BILL ANALYSIS 1 1 SENATE ENERGY, UTILITIES AND COMMUNICATIONS COMMITTEE DEBRA BOWEN, CHAIRWOMAN AB 1735 - Utilities & Commerce Hearing Date: June 24, 2003 A As Amended: May 28, 2003 FISCAL B 1 7 3 5 DESCRIPTION Current law requires the California Public Utilities Commission (CPUC) to assign its cases into one of three categories: adjudication, quasi-legislative, and ratesetting. Adjudications are required to be completed within 12 months, unless the CPUC orders the deadline extended. Under current law, it's the intent of the Legislature that all other proceedings be completed within 18 months. This bill requires quasi-legislative and ratesetting cases to be resolved within 18 months of the date of filing, unless the CPUC makes a written determination that the deadline cannot be met and issues an order extending the deadline. BACKGROUND In the mid-1990's, there was increasing concern that the CPUC was an unaccountable body whose decisions were staff-driven and made on a deadline of the CPUC's own choosing without regard for the need for expeditiousness. In 1996, the Governor signed SB 960 (Leonard), Chapter 856, Statutes of 1996, which revised the CPUC's processes by establishing three types of cases -- adjudicatory cases, such as enforcement and complaint cases; quasi-legislative cases, where policies are established; and ratesetting cases, where rates are established -- and creating specific processing rules for each type of case. Prior to starting any case, the CPUC is required to hold a hearing establishing the type of case, the issues to be considered, and the timetable for resolution, which are all contained in a scoping memo. Adjudicatory cases are to be resolved within 12 months, though the CPUC can extend the deadline if necessary. Quasi-legislative and ratesetting cases don't have firm resolution deadlines established, though the intent of the Legislature is that those cases be resolved within 18 months. SB 960 also declared the intent of the Legislature to ensure that the CPUC commissioners are more directly involved in the CPUC's decisions, and encouraged the timely resolution of cases. It required the CPUC to annually report to the Legislature on the number of cases that took too long to resolve and the number of days that commissioners presided in hearings. COMMENTS 1.We Don't Just Intend It, We Mean It . This bill codifies the intent of the Legislature established in SB 960 with regard to the speed with which the CPUC must resolve a case. The 18-month deadline isn't an absolute deadline, because the CPUC can extend it if it articulates the reasons why it wants to extend it and issues an order, just as it can now do for adjudicatory cases. While 18 months seems like a long time, resolving a case can be a complicated matter. The parties must go through a discovery process, formulate a case, prepare testimony, present witnesses and cross-examine opposing witnesses, and brief the case, while the CPUC must subsequently examine the record, issue a proposed decision, issue alternate decisions, and vote. This might not be such a chore if the CPUC was processing one case at a time, but typically the CPUC has dozens, if not hundreds, of cases of varying complexity open at any one time. Some CPUC cases extend for several years as the issues are dealt with in phases, with the character of the second phase dependent on the outcome of the first. This bill refers to the resolution of a case within 18 months of the date of filing. The author and committee may wish to consider making this more precise by requiring instead that the CPUC resolve the issues raised in the scoping memo within 18 months of the date of issuance of the scoping memo. The CPUC has suggested allowing it to establish deadlines of greater than 18 months in the scoping memo. The author and committee may wish to consider the benefit of such an amendment, which would give parties fair warning at the front of the process that the case will take longer than 18 months. Absent such an ability, parties would have to wait until the end of the 18 month process before the CPUC would be allowed to make a finding that it needs more time. 2.Is That Report Card Signed? SB 960 tried to encourage more timely resolution of CPUC cases by moral suasion, statements of legislative intent, and an uncodified requirement that it provide the Legislature with an annual report card on the timeliness of its decision-making. The author and committee may wish to consider codifying the report card requirement and requiring the CPUC President to come before the respective policy committees of the Senate and Assembly each year to present the report card. ASSEMBLY VOTES Assembly Floor (79-0) Assembly Appropriations Committee (25-0) Assembly Utilities and Commerce Committee (13-0) POSITIONS Sponsor: Author Support: SBC Oppose: None on file Randy Chinn AB 1735 Analysis Hearing Date: June 24, 2003