be permitted in quasi-legislative cases, without any restrictions. The commission’s Rules of Practice and Procedure define a “decisionmaker” as any commissioner, the Chief Administrative Law Judge, any Assistant Chief Administrative Law Judge, the assigned administrative law judge, or the Law and Motion Administrative Law Judge. The Rules of Practice and Procedure provide that communications with a commissioner’s personal advisors are subject to all of the restrictions on, and reporting requirements applicable to, ex parte communications, except that oral communications with an advisor in ratesetting proceedings are permitted without the restrictions.

This bill would delete the provision that an ex parte communication concerns a substantive, but not a procedural matter, and instead would provide that an ex parte communication concerns any matter that the commission has not specified in its Rules of Practice and Procedure as being a procedural matter. The bill would prohibit the commission from considering as a procedural matter communications between an interested person and a decisionmaker regarding which commissioner or administrative law judge may be assigned to a matter before the commission. The bill would define a person involved in issuing credit ratings or advising entities or persons who may invest in the shares or operations of any party to a proceeding as an interested person. The bill would require that the commission, by rule, adopt and publish a definition of decisionmakers, that would be required to include certain individuals in the commission. The bill would require decisionmakers to periodically report summary logs of ex parte communications with interested persons in compliance with rules established by the commission, and included in the commission’s Rules of Practice and Procedure, and would require the commission to post those summary logs on its Internet Web site.

This bill would require that a decisionmaker, in an adjudication or ratesetting case, who makes or receives a prohibited ex parte communication, or who receives an ex parte communication that was not timely reported, to disclose certain information regarding the communication in the record of the proceeding before the commission takes a vote on the matter. The bill would require the commission to render decisions based upon the record in a case and would provide that an ex parte communication not be part of the record of the proceeding.

This bill would provide that ex parte communications are permitted in quasi-legislative proceedings, but would require that they be reported within 3 working days of the communication by filing a “Notice of Ex Parte Communication” with the commission in accordance with procedures established by the commission for the service of that notice and containing specified information.

This bill would require the commission to additionally prohibit communications concerning procedural issues in adjudication cases between parties or persons with an interest and decisionmakers, except for the assigned administrative law judge.

Under existing law, the exceptions to the prohibition upon ex parte communications in ratesetting proceedings authorize a commissioner to permit oral ex parte communications if all interested parties are invited and given not less than 3 days’ notice. If an ex parte communication meeting is granted to any party, it is required that all other parties also be granted individual ex parte meetings of a substantially equal period of time and that all parties be sent a notice of that authorization at the time the request is granted, at least 3 days prior to the meeting. The exceptions authorize a commissioner to permit written ex parte communications by any party provided that copies of the communication are transmitted to all parties.

This bill would delete the requirement that if an ex parte communication meeting is granted to any party in a ratesetting proceeding, that all other parties also be granted individual ex parte meetings of a substantially equal period of time and that all parties be sent a notice of that authorization at the time the request is granted, at least 3 days prior to the meeting. The bill would prohibit oral communications concerning procedural matters in ratesetting cases between parties or persons with an interest and decisionmakers other than the assigned administrative law judge, except that a commissioner would be authorized to permit an oral communication relative to procedural matters if all interested parties are invited and given not less than 3 days’ notice. The bill would prohibit written ex parte communications concerning procedural matters in ratesetting cases between parties or persons with an interest and decisionmakers other than the assigned administrative law judge, except that a commissioner would be authorized to permit a written communication relative to procedural issues by any party provided that copies of the communication are transmitted to all parties on the same day.

This bill would authorize the commission to impose civil sanctions, including civil penalties, on any entity or person, other than a decisionmaker or employee of the commission, that violates ex parte communication requirements. The bill would authorize the Attorney General to bring an enforcement action in the Superior Court of the City and County of San Francisco against a decisionmaker or employee of the commission who violates the ex parte communication requirements.

Under existing law, a violation of the Public Utilities Act or any order, decision, rule, direction, demand, or requirement of the commission is a crime.

Because the provisions of this bill would be a part of the act and because a violation of an order or decision of the commission implementing its requirements would be a crime, the bill would impose a state-mandated local program by expanding the application of a crime.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.

The people of the State of California do enact as follows:

P6    1

SECTION 1.  

Section 305 of the Public Utilities Code is
2amended to read:

3

305.  

The Governor shall designate a president of the
4commission from among the members of the commission. The
5president shall preside at all meetings and sessions of the
6commission.

7

SEC. 2.  

Section 305.5 is added to the Public Utilities Code, to
8read:

9

305.5.  

(a) The commission shall direct the executive director,
10the attorney, and other staff of the commission, except for the staff
11of the Office of Ratepayer Advocates described in Section 309.5,
12in performance of their duties.

13(b) The commission may delegate specific management and
14internal oversight functions to committees composed of two
15commissioners. Committees shall meet regularly with staff and
16shall report to the commission for additional guidance or approval
17of decisions pertaining to the operations of the commission.

