BILL ANALYSIS Ó SENATE COMMITTEE ON ENERGY, UTILITIES AND COMMUNICATIONS Senator Ben Hueso, Chair 2015 - 2016 Regular Bill No: SB 1017 Hearing Date: 3/29/2016 ----------------------------------------------------------------- |Author: |Hill | |-----------+-----------------------------------------------------| |Version: |2/11/2016 As Introduced | ----------------------------------------------------------------- ------------------------------------------------------------------ |Urgency: |No |Fiscal: |Yes | ------------------------------------------------------------------ ----------------------------------------------------------------- |Consultant:|Nidia Bautista | | | | ----------------------------------------------------------------- SUBJECT: Public Utilities Commission: public availability of utility supplied documents DIGEST: This bill would authorize the California Public Utilities Commission (CPUC) to adopt rules providing for the disclosure of information furnished to the commission by a CPUC-regulated utility or corporation and not require a vote of the CPUC or order of a commissioner for every disclosure of matters marked as confidential by the utility. ANALYSIS: Existing law: 1)Establishes the public has a right of access to information concerning the conduct of the people's business, and, therefore, the meetings of public bodies and the writings of public officials and agencies shall be open to public scrutiny. (Article I of the California Constitution, § 3 (b) (1)) 2)Requires every public utility to provide information to the CPUC including specific answers to all questions posed by the CPUC. (Public Utilities Code § 581) 3)Requires every public utility to deliver copies of any or all maps, profiles, contracts, agreements, franchises, reports, books, accounts, papers, and records in its possession or in any way relating to its property or affecting its business, and also a complete inventory of all its property. (Public Utilities Code § 582) SB 1017 (Hill) Page 2 of ? 4)Provides that no information provided to the CPUC by a public utility or its subsidiary or affiliate shall be open to the public except on the order of the CPUC or a commissioner in the course of a hearing or proceeding. Also provides that any present or former officer or employee of the CPUC who divulges information is guilty of a misdemeanor. (Public Utilities Code § 583) 5)Requires public utilities to furnish reports periodically, special, or both concerning any matter about which the CPUC is authorized to inquire to keep itself informed or which it is required to enforce. (Public Utilities Code § 584) 6)Requires the public utilities to provide access to all computer models used by the public utility, in any rate proceeding or proceeding that may influence a rate, to the CPUC. (Public Utilities Code § 585) 7)Finds and declares that access to information concerning the conduct of the people's business is a fundamental and necessary right of every person in this state and establishes the California Public Records Act (CPRA). (Government Code § 6250, et seq) 8)Provides that agencies shall justify withholding any record by demonstrating that the record in question is exempt under express provisions of the CPRA or that on the facts of the particular case the public interest service by not disclosing the record clearly outweighs the public interest served by the disclosure of the record. (Government Code § 6255) This bill authorizes the CPUC to adopt rules providing for the disclosure of information furnished to the CPUC by a public utility, a subsidiary, an affiliate, or a corporation holding a controlling interest in a public utility. Background California Public Records Act and the CPUC. The California Constitution and the CPRA require that most government records be available to the public and, as such, allow agencies, including the CPUC, wide latitude to establish policies for public access to their records. However, unique among other agencies, the CPUC is also governed by statute nearly as old as the agency itself, Section 583 of the Public Utilities Code, which states that no information furnished to the CPUC by a public utility "except those SB 1017 (Hill) Page 3 of ? matters specifically required to be open to public inspection by this part, shall be open to public inspection or made public except on order of the CPUC, or by the CPUC or a commissioner in the course of a hearing or proceeding. Any present or former officer or employee of the CPUC who divulges any such information is guilty of a misdemeanor." As a result, the CPUC rules provide that regulated entities can stamp their documents and information as confidential (which they routinely do) and place the burden on the CPUC to determine whether the claims of confidentiality are justified. General Order (GO) 66-C governs disclosure of CPUC records. GO 66-C is a five-page document which largely restates existing statutory authority. These rules have mostly remained the same since 1974, when they were first adopted, with some amendments in 1982. Among the rules in GO 66-C is section (2.2(a)) that identifies as confidential "records of investigations and audits made by the CPUC, except to the extent