BILL ANALYSIS 1
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SENATE ENERGY, UTILITIES AND COMMUNICATIONS COMMITTEE
ALEX PADILLA, CHAIR
SB 1414 - Kehoe Hearing Date:
April 20, 2010 S
As Amended: April 13, 2010 FISCAL
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DESCRIPTION
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 or the application shall be deemed
denied.
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, except if an application is made 10 days or
more before the effective date of the order, then the order
shall be suspended for 60 days.
This bill would provide that, if an application for rehearing of
an order is made 10 days or more before the effective date of
that order, then the 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. 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. In the rare instance of an application for rehearing of
an order made 10 days or more before the effective date of that
order, existing law provides that the order shall be suspended
for 60 days, which this bill would change to make the order
suspended until the application is granted or denied. 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 before an application is deemed denied, 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
3), 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.
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:
TURN
Oppose:
None on file.
Jackie Kinney
SB 1414 Analysis
Hearing Date: April 20, 2010
Attachment