18(c) The commission shall vote in an open meeting on the
19assignment or reassignment of any proceeding to one or more
20 commissioners.

21

SEC. 3.  

Section 307 of the Public Utilities Code is amended
22to read:

23

307.  

(a) The commission may appoint as attorney to the
24commission an attorney at law of this state, who shall hold office
25during the pleasure of the commission.

26(b) The attorney shall represent and appear for the people of the
27State of California and the commission in all actions and
28proceedings involving any question under this part or under any
29order or act of the commission. If directed to do so by the
30commission, the attorney shall intervene, if possible, in any action
31or proceeding in which any such question is involved.

32(c) The attorney shall commence, prosecute, and expedite the
33final determination of all actions and proceedings directed or
34authorized by the commission, advise the commission and each
35commissioner, when so requested, in regard to all matters in
36connection with the powers and duties of the commission and the
37members thereof, and generally perform all duties and services as
P7    1attorney to the commission that the commission may require of
2him or her.

3

SEC. 4.  

Section 308 of the Public Utilities Code is amended
4to read:

5

308.  

(a) The commission shall appoint an executive director,
6who shall hold office during its pleasure. The executive director
7shall be responsible for the commission’s executive and
8administrative duties and shall organize, coordinate, supervise,
9and direct the operations and affairs of the commission and
10expedite all matters within the commission’s jurisdiction.

11(b) The executive director shall keep a full and true record of
12all proceedings of the commission, issue all necessary process,
13writs, warrants, and notices, and perform any other duties as the
14commission prescribes. The commission may authorize the
15executive director to dismiss complaints or applications when all
16parties are in agreement thereto, in accordance with rules that the
17commission may prescribe.

18(c) The commission may appoint assistant executive directors
19who may serve warrants and other process in any county or city
20and county of this state.

21

SEC. 5.  

Section 309.6 of the Public Utilities Code is amended
22to read:

23

309.6.  

(a) The commission shall adopt procedures on the
24disqualification of commissioners and administrative law judges
25due to bias or prejudice similar to those of other state agencies and
26superior courts.

27(b) (1) For ratesetting and adjudicatory proceedings, a
28commissioner or administrative law judge shall be disqualified if
29there is an appearance of bias or prejudice based on any of the
30following:

31(A) Actions taken during the proceeding.

32(B) Private communications before the commencement of the
33proceeding to influence the request for relief sought by any party
34to the proceeding.

35(C) Actions demonstrating any commitment to provide relief
36to a party.

37(2) Past work experience by the commissioner or administrative
38law judge shall not be a sufficient basis for demonstrating an
39appearance of bias or prejudice pursuant to paragraph (1).

P8    1(c) The commission procedures shall prohibit a commissioner
2or administrative law judge from ruling on a motion made by a
3party to a proceeding to disqualify the commissioner or
4administrative law judge due to bias or prejudice.

5(d) The commission shall develop the procedures with the
6opportunity for public review and comment.

begin delete
7

SEC. 6.  

Section 311 of the Public Utilities Code is amended
8to read:

9

311.  

(a) The commission, each commissioner, the executive
10director, and the assistant executive directors may administer oaths,
11certify to all official acts, and issue subpoenas for the attendance
12of witnesses and the production of papers, waybills, books,
13accounts, documents, and testimony in any inquiry, investigation,
14hearing, or proceeding in any part of the state.

15(b) The administrative law judges may administer oaths,
16examine witnesses, issue subpoenas, and receive evidence, under
17rules that the commission adopts.

18(c) The evidence in any hearing shall be taken by the
19commissioner or the administrative law judge designated for that
20purpose. The commissioner or the administrative law judge may
21receive and exclude evidence offered in the hearing in accordance
22with the rules of practice and procedure of the commission.

23(d) Consistent with the procedures contained in Sections 1701.1,
241701.2, 1701.3, and 1701.4, the assigned commissioner or the
25administrative law judge shall prepare and file an opinion setting
26forth recommendations, findings, and conclusions. The opinion
27of the assigned commissioner or the administrative law judge is
28the proposed decision and a part of the public record in the
29proceeding. The proposed decision of the assigned commissioner
30or the administrative law judge shall be filed with the commission
31and served upon all parties to the action or proceeding without
32undue delay, not later than 90 days after the matter has been
33submitted for decision. The commission shall issue its decision
34not sooner than 30 days following filing and service of the
35proposed decision by the assigned commissioner or the
36administrative law judge, except that the 30-day period may be
37reduced or waived by the commission in an unforeseen emergency
38situation or upon the stipulation of all parties to the proceeding or
39as otherwise provided by law. The commission may, in issuing its
40decision, adopt, modify, or set aside the proposed decision or any
P9    1part of the decision. Where the modification is of a decision in an
2adjudicatory hearing it shall be based upon the evidence in the
3record. Every finding, opinion, and order made in the proposed
4decision and approved or confirmed by the commission shall, upon
5that approval or confirmation, be the finding, opinion, and order
6of the commission.

