BILL NUMBER: AB 901	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Davis

                        FEBRUARY 26, 2009

   An act to add Article 6 (commencing with Section 8290) to Chapter
7 of Division 4 of the Public Utilities Code, relating to public
utilities.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 901, as introduced, Davis. Public utilities: corporate
responsibilities.
   Under existing law, the Public Utilities Commission has regulatory
authority over public utilities, including electrical, gas, water,
and telephone corporations. Existing law authorizes the commission to
establish rules for all public utilities, subject to control by the
Legislature, authorizes the commission to fix the rates and charges
for every public utility, and requires that those rates and charges
be just and reasonable. Existing law directs the commission to
require every electrical, gas, telephone, and water corporation with
annual gross revenues exceeding $25,000,000, and their regulated
subsidiaries and affiliates, to implement a program developed by the
commission to encourage, recruit, and utilize minority-, women-, and
disabled veteran-owned business enterprises, as defined, in the
procurement of contracts from those corporations or from their
regulated subsidiaries and affiliates, and to require the reporting
of certain information.
   This bill would require the commission to compile and make
publicly available a comprehensive list of corporate responsibility
principals to be followed by all public utilities whose rates and
charges are regulated under rate-of-return regulation by the
commission.
   This bill would require that a public utility whose rates and
charges are regulated under rate-of-return regulation by the
commission, with annual gross revenue of $50,000,000 or more, report
by April 1 of each year, to the Legislature and the commission, and
make publicly available on a company Internet Web site certain
information relative to employee and executive compensation. The bill
would require the commission to annually poll 1,000 ratepayers
within the service territory of the public utility to obtain an
advisory opinion on the ratepayers' views of the executive
compensation paid by the public utility and report those views to the
public utility and the Legislature and make the results available,
in summary form, on the commission's Internet Web site. The bill
would require the commission to consider the information in any
ratemaking case involving the public utility and in any merger or
acquisition involving the public utility, and include findings
relative to this information in the decision of the commission.
   This bill would require the commission to consider corporate
philanthropy when considering any ratemaking case, or merger or
acquisition of a public utility whose rates and charges are regulated
under rate-of-return regulation by the commission, with annual gross
revenue of $50,000,000 or more and to include information relative
to the public utility's philanthropy in the utility's triennial
general ratemaking case.
   This bill would require the commission to require any public
utility whose rates and charges are regulated under rate-of-return
regulation by the commission, to gather data by ethnicity and gender
for labor, management, and executive employees, and for the board of
directors, and submit this information by April 1 of each year, to
the Legislature and the commission, and to make the information
publicly available on a company Internet Web site.
   This bill would require the commission to include information on a
public utility's compliance with the program developed by the
commission to encourage, recruit, and utilize minority-, women-, and
disabled veteran-owned business enterprises in any decision in a
ratemaking case, or involving a merger or acquisition involving the
public utility.
   This bill would require the commission, for any public utility
whose rates and charges are regulated under rate-of-return regulation
by the commission, with annual gross revenue of $50,000,000 or more,
to schedule hearings for the convenience of ratepayers in the
community of affected ratepayers to ensure that ratepayers have
reasonable notice of any proceeding of the commission that may have a
substantial effect upon the rates and charges of a public utility
and have a reasonable opportunity to participate in the proceeding.
The bill would require the commission to establish a procedure
whereby newspapers and other media sources may request notices of
hearings and proceedings and would require the commission to consider
the comments of ratepayers in reaching any decision in the
proceeding.
   This bill would require the commission to annually make available
on its Internet Web site, a summary of the disposition of all
credible local, state, federal, and international rulings relating to
a public utility's corporate responsibilities, including any
disciplinary or enforcement activity with respect to the public
utility. The bill would require the commission to consider this
information in any proceeding involving the public utility, and would
authorize the commission to order any remediatory action be taken
that is determined to be reasonable, as a condition for approving any
rate increase, merger, acquisition, or other approval by the
commission.
   The bill would require the commission, by April 1 of each year, to
report to the Legislature and make publicly available on the
commission's Internet Web site, a summary of all actions taken by the
commission relative to a public utility's corporate responsibilities
pursuant to the above-described requirements, and to include a
summary of the effect of the commission's actions on the interests of
ratepayers.
   Under existing law, a violation of any order, decision, rule,
direction, demand, or requirement of the commission is a crime.
   Because violation of an order or decision of the commission
implementing its requirements would be a crime, the bill would impose
a state-mandated local program by creating a new crime.
   The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
   This bill would provide that no reimbursement is required by this
act for a specified reason.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Article 6 (commencing with Section 8290) is added to
Chapter 7 of Division 4 of the Public Utilities Code, to read:

