BILL ANALYSIS                                                                                                                                                                                                    



                                                                  SB 608
                                                                  Page  1


          SENATE THIRD READING
          SB 608 (Escutia)
          As Amended July 1, 2005
          Majority vote 

           SENATE VOTE  :27-12  
           
           UTILITIES & COMMERCE     7-3    APPROPRIATIONS      13-5        
           
           ----------------------------------------------------------------- 
          |Ayes:|Levine, Baca, Blakeslee,  |Ayes:|Chu, Bass, Berg,          |
          |     |               De La      |     |Calderon, Karnette,       |
          |     |Torre, Montanez,          |     |Klehs, Leno, Nation,      |
          |     |      Ridley-Thomas,      |     |Oropeza, Laird, Saldana,  |
          |     |Wyland                    |     |Lee, Mullin               |
          |     |                          |     |                          |
          |-----+--------------------------+-----+--------------------------|
          |Nays:|Bogh, Calderon, Keene     |Nays:|Sharon Runner, Emmerson,  |
          |     |                          |     |Haynes, Nakanishi,        |
          |     |                          |     |Walters                   |
           ----------------------------------------------------------------- 
           
          SUMMARY  :  Expands and clarifies the role of the Office of the  
          Ratepayer Advocates (ORA), within the California Public  
          Utilities Commission (PUC).  Specifically,  this bill  :   

          1)Changes the name of the Office of Ratepayer Advocates to the  
            Division of Ratepayer Advocates (DRA).

          2)Makes the DRA Director a position that serves for a set  
            six-year term.

          3)Requires the DRA Director to develop the DRA budget, subject  
            to PUC approval.

          4)Authorizes the DRA Director to appoint a lead attorney, who  
            serves at the pleasure of the Director, to represent DRA.

          5)Clarifies that PUC must provide DRA with sufficient legal  
            support to ensure that customers' interests are effectively  
            represented.

          6)Expands PUC's public outreach program by requiring the  
            commission to publicize programs that encourage participation  








                                                                  SB 608
                                                                  Page  2


            in proceedings.

           EXISTING LAW  :

          1)Establishes ORA at PUC to represent the interests of public  
            utility customers and subscribers at all significant  
            proceedings at PUC.  The ORA Director is a pleasure  
            appointment of the Governor, subject to Senate confirmation.

          2)Establishes within PUC an Office of the Public Adviser to  
            assist the public who desire to testify or present information  
            to PUC.


           FISCAL EFFECT  :  Ongoing special fund costs of $147,000 for the  
          lead attorney position. 

           COMMENTS  :  In 1996, the Legislature created ORA to represent  
          consumer interests at PUC (SB 960 (Leonard), Chapter 856,  
          Statutes of 1996).  This legislation formalized an  
          organizational structure created by PUC that established a  
          consumer advocacy function separate from PUC's decision-making  
          apparatus.  The Legislature strengthened the consumer advocacy  
          function by making the ORA Director a Governor's appointment and  
          dealt with conflict of interest concerns by requiring the  
          creation of appropriate rules.

          Concerns have been raised about shortcomings in the statutes  
          which could limit ORA's effectiveness.  Those concerns include  
          ORA's lack of a separate budget and spending authority and ORA's  
          requirement to use PUC Legal Division's attorneys, which can  
          compromise the ORA's representations.  

          This bill attempts to strengthen ORA by giving the ORA Director  
          more control over the resources necessary to perform the work.   
          Currently, ORA's budget is included within the utility  
          regulation allocation of the entire PUC budget.  As such, PUC  
          possesses some flexibility to redirect resources toward other  
          utility oversight programs, such as utility safety and market  
          monitoring.  The supporters of this bill believe that this  
          flexibility has allowed PUC to transfer resources away from ORA  
          to other programs and PUC, leaving ORA with insufficient  
          resources. 









                                                                  SB 608
                                                                  Page  3


          This bill attempts to address ORA's budgeting problem by:  1)  
          requiring the ORA Director to develop a budget for the division  
          subject to final approval by PUC; 2) requiring PUC to assign  
          personnel to ORA; and, 3) creating a separate PUC Ratepayer  
          Advocate Account in the General Fund.

          Currently, ORA is represented by lawyers who serve under PUC's  
          General Counsel in PUC's legal division, who in turn report to  
          the PUC President.  This means that ORA attorneys may actually  
          have conflicts of interest as they report to both the PUC's  
          General Counsel and to an entity that represents ratepayer  
          interests in front of PUC itself.  This bill attempts to resolve  
          that conflict by authorizing the ORA Director to appoint an  
          attorney to represent ORA who reports to the Director and serves  
          at the pleasure of the Director. 


           Analysis Prepared by  :    Edward Randolph / U. & C. / (916)  
          319-2083 


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