BILL ANALYSIS                                                                                                                                                                                                    



                                                                       


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          |SENATE RULES COMMITTEE            |                  AB 1735|
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                                 THIRD READING


          Bill No:  AB 1735
          Author:   Assembly Utilities and Commerce Committee
          Amended:  8/18/03 in Senate
          Vote:     21

           
           SENATE ENERGY, U.&C. COMMITTEE  :  6-0, 7/8/03
          AYES:  Bowen, Alarcon, Dunn, McClintock, Murray,  
            Vasconcellos
          NO VOTE RECORDED:  Morrow, Battin, Sher

           SENATE APPROPRIATIONS COMMITTEE  :  Senate Rule 28.8

           ASSEMBLY FLOOR  :  79-0, 6/3/03 - See last page for vote


           SUBJECT  :    State Public Utilities Commission:  ratesetting  
          and quasi-
                         legislative cases

           SOURCE  :     Author


           DIGEST  :    This bill requires the State Public Utilities  
          Commission to resolve all ratesetting and quasi-legislative  
          cases within 18 months of the date of filing, as specified.

           ANALYSIS  :    Current law requires the State Public  
          Utilities Commission (PUC) 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 PUC orders the deadline  
          extended.  Under current law, it's the intent of the  
          Legislature that all other proceedings be completed within  
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          18 months.

          Current law requires the PUC to annually publish a work  
          plan describing the scheduled decisions in the coming year.
           
           Current law requires the PUC to annually report on the  
          number of cases where resolution exceeded the time  
          prescribed in the scoping memos and the number of days that  
          commissioners presided in hearings.

          This bill requires quasi-legislative and ratesetting cases  
          to be resolved within 18 months of the date the scoping  
          memo is issued, unless the PUC makes a written  
          determination that the deadline cannot be met and issues an  
          order extending the deadline.  No single order may extend  
          the deadline for more than 60 days.

          This bill includes language that allows the PUC to exceed  
          the 18-month timeframe if the scoping memo for the case  
          explains why a longer timeframe is required, and the  
          commissioner assigned to the case agrees.

          This bill requires the President of the PUC to annually  
          appear before the appropriate policy committees of the  
          Senate and Assembly to report on the PUC's work plan for  
          the coming year, the timeliness with which the PUC  
          completed its work in the prior year, and the number of  
          days commissioners presided in hearings.
           
          Background
           
          In the mid-1990's there was a concern that the PUC was an  
          unaccountable body whose decisions were staff-driven and  
          made on a deadline of the PUC'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 PUC'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.








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          Prior to starting any case, the PUC 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 PUC can extend the  
          deadline if necessary.  Quasi-legislative and ratesetting  
          cases do not 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 that PUC  
          commissioners be more directly involved in the PUC's  
          decisions, and encouraged the timely resolution of cases.   
          It required the PUC to annually report to the Legislature  
          on the number of cases that took too long to resolve and  
          the number of days commissioners presided in hearings.  
           
          Comments
          
           This bill codifies the intent of the Legislature  
          established in SB 960 with regard to the speed with which  
          the PUC must resolve a case.  The 18-month deadline isn't  
          an absolute deadline, because the PUC can extend it if it  
          articulates the reasons for an extension 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 PUC must subsequently examine the  
          record, issue a proposed decision, issue alternate  
          decisions, and vote.  This might not be such a chore if the  
          PUC was processing one case at a time, but typically the  
          PUC has dozens, if not hundreds, of cases of varying  
          complexity open at any one time.  Some PUC 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.

          The PUC is already required to issue a report to the  
          Legislature on the number of cases that took too long to  
          resolve, the number of days commissioners presided in  
          hearings, what the commission did in the prior year, and  







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          what it intends to do in the following year.  This bill  
          requires the PUC President to deliver that report in person  
          to the relevant Senate and Assembly policy committees.

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  Yes    
          Local:  No

           SUPPORT  :   (Verified  8/18/03)

          State Public Utilities Commission
          Pacific Gas and Electric Company
          SBC


           ASSEMBLY FLOOR  : 
          AYES:  Aghazarian, Bates, Benoit, Berg, Bermudez, Bogh,  
            Calderon, Campbell, Canciamilla, Chan, Chavez, Chu,  
            Cogdill, Cohn, Corbett, Correa, Cox, Daucher, Diaz,  
            Dutra, Dutton, Dymally, Firebaugh, Frommer, Garcia,  
            Goldberg, Hancock, Harman, Haynes, Jerome Horton, Shirley  
            Horton, Houston, Jackson, Keene, Kehoe, La Malfa, La  
            Suer, Laird, Leno, Leslie, Levine, Lieber, Liu,  
            Longville, Lowenthal, Maddox, Maldonado, Matthews, Maze,  
            McCarthy, Montanez, Mountjoy, Mullin, Nakanishi, Nakano,  
            Nation, Negrete McLeod, Nunez, Oropeza, Pacheco, Parra,  
            Pavley, Plescia, Reyes, Richman, Ridley-Thomas, Runner,  
            Salinas, Samuelian, Simitian, Spitzer, Steinberg,  
            Strickland, Vargas, Wiggins, Wolk, Wyland, Yee, Wesson


          NC:mel  8/19/03   Senate Floor Analyses 

                         SUPPORT/OPPOSITION:  SEE ABOVE

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