disclosed at a hearing or by formal CPUC action." GO 66-C also exempts from disclosure personnel records, other than job classification, job specification, or salary range. Efforts to streamline. As a result of the threat of criminal liability inherent in Section 583, release of information in investigations and audits is generally handled on a case-by-case basis by a vote of the CPUC, or decisions by the assigned commissioner or administrative law judge (ALJ). Regulated utilities and companies have routinely marked many of their documents "confidential subject to Section 583 and GO 66" which has generally slowed the ability of the agency to satisfy public records requests in a prompt manner. Over the years, often prompted by tragedy, the CPUC has considered streamlining the process to disclose information. In the late 1990s, after a homeowner was injured from coming into contact with an overhead electrical line, the CPUC stated its intent to streamline the procedures for release of accident reports and records of investigations. In 2004, legislation was introduced by Senator Bowen to attempt to reverse the presumption from the CPUC to utilities by stating that all records furnished would be considered public in the absence of a CPUC order. The bill was ultimately amended to require the CPUC to examine its procedures related to Section 583 confidentiality requirements and energy procurement processes. As part of the effort, the CPUC stated its intention to review changes to GO 66-C. However, the effort was abandoned within a year after several of the stakeholders expressed concerns and opposition to changes. SB 1017 (Hill) Page 4 of ? San Bruno Pipeline Explosion. In the aftermath of the 2010 PG&E San Bruno Pipeline explosion which killed eight residents and decimated an entire neighborhood, the CPUC experienced a marked increase in public records requests. Inundated with public records requests stemming from the explosion, including requests from the City of San Bruno, the CPUC struggled to satisfy the requests in a timely and efficient manner. In light of these and other frustrations with the agency's response, legislative bills were introduced in 2012 to attempt to help streamline the process for disclosure. However, the bills stalled in the Legislature. In March of the same year, the CPUC embarked on an effort to streamline the procedures for disclosing some information to the public with a priority on safety-related records. According to the CPUC, in the past, the application of GO 66-C Section 2.2(a) has "unnecessarily delayed disclosure of records of completed safety investigations and audits." Current CPUC efforts. In February 2013, the CPUC adopted resolution (L-436) which established disclosure procedures for categories of routine safety-related records, after any appropriate redactions, without requiring a vote of the CPUC or an ALJ ruling. Specifically, these categories of documents include: (1) CPUC-generated reports, summaries, and correspondence regarding completed CPUC safety-related inspections, audits, and investigations; and (2) annual reports that gas operators file with the United States Department of Transportation Pipeline and Hazardous Materials Safety Administration (PHMSA). The CPUC created a safety information portal on its website to host the documents and future records. The resolution also stated the CPUC's intent to open formal rulemaking proceeding to address "improving the public's access to records that are not exempt under the CPRA or other state or federal law, and the CPUC's ability to process records requests and requests for confidential treatment in an efficient, well-reasoned, and consistent manner." The CPUC directed their staff to hold workshops to discuss additional safety-related disclosures that should be considered. Rulemaking opened. As part of the settlement agreement between the CPUC and the City of San Bruno related to public records requests for emails between CPUC and PG&E, the CPUC agreed to open a rulemaking by December 31, 2014 to modify GO 66-C and improve public access to public records. On November 6, 2014, the CPUC opened an order instituting a rulemaking to improve public access to public records pursuant to the CPRA and address proposed changes to GO 66-C. As of this analysis, the rulemaking remains open with SB 1017 (Hill) Page 5 of ? active participation from several parties. The CPUC held a public workshop on the issue on February 2, 2016. In the meantime the CPUC continues to receive additional requests for public records, receiving over 400 CPRA requests for information in 2015 and currently on pace to receive more in 2016. Governor's message. In vetoing all of the CPUC reform bills passed by the Legislature last fall, the governor included his desire to reform Section 583 in veto messages for SB 18, SB 48 and AB 825. In response to proposals in the bills to allow parties to bring lawsuits in Superior Court against the CPUC related to compliance with Open Meetings Act and CPRA, the governor stated: "amending Section 583 of the Public Utilities Code to require more information to be publicly available is a much better way to ensure that the public is provided with this information." The