BILL ANALYSIS Ó
SENATE JUDICIARY COMMITTEE
Senator Hannah-Beth Jackson, Chair
2015-2016 Regular Session
SB 1017 (Hill)
Version: February 11, 2016
Hearing Date: April 19, 2016
Fiscal: Yes
Urgency: No
NR
SUBJECT
Public Utilities Commission: public availability of utility
supplied documents
DESCRIPTION
This bill would authorize the Public Utilities Commission to
adopt rules providing for the disclosure of information
furnished to the Commission by a public utility, a subsidiary,
an affiliate, or a corporation holding a controlling interest in
a public utility.
BACKGROUND
Unlike other state agencies, whose records are generally open
for public inspection, the California Public Utilities
Commission (CPUC) operates under a statute creates a presumption
against public inspection. Specifically, that statute affords
the public access to its records only when specifically
permitted by the CPUC. (Pub. Util. Code Sec. 583.) Despite the
"open government" reforms in California, such as the California
Public Records Act (CPRA) (enacted in 1968), the statutory
standard for public access to utility filings with the CPUC has
not fundamentally changed since it was enacted in 1915.
The CPRA gives every person the right to inspect and obtain
copies of all state and local government documents not exempt
from disclosure. (Gov. Code Sec. 6253.) Exemptions include
corporate financial records and corporate proprietary
information, including trade secrets. (Gov. Code Secs. 6254,
6254(k), 6254.15.) The CPRA also specifically provides that
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information held by the CPUC which is deemed confidential under
Public Utilities Code Section 583 is not required to be
disclosed. (Gov. Code Secs. 6276, 6276.36.) In November 2004,
the voters passed Proposition 59, which provides the public with
a constitutional right of access to records and public meetings
of government officials and agencies. Proposition 59 did not,
however, nullify or repeal any confidentiality law existing at
that time that created an exception to the right of access to
public records. Accordingly, confidentiality statutes
applicable to the CPUC were not affected by the passage of
Proposition 59 and remained intact.
In September of 2010, eight people were killed when a natural
gas pipeline exploded in the San Francisco suburb of San Bruno,
which focused the public's attention on the CPUC and its
oversight of the utility companies.
Shock waves from the San Bruno disaster shook the foundations
of PG&E and the California Public Utilities Commission, the
state agency charged with regulating the company. The blast
exposed the utility's haphazard system of record keeping for
its tens of thousands of miles of gas pipelines and its
sometimes shoddy construction and inspection practices. The
catastrophe prompted questions about whether the company was
actually carrying out pipeline safety improvements that
ratepayers had been charged for." (Bowe and Pickoff-White,
Five Years After Deadly San Bruno Explosion: Are We Safer;The
California Report, (2015) [as of April 8, 2016].)
As part of the settlement agreement between the CPUC and the
City of San Bruno, the CPUC agreed to undergo rulemaking to
improve public access to public records by December of 2014,
which, at the time of this writing, is still in process. This
bill, seeking to increase transparency and the public's ability
to inspect documents, would expressly authorize the CPUC to
release public utility records by rule, thereby reducing the
time and CPUC effort required to comply with the CPRA.
CHANGES TO EXISTING LAW
Existing law , the California Constitution, declares the people's
right to transparency in government. Specifically, the
California Constitution provides that "the people have the right
of access to information concerning the conduct of the people's
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business, and therefore, the meetings of public bodies and the
writings of public officials and agencies shall be open to
public scrutiny...." (Cal. Const., art. I, Sec. 3.)
Existing law , the California Public Records Act (CPRA), governs
the disclosure of information collected and maintained by public
agencies. (Gov. Code Sec. 6250 et seq.) Generally, all public
records are accessible to the public upon request, unless the
record requested is exempt from public disclosure. There are 30
general categories of documents or information that are exempt
from disclosure, essentially due to the character of the
information, and unless it is shown that the public's interest
in disclosure outweighs the public's interest in non-disclosure
of the information, the exempt information may be withheld by
the public agency with custody of the information. (Gov. Code
Sec. 6254.)
Existing law defines state agency, for purposes of the CPRA, to
include every state officer, department, division, bureau,
board, and commission or other state body or agency, except for
the Legislature and the Judiciary. (Gov. Code Sec. 6252.)