      Article 6.  Corporate Responsibilities of Public Utilities


   8290.  (a) The Legislature finds and declares all of the
following:
   (1) Public utilities that have been granted a territorial monopoly
and are regulated pursuant to rate-of-return regulation of their
fees and charges by the commission are insulated from market forces
and these public utilities have a special responsibility to their
ratepayers, whose rates ensure their success and that of their
executives and shareholders.
   (2) It is the intent of the Legislature, through this article, to
codify the corporate responsibilities of public utilities toward
their ratepayers.
   (3) It is the intent of the Legislature that compliance with
corporate responsibilities be a mandatory consideration by the
commission in any application by the public utility for a change in
rates, change in services offered by the utility, and in any approval
for a merger or acquisition and that the findings of the commission
reflect that consideration.
   (4) It is the further intent of the Legislature that public
hearings be held whenever ratepayers raise substantial issues
relative to a public utility's compliance with its corporate
responsibilities.
   (b) The commission shall compile and make publicly available a
comprehensive list of corporate responsibility principals to be
followed by all public utilities whose rates and charges are
regulated under rate-of-return regulation by the commission.
   8291.  (a) The Legislature finds and declares both of the
following:
   (1) Executive compensation affects a public utility's bottom line
and therefore has a direct impact on rates approved by the
commission.
   (2) While it is not the intent of the Legislature to establish
maximum compensation that a public utility may pay its executives, it
is the intent of the Legislature to improve public accountability
with respect to executive compensation, including the "perks" of
office.
   (b) A public utility whose rates and charges are regulated under
rate-of-return regulation by the commission, with annual gross
revenue of fifty million dollars ($50,000,000) or more, shall report
by April 1 of each year, to the Legislature and the commission, and
make publicly available on a company Internet Web site, all the
following:
   (1) The aggregate compensation of any employee who received more
in compensation than the Governor's annual authorized compensation.
   (2) A summary of the aggregate compensation for all personnel
receiving more in annual compensation than the Governor's annual
authorized compensation during the prior year.
   (3) A comparison of the aggregate compensation paid to executives
of the corporation compared to the median compensation paid to
California employees of the public utility below the executive level.

   (4) A comparison of the total compensation paid to executive
employees of the corporation compared to the aggregate philanthropy
provided during the same time period to underserved and low-income
communities.
   (c) The commission shall, for any public utility subject to the
requirements of subdivision (b), annually poll 1,000 ratepayers
within the service territory of the public utility to obtain an
advisory opinion on the ratepayers' views of the executive
compensation paid by the public utility and report those views to the
public utility and the Legislature and make the results available,
in summary form, on the commission's Internet Web site.
   (d) The commission shall, for any public utility subject to the
requirements of subdivision (b), consider the information in any
ratemaking case involving the public utility and in any merger or
acquisition involving the public utility, and shall include findings
relative to this information in the decision of the commission in
those proceedings.
   8292.  (a) The Legislature finds and declares that although the
cost of philanthropy may be born by shareholders, philanthropy
affects and benefits ratepayers and philanthropy is a form of
corporate goodwill, marketing, and part of the corporate
responsibilities of public utilities.
   (b) The commission shall, for any public utility whose rates and
charges are regulated under rate-of-return regulation by the
commission, with annual gross revenue of fifty million dollars
($50,000,000) or more, consider corporate philanthropy when
considering any ratemaking case involving the public utility, or in
any merger or acquisition involving the public utility.
   (c) The commission shall, in any triennial general ratemaking case
for a public utility regulated under rate-of-return regulation by
the commission, with annual gross revenue of fifty million dollars
($50,000,000) or more, include the amount of the public utility's
philanthropy in the decision of the commission with a breakdown for
amounts going to underserved and low-income communities or other
relevant categories of philanthropy.
   8293.  (a) The Legislature finds and declares that the survival
and profitability of a public utility is, in part, dependent upon
ratepayer support and public utilities should strive to make the
diversity of their workforce, including management and executive
level employees, reflective of the diversity of the public they
serve.
   (b) The commission shall, for any public utility whose rates and
charges are regulated under rate-of-return regulation by the
commission, require the public utility to gather data by ethnicity
and gender for labor, management, and executive employees, and for
the board of directors, and submit this information by April 1 of
each year, to the Legislature and the commission, and to make the
information publicly available on a company Internet Web site. For
any public utility whose service territory includes areas outside of
California, the information shall be provided both on a company-wide
basis and on a California-specific basis.
   8294.  The commission shall, for any public utility that is
subject to the requirements of Article 5 (commencing with Section
8281), include information on the public utility's compliance with
those requirements in any decision in a ratemaking case involving the
public utility, or in any decision involving a merger or acquisition
involving the public utility.
   8295.  (a) It is the intent of the Legislature that the commission
ensure that ratepayers are informed of, and have an opportunity to
participate in, any proceeding of the commission that may have a
substantial effect upon the rates and charges of a public utility and
that public hearings be held in the ratepayers' community whenever
ratepayer groups request that this be done.
   (b) The commission shall, for any public utility whose rates and
charges are regulated under rate-of-return regulation by the
commission, with annual gross revenue of fifty million dollars
($50,000,000) or more, schedule hearings for the convenience of
ratepayers in the community of affected ratepayers to ensure that
ratepayers have reasonable notice of any proceeding of the commission
that may have a substantial effect upon the rates and charges of a
public utility and have a reasonable opportunity to participate in
the proceeding. The public notice of the hearing shall be in plain
language and be designed to fully inform ratepayers of the nature of
the hearing. The commission shall establish a procedure whereby
newspapers and other media sources may request notices of hearings
and proceedings. The commission shall consider the comments of
ratepayers in reaching any decision in the proceeding.
   8296.  (a) The commission shall annually make available on its
Internet Web site, a summary of the disposition of all credible
local, state, federal, and international rulings relating to a public
utility's corporate responsibilities, including any disciplinary or
enforcement activity with respect to the public utility.
   (b) The commission shall consider the information responsive to
subdivision (a) in any ratemaking case involving the public utility,
in any merger or acquisition involving the public utility, or in any
other proceeding involving the public utility, and may order any
remediatory action be taken that is determined to be reasonable, as a
condition for approving any rate increase, merger, acquisition, or
other approval by the commission.
   8297.  The commission shall, by April 1 of each year, report to
the Legislature and make publicly available on the commission's
Internet Web site, a summary of all actions taken by the commission
pursuant to this article, with a summary of the effect of the
commission's actions on the interests of ratepayers.
  SEC. 2.  No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.