7(e) (1) Any item appearing on the commission’s public agenda
8as an alternate item to a proposed decision or to a decision subject
9to subdivision (g) shall be served upon all parties to the proceeding
10without undue delay and shall be subject to public review and
11comment before it may be voted upon. For purposes of this
12subdivision, “alternate” means either a substantive revision to a
13proposed decision that materially changes the resolution of a
14contested issue or any substantive addition to the findings of fact,
15conclusions of law, or ordering paragraphs. The commission shall
16adopt rules that provide for the time and manner of review and
17comment and the rescheduling of the item on a subsequent public
18agenda, except that the item may not be rescheduled for
19consideration sooner than 30 days following service of the
20alternative item upon all parties. The alternate item shall be
21accompanied by a digest that clearly explains the substantive
22revisions to the proposed decision. The commission’s rules may
23provide that the time and manner of review and comment on an
24alternate item may be reduced or waived by the commission in an
25unforeseen emergency situation.

26(2) In a proceeding in which both a proposed decision and an
27alternate have been served upon the parties and comments have
28been received on the proposed decision or alternate, or both, if
29substantive revisions are made to the proposed decision or alternate
30that was previously served upon the parties and made available
31for comment, the substantively revised proposed decision or
32substantively revised alternate shall be served upon all parties to
33the proceeding and shall be made publicly available on the
34commission’s Internet Web site, noted on the docket sheet for the
35proceeding, for not less than five full working days prior to it being
36acted upon by the commission. Any party to the proceeding or
37interested member of the public may file comments with the
38commission addressing any substantively revised aspect of the
39proposed decision or alternate prior to it being acted upon by the
40commission.

P10   1(f) The commission may specify that the administrative law
2judge assigned to a proceeding involving an electrical, gas,
3telephone, railroad, or water corporation, or a highway carrier,
4initiated by customer or subscriber complaint need not prepare,
5file, and serve an opinion, unless the commission finds that to do
6so is required in the public interest in a particular case.

7(g) (1) Prior to voting on any commission decision not subject
8to subdivision (d), the decision shall be served on parties and
9subject to at least 30 days public review and comment. Any
10alternate to any commission decision shall be subject to the same
11requirements as provided for alternate decisions under subdivision
12 (e). For purposes of this subdivision, “decision” also includes
13resolutions, including resolutions on advice letter filings.

14(2) The 30-day period may be reduced or waived in an
15unforeseen emergency situation, upon the stipulation of all parties
16in the proceeding, for an uncontested matter in which the decision
17grants the relief requested, or for an order seeking temporary
18injunctive relief.

19(3) This subdivision does not apply to uncontested matters that
20pertain solely to water corporations, or to orders instituting
21investigations or rulemakings, categorization resolutions under
22Sections 1701.1 to 1701.4, inclusive, or orders authorized by law
23to be considered in executive session. Consistent with regulatory
24efficiency and the need for adequate prior notice and comment on
25commission decisions, the commission may adopt rules, after
26notice and comment, establishing additional categories of decisions
27subject to waiver or reduction of the time period in this section.

28(h) Notwithstanding any other provision of law, amendments,
29revisions, or modifications by the commission of its Rules of
30Practice and Procedure, shall be submitted to the Office of
31Administrative Law for prior review in accordance with Sections
3211349, 11349.3, 11349.4, 11349.5, 11349.6, and 11350.3 of, and
33subdivisions (a) and (b) of Section 11349.1 of, the Government
34Code. If the commission adopts an emergency revision to its Rules
35of Practice and Procedure based upon a finding that the revision
36is necessary for the preservation of the public peace, health and
37safety, or general welfare, this emergency revision shall only be
38reviewed by the Office of Administrative Law in accordance with
39subdivisions (b) to (d), inclusive, of Section 11349.6 of the
40Government Code. The emergency revision shall become effective
P11   1upon filing with the Secretary of State and shall remain in effect
2for no more than 120 days. A petition for writ of review pursuant
3to Section 1756 of a commission decision amending, revising, or
4modifying its Rules of Practice and Procedure shall not be filed
5until the regulation has been approved by the Office of
6Administrative Law, the Governor, or a court pursuant to Section
711350.3 of the Government Code. If the period for filing the
8petition for writ of review would otherwise have already
9commenced under Section 1733 or 1756 at the time of that
10approval, then the period for filing the petition for writ of review
11shall continue until 30 days after the date of that approval. Nothing
12in this subdivision shall require the commission to comply with
13Article 5 (commencing with Section 11346) of Chapter 3.5 of Part
141 of Division 3 of Title 2 of the Government Code. This
15subdivision is only intended to provide for the Office of
16Administrative Law review of procedural commission decisions
17relating to commission Rules of Practice and Procedure, and not
18 general orders, resolutions, or other substantive regulations.