Existing law , the CPRA, requires the California Public Utilities
Commission (CPUC) to establish written guidelines for
accessibility of records; the guidelines and regulations adopted
shall be consistent with other sections of the CPRA and reflect
the intention of the Legislature to make the records accessible
to the public. (Gov. Code Sec. 6253.4.)
Existing law requires the CPUC to investigate the cause of all
accidents occurring in California on the property of any public
utility accident resulting in the loss of life or injury to
person or property; the CPUC is authorized to make any order or
recommendation regarding the accident investigation. (Pub.
Util. Code Sec. 315.)
Existing law requires every public utility to file with the
CPUC, under such rules as the CPUC prescribes, a report of each
public utility accident. (Pub. Util. Code Sec. 315.)
Existing law provides that no information furnished to the CPUC
by a public utility, business that is a subsidiary or affiliate
of a public utility, or corporation that holds a controlling
interest in a public utility shall be publicly available except
on order of the commission, or by the CPUC, as specified, in the
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course of a proceeding or hearing. (Pub. Util. Code Sec. 583.)
Existing law provides that any present or former employee of the
CPUC who divulges any confidential public utility information
provided to the CPUC is guilty of a misdemeanor. (Pub. Util.
Code Sec. 583.)
This bill would additionally allow the CPUC to make information
publicly available by rule of the CPUC.
COMMENT
1.Stated need for the bill
According to the author:
Public Utilities Sec. 583 prevents CPUC staff from releasing
utility-furnished documents except by vote of the commission,
or by a commissioner during the course of a hearing. This
provision has been almost unchanged since the original Public
Utilities Act went into effect in 1912-more than 50 years
before the CPRA went into effect in 1968. The strict
prohibition against release of utility-furnished documents
without a vote of the commission-under pain of misdemeanor-is
inconsistent with the CPRA's (and California Constitution's)
presumption that documents used by public officials to make
decisions be available to the public. Much information
furnished by 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 commission 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 Commission vote.
2.Significance of "order" versus "rule"
Existing law permits the CPUC to release utility-provided
documents pursuant to a CPRA request only by order, which
requires a vote by the Commission. This bill would instead
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allow the CPUC to release, both by order and documents that the
utilities have provided to the CPUC by rule, in addition to by
order. The main distinction between an "order" and a "rule" is
the process. Under existing law, when an individual requests a
record marked "confidential" by a utility, the CPUC must
initially deny the request and then inform the requestor that
staff considers the request as an appeal which will be voted on
by the full Commission. Of this process, the author writes:
In addition to the burden placed on CPUC staff, the requestor
is guaranteed not to get the public record for at least 30
days after the draft resolution has been prepared, as the
Commission cannot vote on proposed decisions or draft
resolutions until they have been circulated for 30 days (see
Public Utilities Code Sec. 311(g)). [The] unthinking
over-marking of confidentiality on the part of a utility can
make documents that it could release almost immediately take
more than a month to release to the requestor-which is
inconsistent with the CPRA's requirement that records be made
"promptly available"-and considerable CPUC staff time.
However, if the CPUC were to make a "rule" allowing the release
of these documents, (instead of holding a vote), the rule could
provide a process and guidelines for staff to follow in
releasing documents.
The California Communications Association writes that they are
concerned that "by adding 'or rule' to this process, SB 1017
would allow the CPUC to skirt the current requirements, which
provide notice and due process for utilities, and delegate
decisions related to the public release of utility information
to staff utilizing broad and imperfect guidelines."
In response, the author writes that he "recognizes this concern
but notes that the only entities currently seeking
communications provider records are other communications
providers. There is no reason that these providers cannot
effectively guide the CPUC in crafting rules responsive to their
needs-rules which may include a requirement that communications
records requests still would need a vote of the full Commission.
As the communications industry is rapidly evolving-those
participating in it will say so themselves-this is an issue that
shouldn't be carved in statute, but should be handled by the
CPUC. Additionally, as the concern is primarily one of different
parts of this competitive industry attempting to gain advantage
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over the other and very much separate from the PRA requests that
the CPUC receives, the industry should be able to craft its own
suggested standards for CPUC adoption and not handcuff the CPUC
in the commission of its responsibilities under the Public
Records Act."
