BILL ANALYSIS �
AB 1693
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CONCURRENCE IN SENATE AMENDMENTS
AB 1693 (Perea)
As Amended August 19, 2014
Majority vote
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|ASSEMBLY: |75-1 |(April 21, |SENATE: |29-0 |(August 21, |
| | |2014) | | |2014) |
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Original Committee Reference: U. & C.
SUMMARY : Requires the California Public Utilities Commission
(PUC) to issue a final decision on a general rate case of a
small independent telephone corporate within a specified
timeframe. Specifically, this bill :
1)Requires the PUC to issue a final decision on a general rate
case of a small independent telephone corporation no later
than 330 days following the corporation's initial filing of
the general rate case application or advice letter.
2)Establishes an interim rate period. If the PUC fails to issue
a final decision by the 330th day, the rate design proposed by
the telephone corporation will take effect on an interim basis
beginning 360 calendar days following the filing of the
application or advice letter. This interim rate is subject to
an accounting true-up in the final decision, if the decision
is issued within 540 days of filing. If the decision is not
issued within 540 days, the interim rate will be in place
until the PUC issues a final decision and will not be subject
to an accounting true-up.
3)Requires any new rate design adopted in a final decision or
resolution issued by the PUC after the 540-day period to take
effect prospectively.
4)Allows the required timeframes to be waived by mutual consent
of the executive director of the PUC and the telephone
corporation.
The Senate amendments
1)Requires the PUC to issue its final decision on a general rate
case of a small independent telephone corporation no later
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than 390 days following the corporation's initial filing of
the general rate case application or advice letter.
2)Allows the interim rate period, if the PUC fails to issue a
final decision, to begin 420 days following the filing of the
application or advice letter.
3)Allows the interim rate period to become final, effective as
of the 420th day, if the PUC fails to issue a decision with
540 days.
4)Specifies the dates for which the bill's provisions shall
become applicable to a general rate case that is pending on
January 1, 2015.
FISCAL EFFECT : According to the Senate Appropriations
Committee, minor and absorbable costs to the Public Utilities
Reimbursement Account (special) to the CPUC to decrease the time
to complete GRCs [general rate cases] for small independent
telephone companies.
COMMENTS : According to the author, "Until recently, the PUC
routinely processed small rural telephone corporation rate cases
within a year of filing. However, the latest telephone company
rate case has experienced unreasonable delays with the PUC
taking almost two years to final decide to stay the telephone
company's rate case, likely for another year or longer. The
longer the PUC takes to complete a ratemaking case, the more
costly it becomes for the telephone company since the new rates
do not go into effect until they are approved by the full
Commission and they are not retroactive. Small telephone
companies need their rate cases addressed within a reasonable
period so they are able to plan for investments in
infrastructure upgrades to make service better for their
customers."
Background: Currently, there are approximately 10 small
independent telephone corporations which primarily serve
customers in rural areas of the state and are subject to PUC
regulation. This means they cannot change any rate without PUC
review and approval. The companies are: Calaveras Telephone,
Cal-Ore Telephone, Ducor Telephone, Sebastian dba Foresthill
Telephone and Kerman Telephone, Pinnacles Telephone, Ponderosa
Telephone, Sierra Telephone, and Siskiyou Telephone, and TDS
Telecom.
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Two channels exist for the submission of rate cases by small
independent telephone corporations, one "formal" and the other
"informal." The formal process involves the submission of an
application, which opens a formal PUC proceeding to address the
case. Formal cases are subject to the PUCs procedural rules
governing rate setting proceedings, including ex parte
restrictions, scoping procedures, and the process for
preparation and consideration of a proposed decision.
Administrative Law Judges (ALJs) preside over formal cases and
the process is guided by an Assigned Commissioner. Formal cases
involve the preparation of testimony and a formal evidentiary
hearing in which that testimony can be tested through
appropriate cross-examination. Typically, the PUCs Office of
Ratepayer Advocates (ORA) intervenes in a formal rate case to
represent the ratepayer viewpoint. ORA provides a formal
protest, conducts discovery, submits testimony, and participates
in the evidentiary hearing as an independent party. Formal
cases are sometimes resolved through settlements between the
company and ORA, but any settlement must be approved by the PUC
before it can take effect. Ultimately, formal cases generate a
PUC Decision that concludes the case and either adopts the
company's proposed relief, denies relief, or adopts the relief
in part.
Informal cases are initiated by advice letter, and are processed
by the PUCs Communications Division. There is no proceeding for
the informal process and no official procedural events.
Informal cases involve significant data requests and review by
Communications Division staff and the preparation of a Draft
Resolution that is ultimately considered by the PUC for adoption
as a Final Resolution. There is no ALJ or Assigned
Commissioner, no ex parte restrictions, no scoping limitations,
no testimony, and no hearing in an informal case.
Both types of cases involve the same exact questions regarding
revenue requirement and rate design. They are different only in
the procedure that is followed. Historically, informal and
formal rate cases have both taken approximately one year to
complete.
Analysis Prepared by : DaVina Flemings / U. & C. / (916)
319-2083
AB 1693
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FN: 0005097