BILL ANALYSIS Ó SB 1049 Page 1 Date of Hearing: June 29, 2016 ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE Mike Gatto, Chair SB 1049 (Hill) - As Amended June 15, 2016 SENATE VOTE: 39-0 SUBJECT: Public Utilities Commission: close call reporting program SUMMARY: Requires the California Public Utilities Commission (CPUC) to establish procedures and processes to implement a "close call reporting program" for purposes of facilitating the identification of accident precursors by persons familiar with public utility operations and of collecting, analyzing, and disseminating unbiased safety information. Specifically, this bill: 1)Requires the CPUC to establish procedures and processes to implement a confidential, nonpunitive, and independent close call reporting program for purposes of facilitating the identification of accident precursors by persons familiar with public utility operations, including, but not limited to, public utility employees and contractors, and of collecting, analyzing, and disseminating unbiased safety information. 2)Allows any person, including, but not limited to, a public SB 1049 Page 2 utility employee, or contractor, or a member of the public, to voluntarily submit a confidential close call report, that both involves a public utility and relates to public, employee, or contractor safety. 3)Prohibits the CPUC from using through this program, or information derived therefrom, except for information concerning an accident or criminal offense, in an enforcement action and allow the CPUC to establish additional exceptions to this subdivision. 4)Allows the CPUC to contract with a third party to administer the program. 5)Specifies that a public utility employee or the employee of a contractor performing work for a public utility shall not be subject to demotion, discharge, or any other form of retaliation or discrimination for participating in the close call reporting program established pursuant to this section. EXISTING LAW: 1)CPUC has regulatory authority over public utilities and authorizes the CPUC to fix rates, establish rules, examine records, issue subpoenas, administer oaths, take testimony, punish for contempt, and prescribe a uniform system of accounts for all public utilities subject to its jurisdiction. (California Constitution, Article XII, Sections 3 and 6) 2)Authorizes the CPUC to, at any time, inspect the accounts, books, papers, or records kept by the public utility. (Public Utilities Code Section 314) SB 1049 Page 3 3)Requires the CPUC to investigate the cause of all accidents occurring within this state upon the property of any public utilities or directly or indirectly arising from or connected with its maintenance or operation, resulting in loss of life or injury to person or property and requiring, in the judgement of the CPUC, investigation by it, and may make such order or recommendation with respect thereto as in its judgement seems just and reasonable. (Public Utilities Code Section 315) 4)Establishes that neither the order or recommendation of the CPUC nor any accident report filed with the CPUC shall be admitted as evidence in any action for damages based on or arising out of such loss of life, or injury to person or property. (Public Utilities Code Section 315) 5)Requires every public utility to file with the CPUC, under such rules as the CPUC prescribes, a report of each accident so occurring of such kinds or classes as the CPUC from time to time designates. (Public Utilities Code Section 315) 6)Requires every electrical corporation to cooperate fully with the CPUC in an investigation into any major accident or any reportable incident concerning overhead electric supply facilities. (Public Utilities Code Section 316) 7)Requires every electrical corporation to provide the CPUC, upon its request, immediate access to specified documents, including any and all documents under the electrical corporation's control that are related to the incident and are not subject to attorney-client privilege or attorney work product doctrine. (Public Utilities Code Section 316) SB 1049 Page 4 8)Requires every public utility to furnish and maintain such adequate, efficient, just and reasonable service, instrumentalities, equipment, and facilities, as are necessary to promote the safety, health, comfort, and convenience of its patrons, employees, and the public. (Public Utilities Code Section 451) 9)Requires that every public utility shall deliver to the CPUC, when required by the CPUC, copies of any or all maps, profiles, contracts, agreements, franchises, reports, books, accounts, papers, and records in its possessions or in any way relating to its property or affecting its business, and also a complete inventory of all its property in such form as the CPUC may direct. (Public Utilities Code Section 582) 10)Establishes that the attorney-client privilege is waived when the holder of the privilege, without coercion, discloses a significant part of the privileged communication or consents to such disclosure. (Evidence Code Section 912(a)) 11)Establishes that a client has a privilege to refuse to disclose, and to prevent another from disclosing, a confidential communication between client and lawyer, if the privilege is claimed by: a) the holder of the privilege; b) a person who is authorized to claim the privilege by the holder of the privilege; or c) the person who as the lawyer at the time of the confidential communication, but such person may not