governor's interest to reform the Section 583 was further acknowledged in the Governor's Office recent release, CPUC Principles for Reform document which states: Public Utilities Code section 583 should be revised to better enable the CPUC to respond in a full, complete, and timely manner to CPRA requests and to make documents in proceedings available to the public in a timely and complete fashion. "Or Rule." The main distinction between an order versus a rule is the decisionmakers and the process. The communications and trade associations opposing the bill cite their concern that commissioners may delegate to staff decisions regarding what is considered confidential and without the benefit of public notice and the opportunity to have their perspectives heard. The coalition of companies and associations opposed to the bill suggest that the current system is "balanced" and "has worked perfectly for decades." They are concerned that the current practice and understanding of having information designated as "confidential" until a dispute arises would be undermined by the addition of "or rule." The coalition argues that a CPUC "rule" could simply attempt to delegate the decision-making process to staff without notice to the regulated companies or the opportunity to be heard. The author argues that language proposed in this bill is consistent with the CPUC's current powers and its proposal in the current, yet to be finalized, rulemaking, reflective of this consistency. Double-referred. Should this bill be approved by this committee, it will be referred to the Senate Committee on Judiciary. Prior/Related Legislation SB 1017 (Hill) Page 6 of ? AB 825 (Rendon, 2015) would have proposed a suite of reforms to make the CPUC more accessible and transparent to the public, including requiring a public utility to file a public version of a document that has been claimed to contain confidential information. The bill was vetoed by the governor. AB 1541 (Dickinson, 2012) among many of the provisions of the bill, it would have added to the list of records that the CPUC may exempt from disclosure, as well as, required disclosure of CPUC orders or recommendations regarding an accident unless the CPUC determined it is proprietary, security-related, market-sensitive information, or personally identifiable information. The bill was held in Senate Committee on Appropriations. SB 1000 (Yee, 2012) would have required the CPUC to revise its guidelines, resolutions, and general orders for the disclosure of public records and required the CPUC investigation orders, recommendations, and accident reports to be made publicly available pursuant to the CPRA. The bill died in Assembly Committee on Utilities and Commerce. SB 1488 (Bowen, Chapters 690, Statutes of 2004) required the CPUC to provide public access to public utility information received by the CPUC, as specified. SB 1488 was subsequently amended to require the CPUC to examine its public disclosure practices to provide for meaningful public participation and open decision-making. FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No SUPPORT: None received. OPPOSITION (unless amended): AT&T CTIA Consolidated Communications Frontier Communications Sprint SB 1017 (Hill) Page 7 of ? T - Mobile TechNet Verizon ARGUMENTS IN SUPPORT: According to the author, AB 1017 would clarify that the CPUC may develop regulations to permit streamlined public access to safety-related information without requiring a vote of the commissioners to release public records. These regulations allow CPUC staff to produce public records to requestors without fear of utilities pressing for criminal charges against them. The author argues that Section 583 results in a strict prohibition against release of utility-furnished documents without a vote of the CPUC - under pain of misdemeanor - and that this is inconsistent with the CPRA (and California Constitution) presumption that documents used by public officials to make decisions be available to the public. The author further states, much information furnished by the CPUC-regulated utilities and other service providers should be withheld from the public - such as information that would disrupt competitive markets or would expose critical infrastructure to security threats - but the CPUC needs to be able to more quickly provide records not exempt from the CPRA to the public and be overburdened by indulging every unconsidered utility wish for confidential treatment with a full vote of the CPUC to deny it. The solution is to ensure the CPUC has sufficient discretion to release public records that do not merit confidential treatment without a CPUC vote. ARGUMENTS IN OPPOSITION: The communications companies and trade associations opposed to this bill express concern that the proposed changes to Section 583 "could readily lead to the improper and unlawful public disclosure of highly sensitive and confidential information, without notice and an opportunity to be heard." They explicitly raise concerns about "delegating the CPUC decision-making process to staff, rather than the current due process protections that are included in the procedures that are necessary predicates to an order." -- END --