BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                    SB 1222


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          Date of Hearing:  June 29, 2016


                    ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE


                                  Mike Gatto, Chair


          SB  
          1222 (Hertzberg) - As Amended June 16, 2016


          SENATE VOTE:  39-0


          SUBJECT:  Public Utilities Commission:  reports:  financing  
          orders


          SUMMARY: Makes several changes to reports required of the  
          California Public Utilities Commission (CPUC) to be provided to  
          the Legislature, including: 1) changes the date by which the  
          CPUC must submit specified reports; 2) changes the contents of  
          and adds specified reports; 3) repeals provisions requiring the  
          CPUC to submit specified reports; 4) extends the sunset date of  
          the CPUC financing authority; 5) amends the Penal Code to  
          constrain CPUC authority to exercise the power of arrest and  
          serve warrants to enforce the Public Utilities Code; 6) updates  
          the list of current reporting requirements imposed on public  
          entities published by Legislative Counsel. Specifically, this  
          bill:   


          1)Changes dates by which the CPUC must submit specified reports,  
            including:
              a)    Moves from January 10 to February 1 the annual report  
                to the Legislature regarding all sources, funding amounts  
                and expenditures related to specified CPUC-initiated  








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                nonprofits in Public Utilities Code Section 910.4.


              b)    Moves from January 1 to February 1 of each year the  
                CPUC report to the Governor and Legislature on the CPUC's  
                recommendations for a smart grid and related specified  
                information noted in Public Utilities Code Section 913.2.


              c)    Makes the quarterly report required in Public  
                Utilities Code Section 913.5 an annual report on the  
                progress each electrical corporation is making to meet the  
                Renewable Portfolio Standard (RPS). 


              d)    Moves the date from January 1 to February 1 for the  
                biennial report to the Legislature required in Public  
                Utilities Code Section 913.10 and repeals the mention of  
                the net-energy meeting pilot program.


           2) Changes and additions to the contents of specified reports,  
             including:


              a)    Combining requirements from Sections 913.3, 913.4, and  
                913.6, in order to streamline and eliminate duplicative  
                reports. 


              b)    Adds Public Resources Code Section 25229 and requires  
                the CEC, rather than the CPUC, to annually report on  
                recommendations to the CPUC regarding ratepayer-funded  
                energy efficiency programs that are similar to those  
                administered by the CPUC, California Energy Commission  
                (CEC), the California Air Resources Board (ARB),  
                California Advanced Energy and Transportation Fund  
                Authority (CAETFA), the California Infrastructure and  
                Economic Development Bank, the Department of Community  








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                Services and Development Agency.


              c)    Adds Public Utilities Code Section 380.3 and requires  
                the CPUC to review CEC recommendations related to Public  
                Resources Code Section 25229, added by this bill.


              d)    Removes certain reporting requirements as specified in  
                Public Utilities Code Section 454.55 and  Public Utilities  
                Code Section 454.56 and consolidates these requirements in  
                Public Utilities Code Section 913.10.


              e)    Adds Public Utilities Code Section 913.8 requiring the  
                CPUC to report to the Legislature information related to  
                various energy efficiency programs including those  
                designed to benefit disadvantaged households as specified.  
                Public Utilities Code Section 2870 is amended to reference  
                these requirements. 


              f)    Adds Public Utilities Code Section 913.12 requiring  
                the CPUC to report to the Legislature information related  
                to the California Solar Initiative as specified. 


              g)    Amends Public Utilities Code Section 918.1 allowing  
                the CPUC to hire an independent entity to assess the  
                Transportation Enforcement Branch, as specified, and  
                report to the Legislature regarding the assessment no  
                later than February 1, 2017, and July 1, 2017, certain  
                information. 


              h)    Amends Public Utilities Code Section 1046 to remove  
                reference to a report within the definition of limousine. 










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              i)    In several areas, replaces references to the former  
                Consumer Services Division of the CPUC which used to house  
                investigators, who are now housed in other divisions, and  
                replaces with more appropriate personnel references,  
                including "railroad investigators" or "persons employed as  
                investigators by the CPUC."


