Amended in Assembly April 16, 2013

California Legislature—2013–14 Regular Session

Assembly Bill No. 995

Introduced by Assembly Member Frazier

February 22, 2013

An act to amend begin delete Section end delete begin insert Sections 1801.3, 1802, 1802.5, 1803, and end insert 1804 of begin insert , and to add Section 1802.1 to, end insert the Public Utilities Code, relating to public utilities.

LEGISLATIVE COUNSEL’S DIGEST

AB 995, as amended, Frazier. Public utilities: intervenor fees: customers.

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Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including electrical, gas, telephone, telegraph, and water corporations, as defined, and can establish its own procedures, subject to statutory limitations or directions and constitutional requirements of due process. Existing law requires the commission to award reasonable advocate’s fees, reasonable expert witness fees, and other reasonable costs to customers, as defined, of an electrical, gas, telegraph, telephone, and water corporation who comply with specified procedures, if the customer’s presentation makes a substantial contribution, as defined, to the adoption, in whole or in part, of the commission’s order or decision and the customer’s participation or intervention without an award of fees or costs imposes a significant financial hardship, as defined. A “substantial contribution” is defined as meaning that, in the judgment of the commission, the customer’s presentation has substantially assisted the commission in the making of its order or decision because the order or decision has adopted in whole or in part one or more factual contentions, legal contentions, or specific policy or procedural recommendations presented by the customer.

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This bill would require the commission, by July 1, 2015, to adopt rules establishing standards to verify that a customer representative is authorized by consumers, customers, or subscribers of any electrical, gas, telephone, telegraph, or water corporation to represent their interests. The bill would revise the definition of “substantial contribution” to additionally require that the commission find that the customer’s participation promoted a public purpose that directly benefits other customers. The bill would require the commission to award reasonable advocate’s fees, reasonable expert witness fees, and other reasonable costs to customers of an electrical, gas, telegraph, telephone, and water corporation who comply with specified procedures, if the customer’s presentation makes a substantial contribution to the adoption, in whole or in part, of the commission’s order or decision and promotes a public purpose that benefits other customers, and the customer’s participation or intervention without an award of fees or costs imposes a significant financial hardship, as defined. The bill would prohibit the total amount the commission annually awards for intervenor compensation from exceeding the mean average of awards for the previous 3 calendar years.

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Existing law provides that participation by a customer that materially supplements, complements, or contributes to the presentation of another party, including the commission staff, may be fully eligible for compensation if the participation makes a substantial contribution to a commission order or decision, consistent with specified requirements.

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Existing law establishes a division within the commission, known as the Division of Ratepayer Advocates, to represent the interests of public utility customers and subscribers, with the goal of obtaining the lowest possible rate for service consistent with reliable and safe service levels.

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This bill would provide that a customer’s participation that substantially duplicates the presentation of the commission’s Division of Ratepayer Advocates, or that falls within the scope and purview of the division, is not eligible for compensation, unless the commission determines that it provided a substantial contribution to promote a public purpose that the division did not provide.

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Existing law requires a customer who intends to seek an award for intervenor fees to timely file and serve on all parties to the proceeding a notice of intent to claim compensation begin delete , containing specified information. Existing law authorizes an administrative law judge that is assigned to the proceeding in which intervenor compensation is sought to issue a ruling addressing issues raised by the notice of intent to claim compensation and to point out similar positions, areas of potential duplication in showings, unrealistic expectation for compensation, and any other matter that may affect the customer’s ultimate claim for compensation. Existing law authorizes a customer found to be eligible for compensation to file within 60 days of the issuance of a final order or decision of the Public Utilities Commission a request for an award. end delete begin insert which includes a statement of the nature and extent of the customer’s planned participation in the proceeding and an itemized estimate of the compensation that the customer expects to request, given the likely duration of the proceeding as it appears at the time of the filing of the notice. end insert

This bill would begin delete revise the time period for a customer to file a request for an award to 30 days of the issuance of a final order or decision. end delete begin insert additionally require that the notice of intent to claim compensation include a verification of the individual customer or group of customers being represented. end insert

Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.