19(i) The commission shall immediately notify the Legislature
20whenever the commission reduces or waives the time period for
21public review and comment due to an unforseen emergency
22situation, as provided in subdivision (d), (e), or (g).

end delete
23

begin deleteSEC. 7.end delete
24begin insertSEC. 6.end insert  

Section 1701.1 of the Public Utilities Code is amended
25to read:

26

1701.1.  

(a) The commission, consistent with due process,
27public policy, and statutory requirements, shall determine whether
28a proceeding requires a hearing. The commission shall determine
29whether the matter requires a quasi-legislative, an adjudication,
30or a ratesetting hearing. The commission’s decision as to the nature
31of the proceeding shall be subject to a request for rehearing within
3210 days of the date of that decision. If that decision is not appealed
33to the commission within that time period it shall not be
34subsequently subject to judicial review. Only those parties who
35have requested a rehearing within that time period shall
36subsequently have standing for judicial review and that review
37shall only be available at the conclusion of the proceeding. The
38commission shall render its decision regarding the rehearing within
3930 days. The commission shall establish rules regarding ex parte
40communication on case categorization issues.

P12   1(b) The commission upon initiating a hearing shall assign one
2or more commissioners to oversee the case and an administrative
3law judge where appropriate. The assigned commissioner shall
4schedule a prehearing conference. The assigned commissioner
5shall prepare and issue by order or ruling a scoping memo that
6describes the issues to be considered and the applicable timetable
7for resolution.

8(c) (1) Quasi-legislative cases, for purposes of this article, are
9cases that establish policy, including, but not limited to,
10rulemakings and investigations which may establish rules affecting
11an entire industry.

12(2) Adjudication cases, for purposes of this article, are
13 enforcement cases and complaints except those challenging the
14reasonableness of any rates or charges as specified in Section 1702.

15(3) Ratesetting cases, for purposes of this article, are cases in
16which rates are established for a specific company, including, but
17not limited to, general rate cases, performance-based ratemaking,
18and other ratesetting mechanisms.

19(d) (1) (A) “Ex parte communication,” for purposes of this
20article, means any oral or written communication between a
21decisionmaker and an interested person concerning any matter that
22the commission has not specified in its Rules of Practice and
23Procedure as being a procedural matter and that does not occur in
24a public hearing, workshop, or other public proceeding, or on the
25official record of the proceeding on the matter. The commission
26shall specify in its Rules of Practice and Procedure, enacted by
27rulemaking, the types of communications considered procedural
28matters under this article. Any communication between an
29interested person and a decisionmaker regarding which
30commissioner or administrative law judge may be assigned to a
31matter before the commission shall not be deemed to be a
32procedural matter and shall be an ex parte communication subject
33to this article.

34(B) “Interested person,” for purposes of this article, means any
35of the following:

36(i) Any applicant, an agent or an employee of the applicant, or
37a person receiving consideration for representing the applicant, or
38a party to the proceeding on any matter before the commission.

39(ii) Any person with a financial interest, as described in Article
401 (commencing with Section 87100) of Chapter 7 of Title 9 of the
P13   1Government Code, in a matter before the commission, or an agent
2or employee of the person with a financial interest, or a person
3receiving consideration for representing the person with a financial
4interest. A person involved in issuing credit ratings or advising
5entities or persons who may invest in the shares or operations of
6any party to a proceeding is a person with a financial interest.

7(iii) A representative acting on behalf of any civic,
8environmental, neighborhood, business, labor, trade, or similar
9organization who intends to influence the decision of a commission
10member on a matter before the commission.

11(iv) Other categories of individuals deemed by the commission,
12by rule, to be an interested person.

13(2) The commission shall by rule adopt and publish a definition
14of decisionmakers and interested persons for purposes of this
15 section, along with any requirements for written reporting of ex
16parte communications and appropriate sanctions for noncompliance
17with any rule proscribing ex parte communications. The definition
18of decisionmakers shall include, but is not limited to, each
19commissioner; the attorney for the commission; the executive
20director of the commission; the personal staff of a commissioner
21if the staff is acting in a policy or legal advisory capacity; the Chief
22Administrative Law Judge of the commission; the administrative
23law judge assigned to the proceeding; and the director of the
24Energy Division, the director of the Communications Division,
25the director of the Water and Audits Division, and the director of
26the Safety and Enforcement Division, where those directors are
27acting in an advisory capacity in the proceeding.

28(3) For quasi-legislative cases, the rules shall provide that ex
29parte communications that are required to be reported shall be
30 reported by the interested person, whether the communication was
31initiated by the interested person or the decisionmaker.

32(4) For quasi-legislative cases, ex parte communications shall
33be reported by an interested person within three working days of
34the communication by filing a “Notice of Ex Parte
35Communication” with the commission in accordance with the
36procedures established by the commission for the service of that
37notice. The notice shall include the following information:

38(A) The date, time, and location of the communication, whether
39it was oral, written, or a combination, and the communications
40medium utilized.