           3) Repeals provisions requiring the CPUC to submit specified  
             reports, including:


              a)    Public Resources Code Section 25403 requires the CEC  
                to submit the CPUC and to publicly owned electric  
                utilities, recommendations designed to reduce wasteful,  
                unnecessary, or uneconomic energy consumption resulting  
                from rate structures, cost of service allocations, the  
                disallowance of business expense and others.  Requires the  
                CPUC and publicly owned electric utilities to consider  
                such recommendations within six months after the date it  
                receive them.


              b)    Public Utilities Code Section 318 requires the CPUC to  
                conduct a zero-based budget by January 2015 for the entire  
                agency. 


              c)    Public Utilities Code Section 350 required CAISO, in  
                consultation with the CEC, CPUC, WECC, and concerned  
                agencies in the western states to provide a report to the  
                Legislature and the Oversight Board within six months of  
                FERC that includes specified information.


              d)    Public Utilities Code Section 353.13 (b) that requires  
                the CPUC to prepare and submit a report to the  
                Legislature, on or before, June 1, 2002, describing its  
                proposed methodology for determining the new electric  








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                rates required by January 1, 2003.


              e)    Public Utilities Code Section 353.15(c) requires the  
                CPUC, in consultation with the ARB or appropriate local  
                air quality management district, and CEC, to evaluate the  
                efficiency, emissions, and reliability of distributed  
                energy resources with a capacity greater than 10 kilowatts  
                and submit a report to the Legislature by 2003.
              f)    Public Utilities Code Section 365.1(e) giving  
                permissive authority of the CPUC to report to the  
                Legislature on the efficacy of authorizing individual  
                end-use residential customers to enter into direct  
                transactions, including appropriate consumer protection.    
                 


              g)    Public Utilities Code Section 454.1 required one-time  
                reports due in 2003.


              h)    Public Utilities Code Section 740.5(e) requires each  
                electrical corporation participating in the "21st Century  
                Energy System Decision" Decision 12-12-031 to submit a  
                report to the CPUC by December 1, 2013.


              i)    Public Utilities Code Section 747.5 requires the CPUC  
                to review its policies concerning pricing of utility  
                service and assess whether the pricing promotes energy  
                efficiency by customers and report to the Legislature as  
                soon as practicable. 


              j)    Public Utilities Code Section 910.5 requires the CPUC  
                to report to the Legislature regarding specified  
                activities of the California Public Utilities Foundation. 










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              aa)   Public Utilities Code Section 913.3 requires specified  
                information related to implementing the RPS, including  
                information related to workforce training/recruitment.


              bb)   Public Utilities Code Section 913.6 requires a  
                biennial report from the CPUC, in consultation with the  
                CEC, to the Legislature on activities related to  
                procurement, siting, permitting, transmission and other  
                specified information, of the RPS. 


              cc)   Public Utilities Code Section 913.8 requires the CPUC  
                to include information in the triennial report required in  
                Section 913.7 related to how each electrical and gas  
                corporation is implementing residential energy efficiency  
                program in Public Resources Code §95943.


              dd)   Public Utilities Code Section 913.9 to annually report  
                to the Legislature on its efforts to identify ratepayer  
                funded energy efficiency programs that are similar to  
                those administered by the CEC, ARB, CAETFA in its annual  
                report required in Section 913. 


              ee)   Public Utilities Code Section 913.11 requires the CPUC  
                to provide a progress report to the Legislature of each  
                odd-numbered year concerning policies on rates, equipment,  
                and infrastructure implemented by the CPUC and other state  
                agencies, to facilitate the use of electricity to power  
                and natural gas to fuel low-emission vehicles.


              ff)   Public Utilities Code Section 913.13 requires the CPUC  
                to annually report to the Legislature on its  
                implementation of Public Utilities Code Section 785. 










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              gg)   Public Utilities Code Section 918.2. The contents of  
                this code section are consolidated into 918.1 to decrease  
                duplicative language in the code. 


              hh)   Public Utilities Code Section 956 required one-time  
                reports due in 2013. 


              ii)   Public Utilities Code Section 2714.5 required one-time  
                reports due in 2008.


              jj)   Public Utilities Code Section 2827.3 required one-time  
                reports due in 2013.


              aaa)  Public Utilities Code Section 2845 required one-time  
                reports due in 2011.


              bbb)  Public Utilities Code Section 2867.1 required one-time  
                reports due in 2010 and 2014.


              ccc)  Public Utilities Code Section 2872.5 required one-time  
                reports due in 2008.


              ddd)  Public Utilities Code Section 2892.1 required one-time  
                reports due in 2008.


              eee)  Public Utilities Code Section 3346 requires California  
                Consumer Power and Annual Conservation Financing Authority  
                to submit annual budget reports to fiscal committees of  
                the Legislature as specified. 