The people of the State of California do enact as follows:

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begin insert SECTION 1. end insert   

end insert

begin insert The Legislature finds and declares all of the
following: end insert

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(a) The intervenor compensation program administered by the
Public Utilities Commission provides compensation to individuals
and groups participating in commission proceedings involving
electrical, gas, water, and telephone corporations to cover the
reasonable costs of participation.

end insert begin insert

(b) The program compensates individual customers, and groups
representing customers, that lack the financial resources otherwise
necessary to advocate in commission proceedings.

end insert begin insert

(c) Intervenor awards are paid from funds collected from
ratepayers.

end insert begin insert

(d) The intent of the program is to compensate an intervenor
for participation, when his or her participation promotes a public
purpose and benefits other, nonparticipating ratepayers, and when
it presents evidence or arguments that are separate and distinct
from those presented by the commission’s Division of Ratepayer
Advocates.

end insert begin insert

(e) The Division of Ratepayer Advocates is the independent
consumer advocate within the commission.

end insert begin insert

(f) The Division of Ratepayer Advocates has a statutory directive
to represent consumer interests at commission proceedings, to
obtain the lowest possible rate for service consistent with reliable
and safe service levels, and to advocate for customer and
environmental protections.

end insert

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begin insert SEC. 2. end insert   

end insert

begin insert Section 1801.3 of the end insert begin insert Public Utilities Code end insert begin insert is amended
to read: end insert

1801.3.  

It is the intent of the Legislature that:

(a) The provisions of this article shall apply to all formal
proceedings of the commission involving electric, gas, water, and
telephone utilities.

(b) The provisions of this article shall be administered in a
manner that encourages the effective and efficient participation of
all groups that have a stake in the public utility regulation process.

(c) The process for finding eligibility for intervenor
compensation be streamlined, by simplifying the preliminary
showing by an intervenor of issues, budget, and costs.

(d) Intervenors be compensated for making a substantial
contribution to proceedings of the commission, as determined by
the commission in its orders and decisions.

(e) Intervenor compensation be awarded to eligible intervenors
in a timely manner, within a reasonable period after the intervenor
has made the substantial contribution to a proceeding that is the
basis for the compensation award.

(f) This article shall be administered in a manner that avoids
begin delete unproductive or unnecessary end delete participation that duplicates the
participation of similar interests otherwise adequately represented
or participation that is not necessary for a fair determination of the
proceeding.

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begin insert SEC. 3. end insert   

end insert

begin insert Section 1802 of the end insert begin insert Public Utilities Code end insert begin insert is amended
to read: end insert

1802.  

As used in this article:

(a) “Compensation” means payment for all or part, as determined
by the commission, of reasonable advocate’s fees, reasonable
expert witness fees, and other reasonable costs of preparation for
and participation in a proceeding, and includes the fees and costs
of obtaining an award under this article and of obtaining judicial
review, if any.

(b) (1) “Customer” means any of the following:

(A) A participant representing consumers, customers, or
subscribers of any electrical, gas, telephone, telegraph, or water
corporation that is subject to the jurisdiction of the commission.

(B) A representative who has been authorized by a customer.

(C) A representative of a group or organization authorized
pursuant to its articles of incorporation or bylaws to represent the
interests of residential customers, or to represent small commercial
customers who receive bundled electric service from an electrical
corporation.

(2) “Customer” does not include any state, federal, or local
government agency, any publicly owned public utility, or any
entity that, in the commission’s opinion, was established or formed
by a local government entity for the purpose of participating in a
commission proceeding.

(c) “Expert witness fees” means recorded or billed costs incurred
by a customer for an expert witness.

