BILL ANALYSIS
SB 201
Page 1
SENATE THIRD READING
SB 201 (Speier)
As Amended July 19, 2001
Majority vote
SENATE VOTE :27-10
UTILITIES AND COMMERCE 11-6 APPROPRIATIONS 14-6
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|Ayes:|Wright, Calderon, |Ayes:|Migden, Alquist, Aroner, |
| |Canciamilla, Cardenas, | |Cedillo, Corbett, Correa, |
| |Diaz, Jackson, Nation, | |Goldberg, Papan, Pavley, |
| |Papan, Reyes, Simitian, | |Simitian, Thomson, |
| |Wesson | |Washington, Wiggins, |
| | | |Wright |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Pescetti, Bill Campbell, |Nays:|Bates, Ashburn, Daucher, |
| |John Campbell, La Suer, | |Robert Pacheco, Runner |
| |Leonard, Maddox | |Zettel |
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SUMMARY : Deletes the repeal of the provisions in the Public
Utilities Code (PU Code) that provide for an independent
division within the California Public Utilities Commission
(CPUC) chartered with representing public utility consumers in
CPUC proceedings.
Specifically, this bill :
1)Removes the January 1, 2002 sunset date of PU Code Section
309.5 and retains the independent Office of Ratepayer
Advocates (ORA) beyond that date.
2)Provides additional conditions upon ORA in discovery matters
by requiring that any discovery dispute be decided by the
President of CPUC or an assigned commissioner in writing, and
requiring that the division agree to meet and confer with a
regulated entity prior to filing a complaint at CPUC.
EXISTING LAW provides for an independent consumer representative
within CPUC consisting of and chartered with:
1)A director appointed by the Governor.
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2)Assignment of personnel to the division sufficient to ensure
that customer and subscriber interests are fairly represented
in all significant proceedings.
3)Separation of advocacy personnel from any advisory role to any
decision maker on the same case or proceeding.
4)Discovery rights inclusive of the division's ability to compel
the production or disclosure of any information it deems
necessary to perform its duties from entities regulated by
CPUC, with a resolution process in place for any objections to
such requests by an assigned commissioner, or in the absence
of a proceeding, by the president of CPUC.
5)A separate budget allocation from that of CPUC to be utilized
exclusively by the division in the performance of its duties.
FISCAL EFFECT : None
COMMENTS : This bill expanded the staffing and funding for ORA
and provided that the Director of ORA have a salary at least
equal to 90% of the salary of the CPUC commissioners. The
Assembly amended these provisions out of this bill.
ORA was created by statute in 1996 and became independent from
CPUC in January of 1997. Up to that time a division existed
within CPUC representing consumer interests, and the division's
budget and personnel were determined by CPUC. It was determined
that a conflict was apparent by having consumer interests
represented by a division of a state agency where there was no
independence. PU Code Section 309.5 provided for ORA's
independence, its separate budget allocation and for the
presumption that staffing should be adequate to fairly represent
consumer interests in CPUC proceedings. The enabling language
also provided ORA with significant discovery rights before CPUC,
but with a check and balance provision in the event that an
entity regulated by CPUC objected to providing responses to
discovery requests. In proceedings with an assigned
commissioner, objections to ORA discovery requests are to be
decided by the assigned commissioner. Where no proceeding is
yet open or prior to assignment of a commissioner, such
objections will be resolved by the president of CPUC according
to the existing statute.
Since 1997, ORA participated in proceedings opened by CPUC, by
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other parties, and in cases, initiated by ORA itself. CPUC has
upheld that, "ORA shall have discovery rights, as do other
parties to the proceeding. It may also rely on Section 309.5
(e)?" (Decision (D.) 01-02-041). PU Code Section 309.5 (e) is
the portion which provides ORA broader rights to compel
production or disclosure of "any information it deems necessary
to perform its duties", subject to review of any objections by
an assigned commissioner or president of CPUC. Finally, PU Code
Section 309.5 carried a sunset date of January 1, 2002, unless
extended by statute. This bill seeks to repeal the sunset and
enhance ORA staffing. There is no opposition to this bill.
In its support letter, California State Employees Association
(CSEA) expresses its concern "with the gradual phasing out of
the Office of Ratepayer Advocates", citing that "Several years
ago this office took the brunt of severe budget cuts and has
never fully recovered." CSEA's letter is particularly cogent,
as absent this legislation, independent consumer representation
disappears at CPUC just as the specter of competition is proving
to be a failure in the energy markets and to be virtually
non-existent in the local telecommunications market in this
state. Many states actively pursue market abuse prevention and
service quality assurances through special consumer advocacy
agencies and California would be left far behind most other
states regarding utility consumer advocacy without ORA's
existence. In Illinois, recent legislation created hundreds of
new positions and a special unit of the Attorney General's
office specifically to handle telecommunications consumer
protection areas (energy consumer protection advocacy already
existed there) in the rate de-regulated environment.
Market changes in California in gas, electricity and
telecommunications have created complex situations for
consumers. There has been a dramatic rise in consumer
complaints about market abuse, poor service quality and lack of
competition for basic services in the telecommunications area.
ORA contributed significantly to a market abuse complaint case
raised in 1998 by Utility Consumer Action Network (UCAN), and in
the presiding officer's decision in that case (C. 98-04-004),
the areas specifically addressed by ORA testimony were upheld.
Subsequently, ORA filed two complaints on its own after initial
investigation, one dealing with a Prompted Repeat Dialing
Service and one dealing with long repair intervals for basic
residential telephone service. In both of these two latter
cases, ORA had to independently conduct discovery over initial
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objections of a regulated utility, and this bill clarifies the
legislative intent regarding the scope of ORA's discovery rights
.
Absent ORA's existing discovery rights, numerous market abuses
and violations of existing law might never have come to light
despite widespread consumer complaint about various
telecommunications services. Virtually all residential and most
small commercial consumers in California are still faced with a
monopoly providing them with their basic telephone service and
with only one utility offering them gas or electric service.
The types of market abuse and service neglect these market
structures can facilitate, render independent consumer
representation a desirable necessity in CPUC proceedings.
While ORA advocates in other ways, it is largely vested with a
responsibility to adequately and fairly represent utility
consumer interests in evidentiary proceedings. This bill
ensures ORA's continued ability to perform such advocacy by
eliminating the sunset provision. This bill seeks to clarify
the legislative intent behind Section 309.5 by eliminating
language that has been interpreted by some entities to limit
ORA's role to open CPUC proceedings. Since CPUC has upheld
ORA's ability to file complaints and initiate proceedings in
various decisions and orders, this change is intended to clarify
the statute to prevent further misinterpretation. This
clarification is similar to that proposed in AB X2 57 (Wiggins)
for Section 11652 of the PU Code relating to municipal utility
district voting requirements, which was also subject to numerous
interpretations.
ORA performs a necessary consumer advocacy role unique by virtue
of its independence and its position as a state office. The
change in regulatory focus from rate-setting to market-based
regulation has demonstrated a need to prevent market abuse and
deteriorated service quality. ORA is uniquely positioned beyond
the interests of consumer groups with stated constituencies and
private funding requirements as an independent state office.
The continuation of ORA's role will provide a much needed
benefit to hard hit utility consumers in this state and the
staff augmentation provided for in this bill will best serve
those long term consumer interests.
Analysis Prepared by : Kelly Boyd / U. & C. / (916) 319-2083
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