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              fff)  Public Utilities Code Section 3368 required certain  
                reports, as specified, that have since been submitted to  
                the appropriate authority. 


              ggg)  Public Utilities Code Section 5371.4 required one-time  
                reports due in 1992.


              hhh)  Public Utilities Code Section 5381.5 required one-time  
                reports due in 2014.


          4)Extends the authority of the CPUC to issue financing orders  
            from December, 2016 to June, 2022. 


          5)Amends the Penal Code to constrain CPUC authority to exercise  
            the power of arrest and serve warrants to enforce the Public  
            Utilities Code, as specified:


             a)   Amends Penal Code Section 830.11 to allow only  
               investigators and investigator supervisors this authority  
               pending CPUC approval and training, as specified. 


             b)   This change is mirrored in amendments to Public  
               Utilities Code Section 308.5. 


          6)Updates and revises the list Legislative Counsel prepares,  
            publishes, and maintains of all reports that state and local  
            agencies are required or requested by law to prepare and file  
            with the Governor and/or the Legislature to reflect changes in  
            reporting requirements made by this bill. 


          EXISTING LAW:   








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           1) Establishes the CPUC consisting of five members appointed by  
             the Governor and approved by the Senate and that the  
             Legislature has plenary power, unlimited by the other  
             provisions of the Constitution but consistent with this  
             article, to confer additional authority and jurisdiction upon  
             the CPUC, to establish the manner and scope of review of CPUC  
             action in a court of record.  (California Constitution,  
             Article XII, Section 1 et seq.)


           2) Requires the CEC to submit to the CPUC and to publicly owned  
             electric utilities, recommendations designed to reduce  
             wasteful, unnecessary, or uneconomic energy consumption  
             resulting from rate structures, cost of service allocations,  
             the disallowance of business expense and others.  Requires  
             the CPUC and publicly owned electric utilities to consider  
             such recommendations within six months after the date it  
             receive them.  (Public Resources Code Section 25403)


           3) Requires the CPUC to conduct a zero-based budget for all of  
             its programs by January 10, 2015.  (Public Utilities Code  
             Section 318)


           4) Requires the California Independent Systems Operator  
             (CAISO), in consultation with the CEC, CPUC, Western  
             Electricity Coordinating Council (WECC), and concerned  
             agencies in the western states to provide a report to the  
             Legislature and the Oversight Board within six months of the  
             Federal Energy Regulatory Commission (FERC) that includes  
             specified information.  (Public Utilities Code Section 350)


           5) Requires the CPUC to prepare and submit a report to the  
             Legislature, on or before, June 1, 2002, describing its  
             proposed methodology for determining the new electric rates  








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             required by January 1, 2003.  (Public Utilities Code Section  
             353.13(b))


           6) Requires the CPUC, in consultation with the ARB or  
             appropriate local air quality management district, and CEC,  
             to evaluate the efficiency, emissions, and reliability of  
             distributed energy resources with a capacity greater than 10  
             kilowatts and submit a report to the Legislature by 2003.   
             (Public Utilities Code Section 353.15 (c))


           7) Requires each electrical corporation participating in the  
             "21st Century Energy System Decision" Decision 12-12-031 to  
             submit a report to the CPUC by December 1, 2013.  (Public  
             Utilities Code Section 740.5)


           8) Requires the CPUC to review its policies concerning pricing  
             of utility service and assess whether the pricing promotes  
             energy efficiency by customers and report to the Legislature  
             as soon as practicable.  (Public Utilities Code 747.5)


           9) Requires the CPUC to report to the Legislature regarding  
             specified activities of the California Public Utilities  
             Foundation.  (Public Utilities Code Section 910.5)


