BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
SB 660 (Leno) - Public Utilities Commission.
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|Version: May 6, 2015 |Policy Vote: E., U., & C. 7 - 2 |
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|Urgency: No |Mandate: Yes |
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|Hearing Date: May 18, 2015 |Consultant: Marie Liu |
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This bill meets the criteria for referral to the Suspense File.
Bill
Summary: SB 660 would make changes to the ex parte
communications at the CPUC.
Fiscal
Impact:
Cost pressures of $190,000 annually to the Public Utilities
Reimbursement Account (special) for additional staff to
support the activities of committees.
One-time costs of $160,000 annually for two years to the
Public Utilities Reimbursement Account (special) for a
proceeding to determine rules for ALJ or commissioner
disqualification from a case.
One-time costs of $160,000 annually for two years and followed
by on-going costs of $235,000 annually to the Public Utilities
Reimbursement Account (special) for the creation and
implementation of new ex parte rules.
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Background: The CPUC is governed by five members appointed by the Governor
and approved by the Senate Rules Committee. The CPUC is
generally empowered to regulate privately owned public utilities
in California. Policies and actions of the CPUC are generally
made through a proceeding. Each proceeding is assigned a lead
commissioner and an administrative law judge (ALJ). ALJs prepare
proposed decisions which may be adopted in whole or in part by
the commission.
Substantive communications outside of the public record that
occurs between a decisionmaker and a party with an interest in a
CPUC proceeding are known as "ex parte" communications. As these
communications can conflict with the need for public decision
making, the CPUC is required under the existing law to have
regulations that require the reporting of ex parte
communications within three working days of the communication
having occurred. These regulations require specific information
about the communication including the form which it occurred,
the identity of the recipient and the person initiating the
communication and the names of any other parties present, as
well as a description of the communication. The requirement to
report ex parte communication falls with the interested party,
not the CPUC decisionmaker.
The CPUC has three types of proceedings, which is its regulator
and decision making process, each of which have different
existing ex parte communication rules.
1.Adjudication Cases: Ex parte communications are prohibited.
2.Ratesetting Cases: Ex parte communications are prohibited
except under specified conditions. Oral ex parte
communications is allowed with a commissioner if all
interested parties are invited and given at least three days'
notice. Written ex parte communication is permitted if copies
are transmitted to all parties on the same day. If an
individual ex parte communication meeting is granted to any
party, all other parties shall also be granted individual
meetings of similar duration.
3.Quasi-legislative Cases: Ex parte communications are allowed
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without restriction.
Proposed Law:
This bill would make a number of changes to clarify, make
consistent, and strengthen ex parte communications at the CPUC.
Specifically, this bill would:
Remove the president's ability to solely direct the executive
director, the attorney, and other staff of the commission and
instead require the staff to be directed by the entire
commission.
Authorize the commission to delegate specific management and
internal oversight functions to committees comprised of two
commissioners.
Require the commission to vote in an open meeting on the
assignment or reassignment of any proceeding.
Require the CPUC to adopt procedures on the disqualification
of commissioners and require that a commissioner or ALJ be
disqualified under specified conditions.
Require the commission to specify procedural matters that do
not constitute an ex parte communication in its Rules of
Practice and Proceedure.
Adds specificity as to who is a person with a financial
interest and who is a decision maker for the purposes of
determining ex parte communications.
Require reporting of ex parte communications by the
decisionmaker
Require the CPUC to establish rules for handling prohibited ex
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parte communications.
Prohibit ex parte communication from being part of the record
of any proceeding and prohibit its consideration in the CPUC's
resolution of contested issues.
In an adjudication proceeding, explicitly prohibit any oral or
written communication concerning procedural issues between
parties or persons with an interest and decisionmakers except
the assigned ALJ
In a ratesetting proceeding, continue to allow written and
oral communication under specified conditions, but would
prohibit ex parte communication regarding procedural issues
except with the assigned ALJ or with a commissioner under
specified conditions.
In a quasi-legislative proceeding, continue to allow ex parte
communications but require all such communications to be
reported within three working days with the commission in
accordance with procedures established by the CPUC.
Make a violation of the ex parte communications rules
punishable by an unspecified fine or by imprisonment, or both.
Related
Legislation: SB 48 (Hill) would make various changes to the
internal governance, annual reporting requirements, and meeting
requirements of the CPUC. SB 48 will be heard by the Senate
Appropriations Committee on May 18, 2015.
Staff
Comments: This bill will change the internal governance of the
CPUC by specifying that the executive director, chief counsel,
and staff operated under the direction of the commission as a
whole, not just the president. The CPUC notes potential costs,
ranging from minimal to hundreds of thousands of dollars,
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associated with this change as more decisions would need to be
made in meetings in order for the commission to provide
direction. Staff notes that historically the commission was
responsible for directing the staff. This changed in 1999 with
the passage of SB 33 (Peace) which gave the president the sole
power to direct staff in an attempt to improve accountability.
Given that there were no potential savings anticipated with the
empowering of the president when SB 33 was heard by the Assembly
Appropriations Committee, staff assumes that the costs of
removing the powers of the president are likely to be minor and
absorbable.
This bill would authorize the creation of committees comprised
of two commissioners. The CPUC notes that the CPUC has initiated
such committees recently and has experienced some procedural
difficulties, such as assuring that the Bagley-Keene Open
Meetings Act is being followed. The CPUC believes that the
committees would best be implemented with two additional staff-
one to maintain public access to these committees and one to
support subject matter staff. As this bill authorizes, but does
not require the creation of these committees, such staff costs
would be cost pressures.
The CPUC would need to conduct a proceeding to adopt the
procedures by which an ALJ or commissioner may be disqualified
from a case. The CPUC estimates that it would need one ALJ for
two years for this purpose at an annual cost of $160,000.
This bill would require a number of modifications to the CPUC's
existing ex parte rules. The CPUC estimates that it would incur
one-time proceeding costs to make the changes required by this
bill. Once the rules are updated, the CPUC estimates that it
will need additional staff to track, manage, and report ex parte
communications especially since reporting of ex parte
communications would be the responsibility of both the
decisionmaker and the interested party.
This bill largely restricts discussions of procedural issues
with the assigned ALJ. The CPUC notes that this will likely have
minor and absorbable costs. Staff notes that the CPUC has a
public advisor's office which is to provide procedural
information and advice to individuals and groups who want to
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participate in CPUC proceedings.
By establishing a fine for prohibited ex parte communications,
the CPUC may incur legal costs. These costs would be based on
the frequency of violations.
This bill constitutes a state mandate as it creates a new crime.
However, under the California Constitution, costs associated
with this mandate are not reimbursable.
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