P14   1(B) The person initiating the communication, including a
2decisionmaker, when applicable, and the identity of the recipient
3and any persons present during the communication.

4(C) A complete and comprehensive description of the interested
5person’s and the decisionmaker’s communication and its content,
6to which shall be attached a copy of any written material or text
7used during the communication.

8(5) For adjudication and ratesetting cases, the rules shall provide
9that if a prohibited ex parte communication occurs, whether
10initiated by a decisionmaker or an interested person, all of the
11following shall be required:

12(A) The interested person participating in the communication
13shall report the communication within one working day of the
14communication by filing a Notice of Prohibited Ex Parte
15Communication with the commission in accordance with the
16procedures established by the commission for the service of that
17notice. The notice shall include the information required by
18paragraph (4).

19(B) A decisionmaker who participated in the prohibited
20communication shall comply with both of the following:

21(i) If the interested person who participated in the
22communication has not timely submitted the Notice of Prohibited
23Ex Parte Communication required by subparagraph (A), the
24decisionmaker shall promptly prepare and file a “Decisionmaker’s
25Notice of Prohibited Ex Parte Communication” with the
26commission in accordance with the procedures established by the
27commission for the service of that notice. The notice shall include
28the information required by paragraph (4).

29(ii) If the interested person has timely submitted the Notice of
30Prohibited Ex Parte Communication required by subparagraph
31(A), the decisionmaker shall review the interested person’s
32submitted notice. If the decisionmaker believes that the interested
33 person’s submitted notice is not accurate or does not meet the
34requirements of paragraph (4), the decisionmaker shall promptly
35file a notice that corrects or supplements the interested person’s
36submitted notice in accordance with the procedures established by
37the commission for the service of that notice. If the decisionmaker
38believes that the interested person’s submitted notice is accurate
39and meets the requirements of paragraph (4), the decisionmaker
40shall promptly file a notice that indicates his or her concurrence
P15   1with the interested person’s submitted notice in accordance with
2the procedures established by the commission.

3(6) The commission shall not take any vote on a matter to which
4a prohibited ex parte communication is known to have occurred
5until the notices required by this subdivision have been made and
6all parties to the proceeding have been provided a reasonable
7opportunity to respond to the prohibited ex parte communication.

8(7) If the prohibited ex parte communication is not disclosed as
9required by this subdivision until after the commission has issued
10a decision on the matter to which the prohibited communication
11pertained, the commission shall provide a reasonable time for a
12party to file a petition to rescind or modify the decision. The
13commission shall process the petition in accordance with the
14commission’s procedures for petitions for modification and shall
15issue a decision on the petition no later than 180 days after the
16filing of the petition.

17(8) A decisionmaker shall periodically report summary logs of
18ex parte communications with interested persons in compliance
19with rules established by the commission to be included in its
20Rules of Practice and Procedure. The commission shall post the
21summary logs on its Internet Web site. A summary log, at a
22minimum, shall include information required in paragraph (3) and
23in subparagraphs (A) and (B) of paragraph (4) and the relevant
24proceedings discussed. If a decisionmaker believes that a Notice
25of Ex Parte Communication submitted by an interested person in
26a quasi-legislative case is inaccurate or fails to meet the
27requirements of paragraphs (3) and (4), the decisionmaker may
28include corrected or supplemental information in the summary log
29and shall also provide notice of any corrected or supplemental
30information in the proceeding to which it pertains in accordance
31with the procedures established by the commission for the service
32of that information. The commission shall enable the posting of
33summary logs on its Internet Web site not later than July 1, 2016.

34(9) (A) Ex parte communications that occur at conferences,
35including open session communications, shall be governed by the
36provisions of this article and any rules adopted by the commission
37pursuant to this article.

38(B) Notwithstanding subparagraph (A), the commission may
39adopt rules for inclusion in the commission’s Rules of Practice
P16   1and Procedure specific to open session communications if the rules
2do both of the following:

3(i) Open session communications relating to a pending
4adjudication case or a pending ratesetting case shall be prohibited.

5(ii) Open session communications relating to a pending
6quasi-legislative case may be permitted if the commission’s rules
7require that permitted open session communications are promptly
8disclosed in the proceeding to which the communication relates
9and require that parties to the proceeding are allowed a reasonable
10opportunity to respond to the communication before the
11commission may vote on any matter to which the communication
12pertained.

13(C) For purposes of this section, “open session communication”
14means an ex parte communication made in a speech, comment, or
15writing delivered to all attendees of a noticed session of a
16conference. All other ex parte communications at a conference,
17including, but not limited to, communications in a private setting
18or during meals, entertainment events, tours, and informal
19discussions among conference attendees, are not included in the
20definition of open session communication.

21(10) The commission shall render its decisions based on the
22evidence in the record. Ex parte communications shall not be a
23part of the record of the proceedings.