           10)Requires the CPUC to annually review the e-complaints  
             program to ensure continued effectiveness.  (Public Utilities  
             Code Section 910.6)


           11)Requires specified reporting by the CPUC, by each May 1, to  
             the Legislature related to implementing the RPS including  
             information related to costs, revenues, workforce  
             training/recruitment and others.  (Public Utilities Code  
             Section 913.3)








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           12)Requires the CPUC to provide a quarterly report of the  
             progress of each electrical corporation in meeting the RPS  
             and other specified information.  (Public Utilities Code  
             Section 913.5)


           13)Requires the CPUC, in consultation with the CEC, to report  
             to the Legislature every January 1 of every even numbered  
             year on the progress and status of procurement, permitting  
             and siting, transmission facilities and other specified  
             information related to the RPS.  (Public Utilities Code  
             Section 913.6)


           14)Requires the CPUC to provide a report every three years to  
             the Legislature on the energy efficiency and conservation  
             programs it oversees, including authorized utility budgets.   
             The report shall include information regarding each  
             electrical corporation's and each gas corporation's  
             implementation of energy efficiency for residential  
             buildings.  (Public Utilities Code Sections 913.7 and 913.8)


           15)Requires the CPUC to annually report to the Legislature on  
             its efforts to identify ratepayer funded energy efficiency  
             programs that are similar to those administered by the CEC,  
             ARB, and CAETFA in its annual report required in Section 913.  
              (Public Utilities Code Section 913.9)
           16)Requires the CPUC to provide a progress report to the  
             Legislature of each odd-numbered year concerning policies on  
             rates, equipment, and infrastructure implemented by the CPUC  
             and other state agencies, to facilitate the use of  
             electricity to power and natural gas to fuel low-emission  
             vehicles.  (Public Utilities Code Section 913.11)


          FISCAL EFFECT:  Unknown.








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          COMMENTS:  


          1)Author's Statement: According to the author, "Senate Bill 1222  
            clarifies reporting obligations of the CPUC. This bill  
            modifies the date reports are due to reflect the timing when  
            report data is available, and to better conform with  
            implementation cycles. Additionally, this bill augments CPUC  
            efficiency for certain repetitive reports and reassigns to the  
            CA Energy Commission the duty of preparing an annual statewide  
            report on energy efficiency and the myriad statewide programs.  
            SB 1222 also extends the sunset date on the CPUC's authority  
            to refinance the costs from electric deregulation. In 1995,  
            the state issued 20-year bonds to cover certain costs  
            associated with that transition that are paid back by utility  
            ratepayers. In recent years, interest rates have declined  
            substantially and the short term finance rates stand near 0%.  
            The CPUC has used this authority to save ratepayers money."
          2)Background: There are several dozen reports required of the  
            CPUC by the Legislature ranging from an annual work plan  
            report, to triennial reports on energy efficiency programs, to  
            quarterly reports related to the states progress in meeting  
            the RPS.  Unfortunately, many of these report requirements  
            have been scattered throughout the Public Utilities Code and  
            several are now outdated, with deadlines that have long  
            passed.


            In an effort to better organize the Public Utilities Code and  
            to have all required reports of the CPUC to the Legislature  
            located in one area, last year, the CPUC sponsored  
            legislation, SB 697 (Hertzberg), Chapter 612, Statutes of  
            2015, to shift many of these requirements to one location  
            within the code, in the 910s area.  This bill builds off the  
            efforts from last year's bill.










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            This bill repeals many of the reports for which deadlines have  
            passed, in many instances by over 10 years.  However, this  
            bill also includes some recent additions, such as the 2013  
            Budget statute requiring the CPUC to conduct a zero-based  
            budget for all its programs by January 10, 2015.  Although  
            that exercise resulted in mixed results, there does not seem  
            to be much appetite from the Senate Budget Committee to  
            require another zero-based budget from the CPUC.  Other report  
            requirements are no longer applicable, such as the report  
            regarding expenditures of the California Public Utilities  
            Commission Foundation.


          


          REGISTERED SUPPORT / OPPOSITION:




          Support




          California Public Utilities Commission (Sponsor) 




          Opposition




          None on file. 










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          Analysis Prepared by:Darion Johnston / U. & C. / (916)  
          319-2083