BILL ANALYSIS                                                                                                                                                                                                    Ó




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          |SENATE RULES COMMITTEE            |                       SB 1222|
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                                UNFINISHED BUSINESS 


          Bill No:  SB 1222
          Author:   Hertzberg (D) 
          Amended:  8/30/16  
          Vote:     21 

           SENATE ENERGY, U. & C. COMMITTEE:  11-0, 4/19/16
           AYES:  Hueso, Morrell, Cannella, Gaines, Hertzberg, Hill, Lara,  
            Leyva, McGuire, Pavley, Wolk

           SENATE APPROPRIATIONS COMMITTEE:  7-0, 5/27/16
           AYES:  Lara, Bates, Beall, Hill, McGuire, Mendoza, Nielsen

           SENATE FLOOR:  39-0, 6/2/16
           AYES:  Allen, Anderson, Bates, Beall, Berryhill, Block,  
            Cannella, De León, Fuller, Gaines, Galgiani, Glazer, Hall,  
            Hancock, Hernandez, Hertzberg, Hill, Hueso, Huff, Jackson,  
            Lara, Leno, Leyva, Liu, McGuire, Mendoza, Mitchell, Monning,  
            Moorlach, Morrell, Nguyen, Nielsen, Pan, Pavley, Roth, Stone,  
            Vidak, Wieckowski, Wolk
           NO VOTE RECORDED:  Runner

           ASSEMBLY FLOOR:  Not available

           SUBJECT:   Public Utilities Commission:  reports:  financing  
                     orders


          SOURCE:    California Public Utilities Commission
          
          DIGEST:  This bill makes various changes to the authorities of  
          the California Public Utilities Commission (CPUC) and the  
          reports required to be provided to the Legislature.


          Assembly Amendments extend the CPUC's authority to issue  








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          financing orders from December 31, 2016, to June 30, 2022 and  
          eliminate and move CPUC reports. 


          ANALYSIS: 


          Existing law:


           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, §1 et seq.)  Requires the California Energy  
             Commission (CEC) to submit to the CPUC and to publicly owned  
             electric utilities (POUs), 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 POUs to consider such recommendations within six  
             months after the date it receives them.  (Public Resources  
             Code §25403)


           2) Establishes an "Electric Program Investment Charge" to  
             collect funds for renewable energy programs and research,  
             development, and demonstration programs.  (Public Resources  
             Code §25710)


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


           4) Requires the California Independent Systems Operator  
             (CAISO), in consultation with the CEC, CPUC, Western  
             Electricity Coordinating Council (WECC), and concerned  








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


           6) Requires the CPUC, in consultation with the California Air  
             Resources Board (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 §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 §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) Establishes a Consumption Surcharge Fund to receive funds  
             for public interest research and development, as specified.   
             (Public Utilities Code §895)


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








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


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


           13)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  
             §913.5) 


           14)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  
             §913.6) 


           15)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 §§913.7 and 913.8) 


           16)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 California Alternative Energy and Advanced  
             Transportation Financing Authority in its annual report  








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             required in Section 913.  (Public Utilities Code §913.9) 


           17)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 §913.11) 


          This bill:


           1) Changes dates by which the CPUC must submit specified  
             reports.


           2) Changes and adds to the required contents of specified CPUC  
             reports. 


           3) Repeals requirements for the CPUC to submit specified  
             reports.


           4) Extends CPUC's authority to issue financing orders from  
             December 31, 2016, to June 30, 2022.


           5) Limits CPUC's authority to serve warrants and make arrests  
             to investigators.


           6) Adds a January 1, 2023 sunset date to a specified reporting  
             statute. This statute mandates electrical or gas corporations  
             using ratepayer money to fund research and development  
             projects report the findings of those projects to the  
             Legislature.  


          Background








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           1) Purpose.  According to the author, this bill clarifies CPUC  
             reporting obligations.  According to the CPUC, there are  
             several dozen reports required by the Legislature.  Many of  
             these report requirements have been scattered throughout the  
             Public Utilities Code.  Several are now outdated, with  
             deadlines that have long passed.


             CPUC sponsored legislation last year, SB 697 (Hertzberg,  
             Chapter 612, Statutes of 2015), shifted many reporting  
             requirements to one location within the code in an effort to  
             better organize the Public Utilities Code.  This bill builds  
             off efforts from last year.


             This bill also extends the sunset date on the CPUC's  
             authority to refinance the costs of 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 are  
             near zero percent.  According to the CPUC, having refinancing  
             authority saves ratepayers money.  This bill extends that  
             authority to June 30, 2022.


           2) Report on Research and Development Projects.  This bill was  
             amended to require the CPUC to require each participating  
             electrical corporation to jointly prepare and submit report  
             on research and development projects, as specified.  The  
             report is to specifically provide information on the outcome  
             of whether a project "resulted in any technological  
             advancements or breakthroughs in promoting cyber security and  
             grid integration."  Following acceptance of a sufficient  
             report by the CPUC, the report is to be submitted to the  
             Legislature.  This report appears to be the report specified  
             in Public Utilities Code Section 740.5 (e)(2) that is  
             required for research activities specified in Public  
             Utilities Code Section 740.5 (a).  A sunset date of January  
             1, 2023, is also included, similar to the sunset specified in  








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             Public Utilities Code Section 740.5(e)(3).   


             As written, the new section proposed in this bill appears as  
             a stand-alone report. The striking of the reporting language  
             in the existing code further delinks the relationship between  
             this reporting requirement and the research and development  
             activities specified in the current code.  Without the  
             reference to the research and development specified in Public  
             Utilities Code Section 740.5, this bill could be referring to  
             the cybersecurity and renewable integration research and  
             development activities funded pursuant to Public Resources  
             Code Section 25710, Public Utilities Code Section 895,  
             shareholder-funded funded research and development activities  
             related to cybersecurity and renewable integration, or all of  
             the above.


          Related/Prior Legislation


          SB 697 (Hertzberg, Chapter 612, Statutes of 2015) repealed the  
          requirement of the CPUC to issue a decal to charter-party  
          carriers of passengers, extended the sunset date by on year on  
          the CPUC's authority to issue financing orders, allowed for the  
          electronic filing of legislative reports, and made additional  
          codifying and technical changes to the Public Utilities Code  
          related to reports.


          FISCAL EFFECT:   Appropriation:    No          Fiscal  
          Com.:YesLocal:   No

          According to the Assembly Appropriations Committee: 


           Increases CEC costs of approximately $136,000 (one personnel  
            year) to compile information, conduct analysis, and prepare  
            formal comments regarding energy efficient programs (Energy  
            Resources Program Account or other special fund.)










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           No additional CPUC costs, potential minor savings.




          SUPPORT:   (Verified8/31/16)


          California Public Utilities Commission (source)


          OPPOSITION:   (Verified8/31/16)


          None received

          ARGUMENTS IN SUPPORT:  The CPUC issues dozens reports each year  
          covering safety, rail, transportation, energy, water, and  
          telecommunications issues, as well as general operations of the  
          agency.  Current California law makes it difficult to identify  
          reporting requirements currently scattered across the Public  
          Utilities Code, thus making it harder for the CPUC to comply  
          with all of its reporting obligations.  Additionally, some  
          reports on customer data are due at a time when no such data is  
          available.
           


          Prepared by:Nidia Bautista / E., U., & C. / (916) 651-4107
          8/31/16 20:49:20


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