BILL ANALYSIS                                                                                                                                                                                                              1
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                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

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                                      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