BILL ANALYSIS 1 1 SENATE ENERGY, UTILITIES AND COMMUNICATIONS COMMITTEE DEBRA BOWEN, CHAIRWOMAN SB 201 - Speier Hearing Date: April 24, 2001 S As Introduced: February 8, 2001 FISCAL B 2 0 1 DESCRIPTION Current law establishes a division within the California Public Utilities Commission (CPUC) to represent the interests of public utility customers in CPUC proceedings. The director of the division, known as the Office of Ratepayer Advocate (ORA), serves at the pleasure of the Governor and is subject to confirmation by the Senate. The Governor's ability to appoint the ORA director and the specific Ratepayer Advocate Account in the General Fund are scheduled to sunset on January 1, 2002. Current law provides that should the sunset take place, the law would return to the way it read prior to 1997 whereby the CPUC appointed and funded the ORA to represent the interests of utility customers and subscribers in CPUC proceedings. This bill removes the sunset, requires the ORA director to be paid a salary equal to 90% of that received by the CPUC commissioners, and deletes the replacement section of law that would take effect should the sunset actually take place. BACKGROUND ORA is the state-sanctioned representative of consumers at the CPUC and it's required to participate in all significant electric, telecommunications, natural gas, and water cases. In the smallest cases, ORA may provide the only financial analysis of the case, but in larger cases, ORA frequently presents the only comprehensive alternative analysis to the one put forth by the utility. In 1996, concurrent with the electric restructuring effort, the existing ORA was modified to make its director a Governor's appointment and to provide a separate line item within the CPUC budget. The purpose of this change was to ensure ORA accountability. Without this bill, those provisions will sunset, meaning ORA will be returned to its former status and make its director an appointee of the CPUC. Many other consumer groups are represented at the CPUC. In order to encourage participation, state law provides for compensation of costs if that group makes a substantial contribution to the case and participation by that group couldn't occur without significant financial hardship, as determined by the CPUC. COMMENTS 1)Narrow Or Wide Vision? The statute creating ORA has been narrowly read by some utilities to limit its activities to formal proceedings at the CPUC. This is inconsistent with the original purpose for creating ORA, which was to create an advocate for ratepayers and to give that advocate all of the same broad investigatory powers possessed by the CPUC. Should that narrow interpretation prevail, ORA could be barred from investigating issues which could lead to formal proceedings. As such, the author and committee may wish to consider clarifying this by deleting the phrase "in commission proceedings" on Page 2, Line 6. 2)Salary . This bill statutorily sets the salary of the ORA director at 90% of the salary paid to CPUC commissioners. The salary for the President of the CPUC is set by Government Code Section 11553, while the remaining CPUC commissioners have their salary set by Government Code Section 11553.5. Today, the other four CPUC commissioners receive a salary of $114,191 each, while the CPUC President receives a slightly higher (approximately 3%) salary. On March 21, 2001, Regina Ann Birdsall was appointed by the Governor to head the ORA at a salary of $101,220, which is approximately 88.6% of the salary paid to four of the commissioners, but somewhat less than that if one factors in the higher salary paid to the CPUC President. It's not clear why the ORA director's salary should be set in statute. The author and committee may wish to consider deleting this provision, leaving the director's salary in the hands of the Department of Personal Administration. POSITIONS Sponsor: Author Support: None on file Oppose: None on file Randy Chinn SB 201 Analysis Hearing Date: April 24, 2001