claim the privilege if there is no holder of the privilege in existence or if he is otherwise instructed by a person authorized to permit disclosure. (Evidence Code Section 954) FISCAL EFFECT: Unknown. COMMENTS: SB 1049 Page 5 1)Author's Statement: "Recent utility disasters such as the Aliso Canyon gas leak, the Butte Fire, and the San Bruno explosion have demonstrated the need to better incorporate employee observations into utility safety initiatives. In order to empower utility employee reporting of near misses and foster a culture of communication between utility employees and management, the CPUC needs to implement a confidential close call reporting system, such as the successful program created by the Federal Aviation Administration forty years ago, that protects the confidentiality of reporting employees and disseminates safety lessons industry-wide." 2)Background: This bill requires the CPUC to implement a non-punitive close call reporting program that may be administered by a third party and that protects utility and contract employees from punishment by the CPUC or retaliation by their employers. According to the author, James Reason in Managing the Risks of Organizational Accidents (1997), confidentiality is a necessary element to encourage employees to report safety problems. Anonymity, however, impedes the ability for an investigator to ask important follow up questions. The solution used by the Federal Aviation Administration (FAA) and copied by the Federal Railroad Administration (FRA) and elsewhere is to use a third party to administer the reporting program. The reports to the third party would not be confidential, but after follow-up by third party analysts the reports would be de-identified before evaluation (in the FAA program) or forwarding to a peer review team of labor, management, and regulatory staff (FRA program). Both the FAA and FRA use the National Aeronautics and Space Administration (NASA) to administer their programs. SB 1049 Page 6 The CPUC works in close cooperation with the FRA on railway matters and receives grants from the FRA to perform rail inspections. The Rail Transit Safety Branch of the CPUC's Safety and Enforcement Division ("SED") is responsible for the CPUC's rail transit safety oversight program, which includes oversight of 15 fixed guideway public transportation systems in California. According to the CPUC, Federal law establishes a close relationship between states and the Federal Railroad Administration (FRA) and affirms the commitment both entities share toward ensuring rail safety. 3)Suggested amendment: The author may wish to consider limiting the applicability of this measure to electric and gas utilities and striking the provision that allows the CPUC to establishing additional exemptions to this subdivision because it provides the CPUC with the means to establish unlimited exceptions, which would undermine the purpose of the programs to encourage reporting of safety problems. SECTION 1. Section 326 is added to the Public Utilities Code, to read: 326. (a) The commission shall establish procedures and processes to implement a confidential, nonpunitive, and independent close call reporting program for purposes of facilitating the identification of accident precursors by persons familiar withpublic utilitygas and electric utility operations, including, but not limited to, public utility employees and contractors, and of collecting, analyzing, and disseminating unbiased safety information. Through the program, any person, including, but not limited to, a public utility employee or contractor or a member of the public, may voluntarily submit a confidential close call report that both involves a public utility and relates to public, employee, or contractor safety. (b) The commission shall not use a report pursuant to subdivision (a) or information derived therefrom, except for information concerning an accident or criminal offense, in an SB 1049 Page 7 enforcement action.The commission may establish additional exceptions to this subdivision.(c) The commission may contract with a third party to administer the program. (d) A public utility employee or the employee of a contractor performing work for a public utility shall not be subject to demotion, discharge, or any other form of retaliation or discrimination for participating in the close call reporting program established pursuant to this section. 4)Support and Opposition: The California Railroad Industry opposes unless amended, because this bill in its current form will be duplicative of the Federal Railroad Administration's Confidential Close Call Reporting System, and, therefore, unnecessary for railroad operations. The California Cable and Telecommunications Association (CCTA) and its members oppose this bill because of the vague language used in the proposed statute, what issue the statute is supposedly addressing, as well as the manner in which the CPUC could potentially use the information derived from this program. 5)Prior Legislation: AB 2584 (Bradford), Chapter 262, Statutes of 2012: Requires every electrical corporation to cooperate fully with CPUC investigations of overhead electric supply facilities regardless of pending litigation or other investigations. REGISTERED SUPPORT / OPPOSITION: SB 1049 Page 8 Support None on file. Opposition California Cable and Telecommunications Association California Railroad Industry Analysis Prepared by:Sue Kateley / U. & C. / (916) 319-2083