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 FN: 0011739