BILL ANALYSIS Ó SB 1017 Page 1 Date of Hearing: June 29, 2016 ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE Mike Gatto, Chair SB 1017 (Hill) - As Introduced June 20, 2016 SENATE VOTE: 21-8 SUBJECT: Public Utilities Commission: public availability of utility supplied documents SUMMARY: Modifies statutes that limit public access to utility supplied documents at the California Public Utilities Commission (CPUC). Specifically, this bill: 1)Authorizes the CPUC 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. 2)Requires the CPUC to develop rules consistent with the California Public Records Act for the expeditious disclosure, of information related to: a) Public health and safety emergencies; SB 1017 Page 2 b) Public, employee, and contractor safety; and c) Environmental degradation caused by loss of operational control by a public utility. 3)Repeals a provision that makes divulging this information a misdemeanor. 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. (California Constitution, Article I Section 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 Section 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 Section 582) 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 SB 1017 Page 3 present or former officer or employee of the CPUC who divulges information is guilty of a misdemeanor. (Public Utilities Code Section 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 Section 584) 6)Requires the public utilities to provide access to all computer models used by the public utility, in any rate proceeding or a proceeding that may influence a rate, to the CPUC. (Public Utilities Code Section 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 Section 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 Section 6255) FISCAL EFFECT: Unknown. COMMENTS: 1)Author's Statement: "An antiquated law put in place before the SB 1017 Page 4 Public Records Act (PRA) makes it very difficult for the public to get public records from the CPUC. Public Utilities Code [Section] 583 requires the full Commission vote to release documents that have been designated by a utility as 'confidential.' "While there is no penalty for a utility to designate clearly public information as 'confidential,' CPUC staff is subject to a misdemeanor for release of this information-regardless of whether the utility's claim of confidentiality has any validity. "The CPUC has reported that utilities have claimed confidentiality on records that are clearly not confidential, including: Information filed publicly with other agencies Entire responses to data requests, even when most of the information is not confidential A customer service manual that is distributed to customers Newspaper advertisements Scripts read to customers by customer service representatives The number of customer complaints logged against a company SB 1017 Page 5 Hearing exhibits that are contained in public testimony Redaction of entire tables when only a few numbers are confidential "Utilities have used this as a shield to prevent the public from access to safety information. In one case in 2005, Southern California Gas Company was able to drag out a PRA request from KNBC (Los Angeles) for information about gas pipeline accidents, claiming that the station had not identified any 'legitimate reason' for receiving 'safety-related' reports, and that it should not be allowed to 'create undue public alarm' to 'boost its own ratings and revenues.' More recently, the non-utility underground gas storage providers wrote to the CPUC stating that it believed that methane leak reports should be confidential because 'a report showing a leak of any size may attract a curious public.'" Governor Brown has identified this as a needed area of CPUC reform. 1)Principles of CPUC Reform: On Monday, June 27, 2016, Governor Brown and Assemblymember Gatto, Chair of the Assembly Utilities and Commerce Committee announced an agreement on Principles for Reforms of the CPUC. This bill including: a) Clarifying 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. b) Striking the criminal misdemeanor provision for release SB 1017 Page 6 of documents submitted by a public utility without a vote of the Commission or released by a commissioner in the process of a hearing. c) Requiring the CPUC to develop procedures for expedited disclosure of public information related to: a) public health and safety emergencies; b) public, employee, or contractor safety; or c) environmental degradation caused by the loss of operational control by a public utility. SB 512 (Hill), SB 661 (Hill) and SB 215 (Leno) of 2016 include other elements of the principles. 2)Background: In vetoing all of the CPUC reform bills passed by the Legislature in the fall of 2015, the Governor included his desire to reform Public Utilities Code Section 583 in veto messages for SB 18 (Hill), SB 48 (Hill) and AB 825 (Rendon). 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 California Public Records Act (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 Public Utilities Code 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. This bill strikes the misdemeanor penalty applicable to commissioners and staff who release confidential information. The author may wish to consider retaining the misdemeanor SB 1017 Page 7 penalty and limit its applicability to release of information for economic gain, create a competitive disadvantage against a utility, or to create a competitive advantage and specify that information provided to the State Auditor as a result of a whistleblower complaint or to another state agency with a memorandum of understanding that protects confidential information is not subject to the misdemeanor provisions. This bill would also allow the CPUC to establish confidentiality procedures by rule in addition to by order. The author may wish to clarify that documents that are to be held confidential pursuant to federal or state law may