(d) “Other reasonable costs” means reasonable out-of-pocket
expenses directly incurred by a customer that are directly related
to the contentions or recommendations made by the customer that
resulted in a substantial contribution.

(e) “Party” means any interested party, respondent public utility,
or commission staff in a hearing or proceeding.

(f) “Proceeding” means an application, complaint, or
investigation, rulemaking, alternative dispute resolution procedures
in lieu of formal proceedings as may be sponsored or endorsed by
the commission, or other formal proceeding before the commission.

(g) “Significant financial hardship” means either that the
customer cannot afford, without undue hardship, to pay the costs
of effective participation, including advocate’s fees, expert witness
fees, and other reasonable costs of participation, or that, in the case
of a group or organization, the economic interest of the individual
members of the group or organization is small in comparison to
the costs of effective participation in the proceeding.

(h) “Small commercial customer” means any nonresidential
customer with a maximum peak demand of less than 50 kilowatts.
The commission may establish rules to modify or change the
definition of “small commercial customer,” including use of criteria
other than a peak demand threshold, if the commission determines
that the modification or change will promote participation in
proceedings at the commission by organizations representing small
businesses, without incorporating large commercial and industrial
customers.

(i) “Substantial contribution” means that, in the judgment of
the commission, the customer’s presentation has substantially
assisted the commission in the making of its order or decision
because the order or decision has adopted in whole or in part one
or more factual contentions, legal contentions, or specific policy
or procedural recommendations presented by the customer begin insert and
the customer’s participation promoted a public purpose that
directly benefits other customers end insert . Where the customer’s
participation has resulted in a substantial contribution, even if the
decision adopts that customer’s contention or recommendations
only in part, the commission may award the customer compensation
for all reasonable advocate’s fees, reasonable expert fees, and other
reasonable costs incurred by the customer in preparing or
presenting that contention or recommendation.

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begin insert SEC. 4. end insert   

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begin insert Section 1802.1 is added to the end insert begin insert Public Utilities Code end insert begin insert ,
to read: end insert

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begin insert 1802.1. end insert   

By July 1, 2015, the commission shall adopt rules
establishing standards to verify that a “customer” representative
is authorized by consumers, customers, or subscribers of any
electrical, gas, telephone, telegraph, or water corporation to
represent their interests.

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begin insert SEC. 5. end insert   

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begin insert Section 1802.5 of the end insert begin insert Public Utilities Code end insert begin insert is amended
to read: end insert

1802.5.  

Participation by a customer that materially supplements,
complements, or contributes to the presentation of another party,
including the commission staff, may be fully eligible for
compensation if the participation makes a substantial contribution
to a commission order or decision, consistent with Section 1801.3. begin insert end insert
begin insert Participation that substantially duplicates the presentation of the
Division of Ratepayer Advocates, or that falls within the scope
and purview of the division, shall not be eligible for compensation,
unless the commission determines that it provided a substantial
contribution to promote a public purpose that the division did not
provide. end insert

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begin insert SEC. 6. end insert   

end insert

begin insert Section 1803 of the end insert begin insert Public Utilities Code end insert begin insert is amended
to read: end insert

1803.  

begin insert (a) end insert begin insert   end insert The commission shall award reasonable advocate’s
fees, reasonable expert witness fees, and other reasonable costs of
preparation for and participation in a hearing or proceeding to any
customer who complies with Section 1804 and satisfies both of
the following requirements:

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(a)

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begin insert (1) end insert  The customer’s presentation makes a substantial contribution
to the adoption, in whole or in part, of the commission’s order or
decision begin insert end insert begin insert and promotes a public purpose that benefits other
customers end insert .

begin delete

(b)

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begin insert (2) end insert  Participation or intervention without an award of fees or
costs imposes a significant financial hardship.

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(b) The total amount the commission may annually award for
intervenor compensation shall not exceed the mean average of
awards for the previous three calendar years.

