BILL ANALYSIS 1 1 SENATE ENERGY, UTILITIES AND COMMUNICATIONS COMMITTEE DEBRA BOWEN, CHAIRWOMAN AB 2490 - Canciamilla Hearing Date: June 25, 2002 A As Amended: June 24, 2002 FISCAL B 2 4 9 0 DESCRIPTION Current law establishes procedures for the California Public Utilities Commission (CPUC) to resolve cases. Cases fall into one of three different categories: adjudicatory, ratesetting, or quasi-legislative. Adjudicatory cases must be resolved within 12 months unless the CPUC issues an order extending the deadline. Ratesetting and quasi-legislative cases must have final decision approved not later than 60 days after the proposed decision is issued, unless extraordinary circumstances exist. Current uncodified law requires the CPUC to annually submit a report to the Legislature on its timeliness in resolving cases. This bill changes the circumstances under which the CPUC may extend the deadlines for resolving cases. The 12 month deadline for adjudicatory cases can be extended by 60 days upon a vote of the CPUC. The maximum 60-day interval between a proposed decision and a final decision for both ratesetting and quasi-legislative cases can be extended by 60 days upon a vote of the commission or agreement by all parties in the case. This bill requires the CPUC to file a report to the Legislature whenever it misses a statutory deadline to resolve a case. BACKGROUND The CPUC's decision-making process has at its heart a courtroom. It's a formal process overseen by administrative law judges (ALJ) relying on a record of written and oral testimony acquired through public hearings. The ALJs create the record and assist in writing the decision for the commissioner assigned to the case. The initial, or proposed, decision of that commissioner is then reviewed by the other four commissioners. Those commissioners can then choose to vote for or against that proposed decision. It's not uncommon for a commissioner to draft an alternate to the assigned commissioner's proposed decision, which then may be considered by the commissioners. Final CPUC decisions can be appealed to the commission and, ultimately, to the courts. Current CPUC practice allows any commissioner the right to have a proposed decision not be voted upon during a commission meeting, a process known as a "hold." This gives every commissioner time to understand the final decision and craft an alternative, if he or she so chooses. There is no formal limit as to the number of "holds" a commissioner may have or that a proposed decision may be subject to, though the commission can override a "hold request" by a majority vote of the CPUC. The CPUC's decision making processes were last examined comprehensively in 1996 in conjunction with the electric restructuring effort. At that time, there were concerns about the lack of involvement by commissioners in developing the record and making the decisions, potential conflicts of interest, and a lack of timely decisions. SB 960 (Leonard), Chapter 856, Statutes of 1996, attempted to address those concerns by establishing the three categories of cases described above, creating ex-parte communication rules, establishing the Office of the Ratepayer Advocate whose director serves at the pleasure of the Governor, and encouraging much greater participation by, and access to, commissioners. The author believes that despite the enactment of SB 960 (Leonard), the CPUC routinely misses or ignores the deadlines for resolving cases. The author cites CPUC statistics showing that in 2000, the CPUC missed its deadline 27% of the time, while in 2001, it missed its deadline 34% of the time. COMMENTS 1)Why Are There Delays? This bill deals with the timeframe between a proposed CPUC decision and a final CPUC decision. This is the time when all the commissioner offices start to examine the case and consider offering alternative solutions. Part of the reason for the CPUC's delays in 1999 and 2000 is the commission was undergoing a political transformation from one appointed by Governor Wilson to one appointed by Governor Davis. That these two sets of commissioners might disagree on issues isn't surprising, nor is the notion that such disagreements would lead to alternative decisions being created, thereby delaying the resolution of cases. 2)Requiring A Vote To "Hold" A Decision Over . As noted above, any commissioner can put a "hold" on a proposed decision and ask that it be put over to another day. Any commissioner, including the author of the proposed decision, can ask for a vote to deny or override the "hold" request. This bill turns the current practice around by requiring a majority vote of the commission to postpone a vote on a proposed decision, instead of requiring a vote to override a request to postpone a vote on a particular decision. The author and committee may wish to consider how the public will be affected, either positively or negatively, by requiring commissioners to vote on requests to "hold" proposed decisions. 3)Will This Bill Restrict Dissent? By requiring a majority vote to delay consideration of a proposed decision, this bill could have the unintended effect of stifling dissent. Arguably, if a commissioner feels he or she has a majority of commissioners on his or her side to approve a proposed decisions, why would he or she vote to provide another commissioner with more time to create an alternative decision? Arguably, the same "conflict" takes place today in that a commissioner could push for a vote to override another commissioner's request to "hold" a particular proposed decision. This bill takes what is an informal practice (allowing a proposed decision to be held over unless a commissioner demands a vote to override it) and turns it into a formal practice (requiring all requests to hold a proposed decision over to be voted upon). 4)Logistical Implications . Prior to voting on any proposed decision, the commission must make the decision available for 30 days of public notice and comment, though that 30 days may be reduced in emergencies or upon stipulation of all parties. One practical effect of this bill is that instead of allowing a proposed decision to be held or put over prior to it being set for hearing, every proposed decision will have to be calendared 30 days in advance to allow the vote to hold over the proposed decision to take place. This process may slow, rather than speed up, final resolution of cases. 5)Speed vs. Quality . There's little dispute that quicker processing of cases by the CPUC is a virtue if it doesn't degrade the quality of the decisions. It's not clear how requiring commissioners to vote to extend deadlines will accomplish the goal of getting the CPUC to make speedier decisions on complex issues. ASSEMBLY VOTES Assembly Floor (71-0) Assembly Appropriations Committee (21-0) Assembly Utilities and Commerce Committee (15-0) POSITIONS Sponsor: Author Support: None on file Oppose: None on file Randy Chinn AB 2490 Analysis Hearing Date: June 25, 2002