Amended in Assembly September 4, 2015

Amended in Assembly August 19, 2015

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 Bill No. 660

Introduced by Senators Leno and Hueso

February 27, 2015

An act to amend Sections 308, 309.6, 1701.1, 1701.2, 1701.3, 1701.4, and 1701.5 of, and to add Sections 305.5, 307.5, 1701.6, 1701.7, and 1701.8 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.

This 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 appoint a chief administrative law judge who would be responsible for the begin delete commission’s executive and administrative management and end delete oversight of the administrative law judge division and would require the chief administrative law judge to organize, coordinate, supervise, and direct the operations of the administrative law judge division as directed by the commission, consistent with commission policies and priorities.

Existing law requires the executive director to keep a full and true record of all proceedings of the commission.

This bill would delete that requirement and would instead require the chief administrative law judge to keep a full and true record of all proceedings of the commission.

(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 for 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 require that the commission determine whether every proceeding, not just those requiring a hearing, is a quasi-legislative, adjudication, or ratesetting proceeding. The 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 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 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 the commission to establish and maintain a communications log summarizing all oral or written ex parte communications that occur between an interested person and begin delete the commission, 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, or the administrative law judge assigned to the proceeding. end delete begin insert any decisionmaker. end insert The bill would require the commission to post the communications log 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. If a prohibited ex parte communication is not disclosed until after the commission has issued a decision on the matter to which the communication pertained, a party not participating in the communication would be authorized to file a petition to rescind or modify the decision. 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 in the communications log maintained by the commission.

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 expressly make the prohibitions upon ex parte communications that relate to adjudicatory or ratesetting proceedings applicable to ex parte communications that occur at conferences, as defined. The bill would also make the requirements that pertain to ex parte communications that relate to quasi-legislative proceedings applicable to ex parte communications that occur at conferences.

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.

begin insert

This bill would incorporate additional changes in Section 308 of the Public Utilities Code, proposed by SB 48, to be operative only if SB 48 and this bill are both chaptered and become effective on or before January 1, 2016, and this bill is chaptered last.

end insert

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:

SECTION 1.  

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

305.5.  

begin delete (a) end delete begin delete   end delete The commission may delegate specific management
and internal oversight functions to committees composed of two
commissioners. Committees shall meet regularly with staff and
shall report to the commission for additional guidance or approval
of decisions pertaining to the operations of the commission.

begin delete

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

end delete

SEC. 2.  

Section 307.5 is added to the Public Utilities Code, to
read:

307.5.  

(a) The commission shall appoint a chief administrative
law judge, who shall hold office at the pleasure of the commission.

(b) The chief administrative law judge shall be responsible for
the begin delete commission’s executive and administrative management and end delete
oversight of the administrative law judge division and shall
organize, coordinate, supervise, and direct the operations of the
division as directed by the commission, consistent with commission
policies and priorities.

(c) The chief administrative law judge shall keep a full and true
record of all proceedings of the commission.

SEC. 3.  

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

308.  

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

(b) The executive director shall issue all necessary process,
writs, warrants, and notices, and perform any other duties as the
commission prescribes. The president or, by vote, the commission
may authorize the executive director to dismiss complaints or
applications when all parties are in agreement thereto, in
accordance with rules that the commission may prescribe.

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

begin insert

begin insert SEC. 3.5. end insert   

end insert

begin insert Section 308 of the end insert begin insert Public Utilities Code end insert begin insert is amended
to read: end insert

308.  

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

(b) The executive director shall begin delete keep a full and true record of
all proceedings of the commission, end delete issue all necessary process,
writs, warrants, and notices, and perform begin delete such end delete begin insert any end insert other duties begin delete as
the president, or vote of the commission, prescribes. The president end delete
begin insert the commission prescribes. The commission end insert may authorize the
executive director to dismiss complaints or applications when all
parties are in agreement thereto, in accordance with rules that the
commission may prescribe.

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

SEC. 4.  