24

begin deleteSEC. 8.end delete
25begin insertSEC. 7.end insert  

Section 1701.2 of the Public Utilities Code is amended
26to read:

27

1701.2.  

(a) If the commission pursuant to Section 1701.1 has
28determined that an adjudication case requires a hearing, the
29procedures prescribed by this section shall be applicable. The
30assigned commissioner or the assigned administrative law judge
31shall hear the case in the manner described in the scoping memo.
32The scoping memo shall designate whether the assigned
33commissioner or the assigned administrative law judge shall preside
34in the case. The commission shall provide by rule for peremptory
35challenges and challenges for cause of the administrative law judge.
36Challenges for cause shall include, but not be limited to, financial
37interests and prejudice. The rule shall provide that all parties are
38entitled to one peremptory challenge of the assignment of the
39administrative law judge in all cases. All parties are entitled to
40unlimited peremptory challenges in any case in which the
P17   1administrative law judge has within the previous 12 months served
2in any capacity in an advocacy position at the commission, been
3employed by a regulated public utility, or has represented a party
4or has been an interested person in the case. The assigned
5commissioner or the administrative law judge shall prepare and
6file a decision setting forth recommendations, findings, and
7conclusions. The decision shall be filed with the commission and
8served upon all parties to the action or proceeding without undue
9delay, not later than 60 days after the matter has been submitted
10for decision. The decision of the assigned commissioner or the
11administrative law judge shall become the decision of the
12commission if no further action is taken within 30 days. Any party
13may appeal the decision to the commission, provided that the
14appeal is made within 30 days of the issuance of the decision. The
15commission may itself initiate a review of the proposed decision
16on any grounds. The commission decision shall be based on the
17record developed by the assigned commissioner or the
18administrative law judge. A decision different from that of the
19assigned commissioner or the administrative law judge shall be
20accompanied by a written explanation of each of the changes made
21to the decision.

22(b) Notwithstanding Section 307, an officer, employee, or agent
23of the commission that is personally involved in the prosecution
24or in the supervision of the prosecution of an adjudication case
25before the commission shall not participate in the decision of the
26case, or in the decision of any factually related adjudicatory
27proceeding, including participation in or advising the commission
28as to findings of fact, conclusions of law, or orders. An officer,
29employee, or agent of the commission that is personally involved
30in the prosecution or in the supervision of the prosecution of an
31adjudication case may participate in reaching a settlement of the
32case, but shall not participate in the decision of the commission to
33accept or reject the settlement, except as a witness or counsel in
34an open hearing or a hearing closed pursuant to subdivision (d).
35The Legislature finds that the commission performs both
36prosecutorial and adjudicatory functions in an adjudication case
37and declares its intent that an officer, employee, or agent of the
38commission, including its attorneys, may perform only one of
39those functions in any adjudication case or factually related
40adjudicatory proceeding.

P18   1(c) (1) Ex parte communications shall be prohibited in
2adjudication cases.

3(2) Any oral or written communications concerning procedural
4matters in adjudication cases between interested persons and
5decisionmakers, except the assigned administrative law judge,
6shall be prohibited.

7(d) Notwithstanding any other law, the commission may meet
8in a closed hearing to consider the decision that is being appealed.
9The vote on the appeal shall be in a public meeting and shall be
10accompanied with an explanation of the appeal decision.

11(e) Adjudication cases shall be resolved within 12 months of
12initiation unless the commission makes findings why that deadline
13cannot be met and issues an order extending that deadline. In the
14event that a rehearing of an adjudication case is granted, the parties
15shall have an opportunity for final oral argument.

16(f) (1) The commission may determine that the respondent
17lacks, or may lack, the ability to pay potential penalties or fines
18or to pay restitution that may be ordered by the commission.

19(2) If the commission determines that a respondent lacks, or
20may lack, the ability to pay, the commission may order the
21respondent to demonstrate, to the satisfaction of the commission,
22sufficient ability to pay potential penalties, fines, or restitution that
23may be ordered by the commission. The respondent shall
24demonstrate the ability to pay, or make other financial
25arrangements satisfactory to the commission, within seven days
26of the commission commencing an adjudication case. The
27commission may delegate to the attorney to the commission the
28determination of whether a sufficient showing has been made by
29the respondent of an ability to pay.

30(3) Within seven days of the commission’s determination of the
31respondent’s ability to pay potential penalties, fines, or restitution,
32the respondent shall be entitled to an impartial review by an
33administrative law judge of the sufficiency of the showing made
34by the respondent of the respondent’s ability to pay. The review
35by an administrative law judge of the ability of the respondent to
36pay shall become part of the record of the adjudication and is
37subject to the commission’s consideration in its order resolving
38the adjudication case. The administrative law judge may enter
39temporary orders modifying any financial requirement made of
40the respondent pending the review by the administrative law judge.

