BILL ANALYSIS 1
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SENATE ENERGY, UTILITIES AND COMMUNICATIONS COMMITTEE
ALEX PADILLA, CHAIR
SB 1414 - Kehoe Hearing Date:
April 6, 2010 S
As Amended: March 25, 2010 FISCAL B
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DESCRIPTION
Summary : This bill would require the California Public
Utilities Commission to act more expeditiously on applications
for rehearing of its decisions so that parties seeking agency
and court review of decisions are not denied a remedy.
Existing law allows any party to a proceeding before the
California Public Utilities Commission (CPUC) to file an
application asking the CPUC to rehear any issue decided in an
order issued in that proceeding. Existing law gives the CPUC
discretion to grant or deny an application for rehearing and
does not specify a time by which it must act on such an
application, although an application may be deemed denied if the
CPUC does not act within 60 days.
This bill would require that an application for rehearing be
acted upon within 120 days.
Existing law provides that the filing of an application for
rehearing of a CPUC decision generally does not stay or suspend
the decision or excuse any person or corporation from complying
with the decision.
This bill would provide that, if the CPUC does not act upon an
application for rehearing within 120 days, the underlying order
shall be suspended until the application is granted or denied.
BACKGROUND
Laws governing rehearing and judicial review of CPUC decisions
seek to achieve judicial economy by having matters first
resolved by the agency but also seek to provide parties
expeditious resolution of claims and certainty as to the effect
of CPUC decisions. A party may petition a state appellate court
or the state Supreme Court to review a CPUC decision but is
required to first seek a rehearing by the CPUC. A petition for
judicial review of a CPUC decision is timely only if filed
within one of the following time periods:
1) Within 30 days after the CPUC issues a decision denying
an application for rehearing.
2) Within 30 days after the CPUC issues a decision on
rehearing if an application for rehearing is granted.
3) Within 60 days after an application for rehearing is
filed if the CPUC fails to act on the application for
rehearing.
According to the sponsor, the CPUC rarely acts on an application
for rehearing within 60 days. The attached data provided by the
CPUC reflect a very high rate of applications being deemed
denied, although an exact percentage is impossible to calculate
because the data are presented by calendar year rather than
tracking each application. The CPUC's January 2010 report to
the Governor and Legislature on "Timely Resolution of
Proceedings and Commissioner Presence at Hearings" does not
separately report on applications for rehearing, but the data in
the report reveal that several applications for rehearing have
been pending for more than a year.
Thus, a party that files an application for rehearing typically
becomes eligible to seek judicial review under the "deemed
denied" scenario when the CPUC fails to act within 60 days.
However, according to the sponsor and confirmed by CPUC staff,
when a party seeks judicial review under this scenario, the CPUC
typically asks the court to not grant review until the CPUC
rules on the application for rehearing, and the court,
exercising its discretion, typically complies with the CPUC's
request and declines review. As a result, even when parties
comply with all procedural requirements to seek rehearing and
judicial review, review of CPUC decisions is effectively denied
until the CPUC acts on the application for rehearing, which can
take months or even years. Moreover, knowing the court likely
will decline review of a "deemed denied" application for
rehearing, parties are reluctant to undertake the time and
expense of appellate litigation.
During this period of delay, the underlying CPUC decision
remains in effect. With a limited exception rarely applicable,
existing law provides that an application for rehearing "shall
not excuse any corporation or person from complying with and
obeying any order" of the CPUC nor shall an application for
rehearing "operate in any manner to stay or postpone the
enforcement" of that order, unless the CPUC orders a stay.
Thus, in nearly all cases, a CPUC decision remains in effect
while an application for rehearing is pending.
COMMENTS
1) Limited Judicial Review . Judicial review of CPUC
decisions has historically been extremely limited and
available only at the discretion of the court. Adding even
more restraint to this already limited review is the lack
of any effective deadline for CPUC action on applications
for rehearing. A sampling of CPUC practitioners confirms
that this is an ongoing problem. As stated by the sponsor,
the extended delay of months and years for CPUC action on
an application for rehearing effectively denies any right
to judicial review of CPUC decisions. This bill seeks to
remedy this problem through exercise of the Legislature's
"plenary power . . . to establish the manner and scope of
review of Commission action in a court of record."
2) Management of CPUC Resources . If, as the CPUC claims,
the cause for failing to act on applications for rehearing
within 60 days is a lack of adequate resources, then the
solution is either more resources or more time to act.
This bill doubles the period to act from 60 days to 120
days, which should result in more applications being
decided on the merits before a party decides whether to
seek judicial review. However, CPUC data provided thus far
does not indicate the actual length of time for action
beyond the 60 days. Thus, once the CPUC provides this
additional data (see Comment 4), the author may wish to
consider adjusting this 120 days upward or downward to
reflect a realistic expectation of more applications being
acted on within this period.
3) Incentive to Reduce Delay. If the cause for delay is a
lack of incentive to act more quickly on applications for
rehearing regardless of available resources, then this bill
correctly tries to create an incentive to act by requiring
that CPUC decisions be suspended until the applications are
acted upon. The threat of having a decision suspended
theoretically will motivate the CPUC to act more quickly,
even if that requires reallocating resources. However,
regulatory confusion could result when a decision goes into
effect, is suspended 120 days later if the CPUC fails to
act, and then goes back into effect once the CPUC grants or
denies the application. Depending on the decision, the
cost of off-and-on compliance and customer confusion could
be significant. Nonetheless, despite these potential
effects, the CPUC currently suspends some of its decisions
while an application for rehearing is pending, and
decisions often are stayed during judicial review.
Existing law that allows for stay of CPUC decisions while
under court review provides an exception for decisions
authorizing a change in rates. The author and committee
may wish to consider amending the bill to provide that a
CPUC decision that authorizes a change in rates will not be
subject to suspension. In addition, the author and
committee may wish to consider amending the bill to clarify
that this bill would suspend only the part of a CPUC
decision that is subject to an application for rehearing.
4) More Data Needed . In order to further understand the
problem this bill addresses, additional data is required.
The CPUC has been asked to provide answers to the following
questions regarding the attached data:
For each application for rehearing filed in
the last three years (63 in 2007, 35 in 2008, and 42
in 2009), how many days after filing did the CPUC
grant or deny the application?
For each application for rehearing deemed
denied for failure to act within 60 days in the last
three years (51 in 2007, 30 in 2008, and 24 in 2009),
was it eventually granted or denied, and how many days
beyond 60 was this decision issued?
For each decision stayed by the CPUC while an
application for rehearing was pending in the last
three years (6 in 2007, 5 in 2008, and 9 in 2009), why
was a stay of enforcement of that decision found to be
appropriate, and did the stay result in regulatory
confusion?
In each of the cases where a party filed for
judicial review after an application for rehearing was
deemed denied in the last three years (1 each year),
did the CPUC ask the court to decline review until it
acted on the application, and did the court decline
review?
The author and committee may wish to consider amending the
bill to require the CPUC's annual report on "Timely
Resolution of Proceedings and Commissioner Presence at
Hearings" to include data on the disposition of all
applications for rehearing filed in the reporting year.
POSITIONS
Sponsor:
The Utility Reform Network (TURN)
Support:
None on file.
Oppose:
None on file.
Jackie Kinney
SB 1414 Analysis
Hearing Date: April 6, 2010
Attachment