BILL ANALYSIS
SB 521
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Date of Hearing: June 16, 2003
ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
Sarah Reyes, Chair
SB 521 (Bowen) - As Amended: April 1, 2003
SENATE VOTE : 39-0
SUBJECT : Public Utilities Commission: customers.
SUMMARY : Increase representation of small business interests at
the California Public Utilities Commission (PUC). Specifically,
this bill :
1)Allows organizations that represent small business customers
who receive bundled electric service to receive intervenor
compensation to cover the reasonable costs of participation in
a proceeding at PUC.
2)Precludes any party representing small business customers from
receiving intervenor compensation if they have a conflict of
interest arising from prior representation before PUC.
3)Requires the Office of Ratepayer Advocates (ORA) to primarily
consider the interest of residential and small business
customers in proceedings involving issues of revenue
allocation or rate design.
EXISTING LAW :
1)Provides for compensation for reasonable expenses incurred in
participating in a proceeding at PUC by public utility
customers, representatives of a customer, or any
representative of an organization that represents the
interests of residential customers if:
a) The party as made a substantial contribution to PUC's
decision, and
b) Participation in the proceeding without the award of
costs imposes a significant hardship.
2)Establishes ORA with the duty to represent the interests of
all public utility customers in proceedings PUC.
SB 521
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FISCAL EFFECT : Unknown.
COMMENTS :
Intervenor Fees
PUC processes most proceedings much like a court, relying on
judges, attorneys, and expert witnesses before making decisions.
Most proceedings require public hearings to be held with
written and oral testimony, as well as opportunities for cross
examination. Opening and reply briefs are filed, draft
decisions are issued, comments are received from parties, and
final decisions issued. Participation in these cases can be
complicated, time consuming, and relatively expensive.
To encourage participation in PUC proceedings, current statute
provides that customers may be compensated for their expenses
related to contributions to PUC decisions via the intervenor
program. Compensation is allowed if PUC finds the participant
substantially contributed to the PUC's decision and the
participant could not otherwise afford to take part without
undue hardship. Any intervenor compensation ordered by PUC is
to be paid by the public utility which is subject to a hearing
and in the case of electric utilities will ultimately be
included in consumer rates.
These statutory provisions allow for compensation to actual
utility customers, representatives of those customers, or groups
organized to represent residential customer interest. This bill
additionally authorizes organizations that represent small
commercial customers who receive bundled electric service to
receive intervenor compensation.
Why only small businesses that receive bundled service?
This bill limits intervenor composition to organizations
representing small business customers that receive bundled
service, thus the provision excludes business that receive
electricity through other sources such as direct access or self
generation. These customers will have an equal interest in many
proceedings at PUC but may also be unable to afford
representation without intervenor compensation. The committee
may wish to consider amendments to allow for intervenor
compensation to organizations representing all small business
customers.
SB 521
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Office of Ratepayer Advocates
ORA was created as part of PUC, but its director is separately
appointed by the Governor and confirmed by the Senate. ORA is
statutorily required to represent the interests of all
ratepayers in every substantial PUC proceeding.
In many cases ORA is able to represent the interest of all
ratepayers without conflict, but in some cases there are
conflicts between the interest of various ratepayers. For
example, once the amount of money a particular utility is
entitled to receive is determined, PUC has to decide how to
apportion that requirement between customers. In these cases,
residential, small business, and industrial customers will each
want the others to bear the burden. As a matter of practice in
these types of cases, ORA has advocated for residential
customers.
According to the author's office, industrial customers have been
reasonably successful at communicating their concerns to PUC.
Residential customers are well represented by ORA and other
intervening parties. However, small business customers haven't
been particularly well heard. ORA does not focus on them and
small business groups generally don't participate at PUC.
The provisions in this bill requiring ORA to primarily consider
the interest of residential and small commercial customers are
intended to assure that the small businesses are adequately
represented by ORA.
Technical Amendment
Language in this bill is unclear as to if the intent is to allow
eligibility for intervenor fees to small commercial customers or
to groups that represent small commercial customers. This
provision should be clarified.
REGISTERED SUPPORT / OPPOSITION :
Support
SB 521
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California Small Business Association
Opposition
Sempra Energy (unless Amended)
California Manufactures and Technology Association (unless
amended)
Analysis Prepared by : Edward Randolph / U. & C. / (916)
319-2083