BILL ANALYSIS Ó
SB 660
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Date of Hearing: August 26, 2015
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Jimmy Gomez, Chair
SB 660
(Leno) - As Amended August 19, 2015
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Urgency: No State Mandated Local Program: YesReimbursable:
No
SUMMARY:
This bill modifies the governance and operations of the
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California Public Utilities Commission (PUC). Specifically,
this bill:
1)Requires the PUC to appoint a Chief Administrative Law Judge
(ALJ) to be responsible for executive and administrative
management and oversight of the Administrative Law Division.
Authorizes the PUC to delegate management and oversight
functions to committees of two Commissioners,
2)Requires the Chief ALJ, rather than the PUC President, to keep
a true and full record of all Commission proceedings.
3)Requires the PUC to adopt procedures for the disqualification
of Commissioners due to bias or prejudice. Requires a
Commissioner or ALJ to be disqualified from ratesetting or
adjudicatory proceedings for bias or prejudice based on
specified criteria.
4)Authorizes the PUC to delegate management and oversight
functions to committees of two Commissioners, and requires the
full Commission to vote in an open meeting when assigning
Commissioners to a new proceeding.
5) Modifies and expands ex parte communication rules and
prohibitions.
6)Authorizes the PUC to impose civil penalties on anyone who
violates ex parte provisions. Authorizes the Attorney General
to bring enforcement actions on PUC desionmakers and employees
in the San Francisco Superior Court.
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FISCAL EFFECT:
Increased PUC costs of an estimated $900,000 including $430,000
limited - term and $470,000 ongoing costs, to implement and
enforce the provisions of the bill and hold additional public
meetings, as necessary (Public Utilities Reimbursement Account).
COMMENTS:
1)Purpose. According to the author, recent events and on-going
revelations about the internal workings of the PUC indicate
operational reforms are necessary. This bill modifies the
powers of the PUC President, creates new standards for
considering whether a Commissioner should be recused from
decisionmaking based on bias or prejudice, and sets new rules
for ex parte communication.
2)Background. The PUC is established in the California
Constitution and is governed by five full-time Commissioners,
appointed by the governor and confirmed by the Senate. It is
staffed by approximately 1,000 individuals who, together,
regulate privately owned electric, natural gas,
telecommunications, water, railroad, rail transit, and
passenger transportation companies. Staff includes four
personal advisors to each Commissioner, except five to the
president, as well as the 42 judges of the Administrative Law
Division - attorneys, engineers and accountants who prepare
the docket for all official filings, including maintenance of
the official record of proceedings.
The PUC is subject to the Bagley-Keene Open Meetings Act,
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which requires a state body to take actions only at a public
meeting following the public posting of an agenda describing
the item for proposed action at least 10 days prior to the
meeting. Any private congregation of a majority of the members
of a state body at the same time and place to hear, discuss,
or deliberate upon any item that is within its jurisdiction is
unlawful. However, only the Supreme Court and the Court of
Appeal have the jurisdiction over any order or decision of the
PUC, including Bagley-Keene Open meeting requirements.
3)PUC Deficiencies. The PUC has recently undergone a number of
audits related to its budget, transportation program, natural
gas pipeline safety program, and other internal functions.
The audit findings raised questions regarding the PUC's
ability to manage its core functions. An audit by the State
Auditor in March of 2014 found the Commission lacks adequate
process for the sufficient oversight of utility balancing
accounts to protect ratepayers from unfair rate increases.
A recent report commissioned by the PUC found ex parte
communications to be frequent, pervasive, and at least
sometimes outcome-determinative in ratesetting cases.
This bill addresses audit findings of mismanagement of public
funds, poor safety oversight, ex-parte communication
violations, and failed governance.
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Analysis Prepared by:Jennifer Galehouse / APPR. / (916)
319-2081