P19   1(4) A respondent that is a public utility regulated under a rate
2of return or rate of margin regulatory structure or that has gross
3annual revenues of more than one hundred million dollars
4($100,000,000) generated within California is presumed to be able
5to pay potential penalties or fines or to pay restitution that may be
6ordered by the commission, and, therefore, paragraphs (1) to (3),
7inclusive, do not apply to that respondent.

8

begin deleteSEC. 9.end delete
9begin insertSEC. 8.end insert  

Section 1701.3 of the Public Utilities Code is amended
10to read:

11

1701.3.  

(a) If the commission pursuant to Section 1701.1 has
12determined that a ratesetting case requires a hearing, the procedures
13prescribed by this section shall be applicable. The assigned
14commissioner shall determine prior to the first hearing whether
15the commissioner or the assigned administrative law judge shall
16be designated as the principal hearing officer. The principal hearing
17officer shall be present for more than one-half of the hearing days.
18The decision of the principal hearing officer shall be the proposed
19decision. An alternate decision may be issued by the assigned
20commissioner or the assigned administrative law judge who is not
21the principal hearing officer. The commission shall establish a
22procedure for any party to request the presence of a commissioner
23at a hearing. The assigned commissioner shall be present at the
24closing arguments of the case. The principal hearing officer shall
25present the proposed decision to the full commission in a public
26meeting. The alternate decision, if any, shall also be presented to
27the full commission at that public meeting. The alternate decision
28shall be filed with the commission and shall be served on all parties
29simultaneously with the proposed decision.

30The presentation to the full commission shall contain a record
31of the number of days of the hearing, the number of days that each
32commissioner was present, and whether the decision was completed
33on time.

34(b) The commission shall provide by regulation for peremptory
35challenges and challenges for cause of the administrative law judge.
36Challenges for cause shall include, but not be limited to, financial
37interests and prejudice. All parties shall be entitled to unlimited
38peremptory challenges in any case in which the administrative law
39judge has within the previous 12 months served in any capacity
40in an advocacy position at the commission, been employed by a
P20   1regulated public utility, or has represented a party or has been an
2interested person in the case.

3(c) (1) Ex parte communications are prohibited in ratesetting
4cases.

5(A) Oral communications may be permitted without any
6reporting obligation at any time by any decisionmaker if all parties
7are invited and given not less than three working days’ notice.

8(B) Written ex parte communications by any interested person
9may be permitted without any reporting requirement provided that
10copies of the communication are transmitted to all parties on the
11same day as the original communication. Written ex parte
12communications shall not be part of the record of the proceeding.

13(2) Oral communications concerning a procedural matter in
14ratesetting cases between interested persons and decisionmakers,
15except the assigned administrative law judge, are prohibited, except
16that an oral communication may be permitted at any time by any
17decisionmaker if all parties are invited and given not less than
18three working days’ notice.

19(3) Written communications concerning a procedural matter in
20ratesetting cases between interested persons and decisionmakers,
21except the assigned administrative law judge, are prohibited, except
22that a decisionmaker may permit a written communication by any
23party if copies of the communication are transmitted to all parties
24on the same day.

25(d) Any party has the right to present a final oral argument of
26its case before the commission. Those requests shall be scheduled
27in a timely manner. A quorum of the commission shall be present
28for the final oral arguments.

29(e) The commission may, in issuing its decision, adopt, modify,
30or set aside the proposed decision or any part of the decision based
31on evidence in the record. The final decision of the commission
32shall be issued not later than 60 days after the issuance of the
33proposed decision. Under extraordinary circumstances the
34commission may extend this date for a reasonable period. The
3560-day period shall be extended for 30 days if any alternate
36decision is proposed pursuant to Section 311.

37

begin deleteSEC. 10.end delete
38begin insertSEC. 9.end insert  

Section 1701.4 of the Public Utilities Code is amended
39to read:

P21   1

1701.4.  

(a) If the commission pursuant to Section 1701.1 has
2determined that a quasi-legislative case requires a hearing, the
3procedures prescribed by this section shall be applicable. The
4assigned administrative law judge shall act as an assistant to the
5assigned commissioner in quasi-legislative cases. The assigned
6commissioner shall be present for formal hearings. The assigned
7commissioner shall prepare the proposed rule or order with the
8assistance of the administrative law judge. The assigned
9commissioner shall present the proposed rule or order to the full
10commission in a public meeting. The report shall include the
11number of days of hearing and the number of days that the
12commissioner was present.

13(b) Ex parte communications shall be permitted. Any ex parte
14communication shall be reported by an interested person in
15accordance with subdivision (d) of Section 1701.1 and the
16procedures established by the commission for the service of that
17notice. No reporting shall be required for written ex parte
18communications that are transmitted to all parties on the same day
19as the original communication.

20(c) Any party has the right to present a final oral argument of
21its case before the commission. Those requests shall be scheduled
22in a timely manner. A quorum of the commission shall be present
23for the final oral arguments.