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 any of the following:

(A) Actions taken during the proceeding.

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

(C) 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 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.

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

SEC. 5.  

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

1701.1.  

(a) The begin delete commission, consistent with due process,
public policy, and statutory requirements, shall determine whether
a proceeding requires a hearing. The end delete commission shall determine
whether each proceeding is a quasi-legislative, an adjudication, or
a ratesetting begin delete proceeding. end delete begin insert proceeding and, consistent with due
process, public policy, and statutory requirements, determine
whether the proceeding requires a hearing. end insert 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.
If that decision is not appealed to the commission within that time
period it shall not be subsequently subject to judicial review. 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 begin delete hearing end delete
begin insert proceeding end insert or ratesetting begin delete hearing end delete begin insert proceeding end insert 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 begin delete hearing end delete begin insert end insert
begin insert proceeding end insert shall assign one or more commissioners to oversee the
case and an administrative law begin delete judge end delete begin insert judge, where appropriate, end insert
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.

(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)  begin delete “En banc hearing,” end delete begin insert “All party conference,” end insert for purposes of
this article, is a public hearing held on the record before a quorum
of commissioners at which parties to a proceeding shall have the
right to participate and let their views be heard 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 commission that 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 party to 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 may invest in the shares or operations of
any party to 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
begin delete section, end delete begin insert article, end insert 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.

(3) For adjudication and ratesetting 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, 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
one working day 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.

(iii) A complete and comprehensive description of the interested
person’s and the decisionmaker’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 promptly prepare and
file a notice that includes the information required by subparagraph
(A).

(ii) If the interested person has timely submitted the notice
required by subparagraph (A), the decisionmaker shall either
promptly file a notice affirming the factual representations made
by the interested person in the notice or promptly file a notice
correcting or supplementing the factual representations made by
the interested person.

(4) The commission shall not take any vote on a matter where
a notice 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 a prohibited 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
are related to an adjudication or ratesetting proceeding shall be
prohibited consistent with the ex parte communications
requirements of this article.

(B) Ex parte communications that occur at conferences and that
are related to 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 record of the proceedings.

(f) The commission may meet in a closed session to discuss
administrative matters begin delete not related to a proceeding before the
commission, end delete so long as no collective consensus is reached or vote
taken on any matter requiring a vote of the commissioners. begin insert The
commission shall, by rule, adopt and publish a definition of
“administrative matters” for purposes of this section. end insert

SEC. 6.  

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

1701.2.  

If the commission pursuant to Section 1701.1 has
determined that an adjudication case requires a hearing, the
procedures prescribed by this section shall be applicable.

(a) The 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)  begin delete The end delete begin insert Upon request made by a majority of parties, the end insert
commission shall hold an begin delete en banc hearing end delete begin insert all-party conference end insert
before a quorum of commissioners, in all adjudication cases in
which an appeal has been filed, at which all parties have an
opportunity to be heard, unless all parties waive this requirement
and a majority of commissioners concur with that waiver. The
commission shall adopt rules for implementation of this
requirement, which shall provide for 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 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 (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 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.

SEC. 7.  

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

1701.3.  

If the commission pursuant to Section 1701.1 has
determined that a ratesetting case requires a hearing, the procedures
prescribed by this section shall be applicable.

(a) 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.

(b) 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.

(c) 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 the closing arguments of the case.

(d) 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.

(e) 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.

(f) The commission shall provide by regulation 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 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.

(g) (1) Ex parte communications are prohibited in ratesetting
cases.

(A) Oral communications may be permitted by a decisionmaker
if all parties are invited and given not less than three working days’
notice.

(B) Written ex parte communications by any interested person
may be permitted provided that copies of the communication are
transmitted to all parties on the same day as the original
communication. Written ex parte communications shall not be part
of the record of the proceeding.

(C) The commission may establish a period during which no
oral or written 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 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.