not be made publicly available. Concerns have been raised on an earlier version of this bill about due process, in the event of a disagreement between a provider of confidential information and whether this information should or should not be held confidential. In the event of a request for release of confidential information this bill does not specify whether the provider of the confidential information has the ability to challenge the release of such information before the CPUC. 1)Proposed Amendments:The author may wish to consider an amendment to: a) specify that documents whose release is prohibited by federal or state law shall not be made publicly available; b) retain the current language subjecting commissioners and staff to misdemeanor penalties for divulging confidential information and to limit that provision to those circumstances where a commissioner or staff divulges information for monetary gain or employment or to place a public utility at a competitive disadvantage to another; and c) to state that information provided to the Bureau of State Audits if relevant to a whistleblower complaint or shared with another state agency pursuant to a confidentiality agreement. SB 1017 Page 8 SECTION 1. The Legislature finds and declares that, pursuant to Section 3 of Article I of the California Constitution, the public should have access to all public records of state entities and this right should extend to public records of the Public Utilities Commission. SEC. 2. Section 583 of the Public Utilities Code is amended to read: 583. No information furnished to the commission by a public utility, or any business which is a subsidiary or affiliate of a public utility, or a corporation which holds a controlling interest in a public utility, except those matters specifically required to be open to public inspection by this part, shall be open to public inspection or made public except on order or rule of the commission, or by the commission or a commissioner in the course of a hearing or proceeding but no document whose release is prohibited by federal or state law shall be made open to the public or released publicly. Any present or former officer or employee of the commission who divulges any such information for monetary gain, employment, or to place a public utility, who furnished the information at a competitive disadvantage, or to provide a competitive advantage to another, is guilty of a misdemeanor. The penalty provisions of this section shall not apply when such information is divulged to the Bureau of State Audits as information relevant to a whistleblower complaint or shared with a state agency under a memorandum of understanding that protects the confidentiality of the information. SEC. 3. Section 583.1 is added to the Public Utilities Code, to read: 583.1. SB 1017 Page 9 (a) The commission shall develop rules consistent with the California Public Records Act (Article 1 (commencing with Section 6250) of Chapter 3.5 of Division 7 of Title 1 of the Government Code) for the expeditious disclosure of information related to all of the following: (1) Public health and safety emergencies. (2) Public, employee, and contractor safety. (3) Environmental degradation caused by loss of operational control by a public utility. (b) Nothing in this part requires the commission to disclose documents when the public interest served by not disclosing the records clearly outweighs the public interest served by disclosure of the records. (c) Nothing in this part requires the commission to disclose documents regarding utility employees, contract employees, or individuals who generally have an objectively reasonable expectation of privacy in which disclosure would constitute an unwarranted invasion of personal privacy. 2)Support and Opposition: Supporters state that this bill addresses a continuing challenge of transparency of utility practices and that current limits imposed by this section of the Public Utilities Code dramatically slows the release of public information. In addition, supporters believe that the CPUC commissioners need not vote on every request to release information. SB 1017 Page 10 Opponents express concern that, as written, this bill could lead to release of highly sensitive and confidential information. They state that if passed it would hamper the free flow of information that currently exists between communication companies and the CPUC. Others suggest that the language removes due process rights that would provide an opportunity to be heard before the deprivation of a public interest and lacks a process to raise disagreements with staff interpretations of confidential documents before is released. 3)Prior Legislation: AB 825 (Rendon) of 2015: 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. Vetoed by the Governor. AB 1541 (Dickinson) of 2012: Added, among many of the provisions of the bill, 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. Held in the Senate Appropriations Committee. SB 1000 (Yee) of 2012: 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. Died in the Assembly Utilities and Commerce Committee. SB 1488 (Bowen), Chapters 690, Statutes of 2004: Requires the SB 1017 Page 11 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. REGISTERED SUPPORT / OPPOSITION: Support Alliance for Nuclear Responsibility California Attorneys, Administrative Law Judges and Hearing Officers in State Employment (CASE) Engineers and Scientists of California Utility Workers Union of America Office of Ratepayer Advocates State Employees International Union SB 1017 Page 12 Sierra Club The Utility Reform Network (TURN) Opposition AT&T CalCom California Association of Competitive Telecommunications Companies CTIA California Cable and Telecommunications Association Consolidated Communications Frontier Southern California Edison Sprint SB 1017 Page 13 T-Mobile TechNet Verizon Analysis Prepared by:Sue Kateley / U. & C. / (916) 319-2083