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begin delete SECTION 1. end delete
begin insert SEC. 7. end insert   

Section 1804 of the Public Utilities Code is amended
to read:

1804.  

(a) (1) A customer who intends to seek an award under
this article shall, within 30 days after the prehearing conference
is held, file and serve on all parties to the proceeding a notice of
intent to claim compensation. In cases where no prehearing
conference is scheduled or where the commission anticipates that
the proceeding will take less than 30 days, the commission may
determine the procedure to be used in filing these requests. In cases
where the schedule would not reasonably allow parties to identify
issues within the timeframe set forth above, or where new issues
emerge subsequent to the time set for filing, the commission may
determine an appropriate procedure for accepting new or revised
notices of intent.

(2) (A) The notice of intent to claim compensation shall include
begin delete both end delete begin insert all end insert of the following:

(i) A statement of the nature and extent of the customer’s
planned participation in the proceeding as far as it is possible to
set it out when the notice of intent is filed.

(ii) An itemized estimate of the compensation that the customer
expects to request, given the likely duration of the proceeding as
it appears at the time.

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(iii) A verification of the individual customer or group of
customers being represented.

end insert

(B) The notice of intent may also include a showing by the
customer that participation in the hearing or proceeding would
pose a significant financial hardship. Alternatively, such a showing
shall be included in the request submitted pursuant to subdivision
(c).

(C) Within 15 days after service of the notice of intent to claim
compensation, the administrative law judge may direct the staff,
and may permit any other interested party, to file a statement
responding to the notice.

(b) (1) If the customer’s showing of significant financial
hardship was included in the notice filed pursuant to subdivision
(a), the administrative law judge, in consultation with the assigned
commissioner, shall issue within 30 days thereafter a preliminary
ruling addressing whether the customer will be eligible for an
award of compensation. The ruling shall address whether a showing
of significant financial hardship has been made. A finding of
significant financial hardship shall create a rebuttable presumption
of eligibility for compensation in other commission proceedings
commencing within one year of the date of that finding.

(2) The administrative law judge may, in any event, issue a
ruling addressing issues raised by the notice of intent to claim
compensation. The ruling may point out similar positions, areas
of potential duplication in showings, unrealistic expectation for
compensation, and any other matter that may affect the customer’s
ultimate claim for compensation. Failure of the ruling to point out
similar positions or potential duplication or any other potential
impact on the ultimate claim for compensation shall not imply
approval of any claim for compensation. A finding of significant
financial hardship in no way ensures compensation. Similarly, the
failure of the customer to identify a specific issue in the notice of
intent or to precisely estimate potential compensation shall not
preclude an award of reasonable compensation if a substantial
contribution is made.

(c) Following issuance of a final order or decision by the
commission in the hearing or proceeding, a customer who has been
found, pursuant to subdivision (b), to be eligible for an award of
compensation may file within begin delete 30 end delete begin insert 60 end insert days a request for an award.
The request shall include at a minimum a detailed description of
services and expenditures and a description of the customer’s
substantial contribution to the hearing or proceeding. Within 30
days after service of the request, the commission staff may file,
and any other party may file, a response to the request.

(d) The commission may audit the records and books of the
customer to the extent necessary to verify the basis for the award.
The commission shall preserve the confidentiality of the customer’s
records in making its audit. Within 20 days after completion of
the audit, if any, the commission shall direct that an audit report
shall be prepared and filed. Any other party may file a response
to the audit report within 20 days thereafter.

(e) Within 75 days after the filing of a request for compensation
pursuant to subdivision (c), or within 50 days after the filing of an
audit report, whichever occurs later, the commission shall issue a
decision that determines whether or not the customer has made a
substantial contribution to the final order or decision in the hearing
or proceeding. If the commission finds that the customer requesting
compensation has made a substantial contribution, the commission
shall describe this substantial contribution and shall determine the
amount of compensation to be paid pursuant to Section 1806.