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 
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          |Author:    |Hill                                                 |
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          |Version:   |2/11/2016    As Introduced                           |
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          |Urgency:   |No                     |Fiscal:      |Yes             |
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          |Consultant:|Nidia Bautista                                       |
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          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)








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          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  








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          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. 









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          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  








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          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








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          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








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          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."


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