BILL ANALYSIS
SB 1414
Page 1
Date of Hearing: June 28, 2010
ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
Steven Bradford, Chair
SB 1414 (Kehoe) - As Amended: June 22, 2010
SENATE VOTE : 31-0
SUBJECT : Public Utilities Commission: procedures: rehearings.
SUMMARY : This bill creates a deadline for the California
Public Utilities Commission (PUC) to either grant or deny, in
part or in whole, an application for rehearing. Specifically,
this bill :
1)Creates a 60-day period for the PUC to act upon an application
for rehearing.
2)Authorizes the PUC to extend the 60-day period for acting upon
the application for rehearing. Any single order shall not
extend that period for more than an additional 120 days.
3)Provides that if an application is not acted upon by the PUC
within one year after the date the application was filed, the
application is denied by operation of law, unless the party
consents to an extension.
4)Mandates this new provision is applicable to rehearing
applications filed on or after July 1, 2011.
EXISTING LAW :
1)Provides that the PUC has regulatory authority over public
utilities and allows it to establish its own procedures,
subject to statutory limitations or directions and
constitutional requirements of due process.
2)Authorizes any party to an action or proceeding, or any
stockholder or bondholder or other party interested in the
public utility affected by an order or decision of the PUC, to
apply for a rehearing with respect to any matter determined in
the action or proceeding and specified in the application for
rehearing.
3)Prohibits a cause of action arising out of any order or
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decision of the PUC from accruing in a court to a corporation
or person unless the corporation or person has filed an
application to the PUC for a rehearing within a specified
amount of time after the date of issuance of the order or
decision.
4)Provides that any rehearing application made 10 days or more
before the effective date of a PUC order shall be either
granted or denied before the effective date of the order, or
the order is suspended until the application is granted or
denied.
5)Provides that the suspension ceases after 60 days, the order
becomes effective, and the party making the application is
authorized to take the application as having been denied,
absent a further order of the PUC.
FISCAL EFFECT : Unknown.
COMMENTS : According to the author, this portion of the Public
Utilities Code has only been amended twice in the last 60 years.
The last time it was amended was in 1973 when PU code section
1733 was divided into two subdivisions and 60 days replaced 20
days for the review period.
The author further states that in the past 35 years, the PUC
workload has increased and it is clear that the 60 day review
period is simply not enough time for the PUC to adequately
handle their rehearing application reviews resulting in lengthy
delays for applicants. SB 1414 seeks to update Section 1733 to
ensure the timeliness of rehearing application review and
clearly provide any additional remedies for parties seeking a
rehearing or wishing to resolve their issue in court.
Background : Under current law, parties and certain other
entities are directly affected by an action, decision, or order
of the PUC may apply to the PUC in order to have a rehearing on
their matter of concern. Moreover, a party may petition a state
appellate court or the state Supreme Court to review a PUC
decision, but the party must first seek a rehearing by the PUC.
A petition for judicial review of a PUC decision is timely only
if filed within one of the following time periods:
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1) Within 30 days after the PUC issues a decision
denying
an application for rehearing.
2) Within 30 days after the PUC 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 PUC fails to act on the application
for
rehearing.
The PUC has no statutory deadline to act on rehearing
applications. However, parties are allowed to file a writ of
review after 60 days if the PUC has not acted upon rehearing
application. Often, the PUC will ask the court to stay any
action until the PUC rules on the application for rehearing.
Under this scenario, the court, exercising its discretion,
generally declines review until the PUC acts within a court
given timeline.
If the court declines review, the parties have no other
procedural recourse until the PUC acts on the application for
rehearing which can take several months or even a year.
Moreover, knowing the court will likely decline review of a
"deemed denied" application for rehearing, some parties are
reluctant to undertake the time and expense of appellate
litigation.
During this period of delay, the underlying PUC decision remains
in effect. Existing law provides that a rehearing application
"shall not excuse any corporation or person from complying with
and obeying any order" of the PUC nor shall an application for
rehearing "operate in any manner to stay or postpone the
enforcement" of that order, unless the PUC 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. Thus, in nearly all cases, a PUC decision remains in
effect while an application for rehearing is pending.
The record reflects : Pursuant to a request from the Senate
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Energy, Utilities & Communications Committee, the PUC provided
the committee with the attached compilation of data pertaining
to the disposition of rehearing applications filed between 2007
and 2010. The data indicates that 60 days is not a sufficient
timeframe for the PUC to review rehearing applications.
According to the data, nearly 20% of the PUC's rehearing
applications over the last several years take at least 120 days
to be disposed.
What could be causing the delay/backlog : According to the PUC,
the backlog in the disposition of the applications for rehearing
is largely attributable to staffing and workload constraints
over the past several years. The state appellate practice
section at the PUC has been compelled to deal with very complex
and controversial rehearing applications, including those
involving CEQA, climate change, and greenhouse gas issues, which
have been given a higher priority. The PUC further notes they
have fewer section attorneys at their disposal due to the
detailing of attorneys to handle necessary proceedings before
the PUC, and attorneys who have retired or gone on maternity
leave. Moreover, many of the delays in disposing of rehearing
applications occur due to ongoing settlement discussions with
the parties, changed circumstances, subsequent PUC action, or
legislation.
The PUC attorneys are tasked to do a thorough and meticulous
independent review of rehearing applications which may generally
add to the time in completing their recommendations to the PUC.
The PUC states that such a comprehensive review means good
decision-making, and it serves the interest of ratepayers,
utilities and the public.
After further review and evaluation, the legislature may wish to
consider providing the PUC with additional staffing resources in
the state appellate section.
Denied by operation of law : After one year, this bill renders
the application for rehearing denied by operation of law, unless
the party(s) consent to going past the one-year deadline.
Consequently, the PUC is concerned that a provision which would
automatically deem a petition denied would ultimately have
unintended consequences for some petitioners. According to the
PUC, in many instances today, the petitioners would prefer the
matter stay with the PUC instead of having jurisdiction shifted
to the courts. For example, when a settlement negotiation is
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conducted concurrently with the petition to modify, parties to
the settlement negotiation prefer the petition be held open
until they have had an opportunity to complete the negotiations.
Also, the one year deadline could have the unintended
consequence of undermining the momentum of settlement
negotiations in multi-party situations. Where there are multiple
parties involved, one uncooperative party could deny consent for
the extension of the rehearing application beyond one year. More
data is needed from the PUC to provide this committee with the
average number of rehearing cases that have multiple applicants
to determine whether the one year deadline is a significant
concern.
Possible remedies : For rehearing applications that are not
disposed by the PUC within 60 days, this bill allows the PUC, by
order, to extend the period for acting upon the application for
no more than 120 days at a time. This "extension by order"
provision may increase the visibility and highlight for the
commissioners those cases that are still outstanding which may
help the PUC with managing the backlog. In any case, if the PUC
orders an extension, a party is not precluded from exercising
its right to take the case to court. However, it is unclear
whether it is necessary to include this in statute since the PUC
could implement this administratively.
REGISTERED SUPPORT / OPPOSITION :
Support
California Association of Competitive Telecommunications
Companies (CALTEL)
Opposition
None on file.
Analysis Prepared by : DaVina Flemings / U. & C. / (916)
319-2083