(h)  begin delete The end delete begin insert Upon request made by a majority of parties, the end insert
commission shall hold an begin delete en banc hearing end delete begin insert all-party conference end insert
before a quorum of commissioners, after the proposed decision is
issued in all contested ratesetting cases, at which all parties have
an opportunity to be heard, unless all parties waive this requirement
and a majority of commissioners concur with that waiver. The
commission shall adopt rules for implementation of this
requirement, which shall provide for the broadest participation by
parties to the proceeding that the commission can reasonably
accommodate, consistent with the commissioners’ other duties
and responsibilities.

(i) 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. 8.  

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

1701.4.  

If the commission pursuant to Section 1701.1 has
determined that a quasi-legislative case requires a hearing, the
procedures prescribed by this section shall be applicable.

(a) The assigned administrative law judge begin insert and any assigned
technical advisory staff end insert 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
assistance of the administrative law begin delete judge. end delete begin insert judge and any assigned
technical advisory staff. end insert 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.

(b) Ex parte communications shall be permitted. Any ex parte
communication shall be reported in compliance with Section
1701.6. No reporting shall be required for written ex parte
communications that are transmitted to all parties on the same day
as the original communication.

(c)  begin delete The end delete begin insert Upon request made by a majority of parties, the end insert
commission shall hold an begin delete en banc hearing end delete begin insert all-party conference end insert
before a quorum of commissioners, after the proposed decision is
issued in all contested quasi-legislative cases, unless all parties
waive this requirement and a majority of commissioners concur
with that waiver. The commission shall adopt rules for
implementation of this requirement, which shall provide for the
broadest participation by parties to the proceeding that the
commission can reasonably accommodate, consistent with the
commissioners’ other duties and responsibilities.

(d) 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. 9.  

Section 1701.5 of the Public Utilities Code is amended
to read:

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. begin delete No
single order may extend the deadline for more than 60 days. end delete

(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. 10.  

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

1701.6.  

(a) The commission shall establish and maintain a
communications log summarizing all oral begin delete or end delete begin insert and end insert written ex parte
communications, as defined in Section 1701.1.

(b) The communications log shall include a summary of all oral
and written communications that meet the definition of an ex parte
communication that occur between an interested person and any
begin delete of the following officials: end delete begin insert decisionmaker. end insert

begin delete

(1) A commissioner.

end delete begin delete

(2) The attorney for the commission.

end delete begin delete

(3) The executive director of the commission.

end delete begin delete

(4) The personal staff of a commissioner, if the staff is acting
in a policy or legal advisory capacity.

end delete begin delete

(5) The chief administrative law judge of the commission.

end delete begin delete

(6) The administrative law judge assigned to the proceeding.

end delete

(c) Each record of a communication in the communication log
shall include the date of each communication, the persons involved
in the communication, begin delete the topics discussed, end delete and, to the extent
known, any proceedings that were the subject of each
communication. Ex parte communications in the summary log
shall be reported no later than three working days after the
communication.

(d) The communication log shall be made available to the public
on the commission’s Internet Web site not later than July 1, 2016.

SEC. 11.  

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

1701.7.  

(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 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. 12.  

Section 1701.8 is added to the Public Utilities Code,
to read:

1701.8.  

(a) The Attorney General may bring an enforcement
action in the Superior Court for the City and County of San
Francisco 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. The
court shall expedite its review of the action to provide effective
and timely relief.

(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.

(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.

begin insert

begin insert SEC. 13. end insert   

end insert begin insert

Section 3.5 of this bill incorporates amendments to
Section 308 of the Public Utilities Code proposed by both this bill
and Senate Bill 48. It shall only become operative if (1) both bills
are enacted and become effective on or before January 1, 2016,
(2) each bill amends Section 308 of the Public Utilities Code, and
(3) this bill is enacted after Senate Bill 48, in which case Section
3 of this bill shall not become operative.

end insert

begin delete SEC. 13. end delete
begin insert SEC. 14. end insert   

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