3.Increasing transparency with regard to public utilities
Last year the Governor vetoed three bills relating to the CPUC
and transparency (SB 18 (Hill), SB 48 (Hill) and AB 825
(Rendon)) and, in his veto message, indicated a more appropriate
path for the Legislature to take with regard to increasing
transparency:
These bills include various provisions to increase
transparency and accessibility to the Public Utilities
Commission. I support the intent of these bills and many of
their proposed reforms, however some additional work is needed
to ensure that they achieve their intended purposes and can be
effectively implemented.
Allowing Bagley-Keene and Public Records Act lawsuits to be
brought against the Commission by any interested party in
Superior Court, rather than exclusively in the Courts of
Appeal and the California Supreme Court, will only result in
increased litigation and likely delay Commission
decision-making. It will not improve public access to critical
information about the actions of regulated entities. 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.
In direct response, this bill would amend Section 583 of the
Public Utilities Code to allow information to be more
expediently available as intended by the CPRA. In opposition, a
coalition of communications companies argue that the current
system, whereby information designated as "confidential" is
treated as confidential until a dispute arises, has worked
perfectly for decades, and that allowing the CPUC to issue
regulations for the public availability of documents will "chill
the industry's willingness to share information with the [C]PUC
going forward."
However, the communications companies are currently
participating in the CPUC proceeding addressing these very
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issues. The coalition writes, "the initial rule proposed by the
Commission in that proceeding permitted its staff to make
determinations of confidentiality without notice to the
utilities or an opportunity to be heard. The communications
companies strongly opposed that initial proposal, citing Pub.
Util. Code Sec. 583. The initial proposed rule has undergone
substantial change since then. The parties to the proceeding are
currently engaged in Commission workshops, with the goal of
creating a process for evaluating the confidentiality of
information submitted by communications companies."
Staff notes that, like the process of issuing an order which the
opposition claims provides notice and due process for the
utilities, the process of "rulemaking" also provides notice, a
hearing, and an opportunity for any party to present arguments
in front of the Commission. (See Pub. Util. Code Sec. 1701.4.)
The main difference between the two processes, that in the case
of issuing a rule, this notice and opportunity to testify
happens only once, and not for every single CPRA request. To
this point, the author notes, "it is in the CPUC's best interest
during the rulemaking process to develop rules that do not allow
the release of market sensitive, critical infrastructure, or
other legitimately confidential information-rules that allow the
CPUC to withhold records in the cases where the public interest
served by non-disclosure outweighs the public interest served by
disclosure. In [my] (painfully long) experience with the CPUC,
the agency has never indicated a disposition to do otherwise."
Support : None Known
Opposition : AT&T; California Communications Association; CTIA;
Consolidated Communications, Inc.; Frontier Communications;
Southern California Edison (late); Sprint; T-Mobile; TechNet;
Verizon
HISTORY
Source : Author
Related Pending Legislation : None Known
Prior Legislation :
AB 825 (Rendon and Stone, 2015) proposed a suite of reforms of
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the CPUC, largely directed at increased transparency of the
activities of the agency, including requiring the California
State Auditor's Office to appoint an Inspector General within
its office for the CPUC, expanding the roles and
responsibilities of the CPUC public advisor, specifying
additional requirements of commissioners, and increased
transparency of electric utilities' procurement, among others.
This bill was vetoed by the Governor.
AB 1541 (Dickinson, 2012), among other things, would have
required CPUC accident investigation orders or recommendations
and all information furnished to the CPUC, unless exempt as
specified, to be subject to public disclosure under the CPRA.
This bill was held on the Senate Suspense File.
SB 1000 (Yee, 2012) would have eliminated the presumption of
confidentiality for utility-furnished CPUC documents and allowed
CPUC staff to release utility-furnished records pursuant to the
CPRA and without a Commission vote. This bill died in the
Assembly Utilities & Commerce Committee.
SB 1488 (Bowen, Ch. 690, Stats. 2004) See Background.
Prior Vote : Senate Energy, Utilities and Communications
Committee (Ayes 6, Noes 0)
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