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