24(d) The commission may, in issuing its rule or order, adopt,
25modify, or set aside the proposed decision or any part of the rule
26or order. The final rule or order of the commission shall be issued
27not later than 60 days after the issuance of the proposed rule or
28order. Under extraordinary circumstances the commission may
29extend this date for a reasonable period. The 60-day period shall
30be extended for 30 days if any alternate rule or order is proposed
31pursuant to Section 311.

32

begin deleteSEC. 11.end delete
33begin insertSEC. 10.end insert  

Section 1701.6 is added to the Public Utilities Code,
34to read:

35

1701.6.  

(a) In addition to any penalty, fine, or other punishment
36applicable pursuant to Article 11 (commencing with Section 2100),
37the commission may assess civil sanctions upon any entity or
38person, other than a decisionmaker or employee of the commission,
39who violates, fails to comply with, or procures, aids, or abets any
40violation of, the ex parte communication requirements of this
P22   1article or those adopted by the commission pursuant to this article.
2The civil sanctions may include civil penalties, adverse
3consequences in commission proceedings, or other appropriate
4commission orders directed at the entity, person, or both the entity
5and person, committing the violation.

6(b) (1) Except as provided in paragraph (2), a civil penalty
7assessed shall not exceed fifty thousand dollars ($50,000) per
8violation. Each day of a continuing violation is a separate violation.
9If the violation consists of engaging in a communication that is
10prohibited by the ex parte communication requirements, each day
11that the violation is not disclosed to the commission and to parties
12of record in the formal proceeding in which the communication
13occurred shall constitute a separate violation. If the violation
14consists of failing to file a required notice of a permissible ex parte
15communication or filing a notice of a permissible ex parte
16communication that is inaccurate or incomplete, each day that the
17violation is not remedied shall constitute a separate violation.

18(2) If the entity or person may obtain, by violating the ex parte
19communication requirements, financial benefits that exceed the
20maximum amount of civil penalty allowable pursuant to paragraph
21(1), the commission may impose a civil penalty up to the amount
22of those financial benefits.

23(c) Civil penalties assessed pursuant to subdivision (b) upon
24entities whose rates are determined by the commission shall be in
25the form of credits to the customers of that entity. Civil penalties
26collected from other entities shall be deposited in the General Fund.

27(d) In determining the appropriate civil sanctions, the
28commission shall consider the following factors:

29(1) The severity of the violation.

30(2) The conduct of the entity or person, including the level of
31experience of the entity or person in participating in commission
32proceedings.

33(3) The financial resources of the entity or person.

34(4) The totality of the circumstances in furtherance of the public
35interest.

36

begin deleteSEC. 12.end delete
37begin insertSEC. 11.end insert  

Section 1701.7 is added to the Public Utilities Code,
38to read:

39

1701.7.  

(a) The Attorney General may bring an enforcement
40action in the Superior Court for the City and County of San
P23   1Francisco against a decisionmaker or employee of the commission
2who violates, fails to comply with, or procures, aids, or abets any
3violation of, the ex parte communication requirements in this article
4or those adopted by the commission pursuant to this article. The
5court shall expedite its review of the action to provide effective
6and timely relief.

7(b) (1) Notwithstanding Section 1759, in an enforcement action
8brought pursuant to this section, the court may grant appropriate
9relief, including disqualification of the decisionmaker from one
10or more proceedings and civil penalties not to exceed fifty thousand
11dollars ($50,000) for each violation.

12(2) If the decisionmaker or employee may obtain, by violating
13the ex parte communication requirements, financial benefits that
14exceed the civil penalties provided in paragraph (1), the court may
15impose a civil penalty up to the amount of those financial benefits.

16(c) In determining the appropriate relief, the court may consider
17the following factors:

18(1) The severity of the violation.

19(2) The conduct of the decisionmaker or employee, including
20whether the decisionmaker or employee knowingly violated the
21ex parte communication requirements.

22(3) The financial resources of the decisionmaker or employee.

23(4) The totality of the circumstances in furtherance of the public
24interest.

25(d) The Attorney General may compromise the enforcement
26action subject to approval by the court.

27(e) Civil penalties collected pursuant to this section shall be
28deposited into the Litigation Deposits Fund established pursuant
29to Article 9 (commencing with Section 16425) of Chapter 2 of
30Part 2 of Division 4 of Title 2 of the Government Code.

31

begin deleteSEC. 13.end delete
32begin insertSEC. 12.end insert  

No reimbursement is required by this act pursuant to
33Section 6 of Article XIII B of the California Constitution because
34the only costs that may be incurred by a local agency or school
35district will be incurred because this act creates a new crime or
36infraction, eliminates a crime or infraction, or changes the penalty
37for a crime or infraction, within the meaning of Section 17556 of
38the Government Code, or changes the definition of a crime within
P24   1the meaning of Section 6 of Article XIII B of the California
2Constitution.



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