Amended in Senate August 18, 2015

Amended in Assembly April 30, 2015

Amended in Assembly March 24, 2015

California Legislature—2015–16 Regular Session

Assembly Bill No. 853

Introduced by Assembly Member Roger Hernández

February 26, 2015

An act to add Section 764 to the Public Utilities Code, relating to energy.

LEGISLATIVE COUNSEL’S DIGEST

AB 853, as amended, Roger Hernández. Electrical and gas corporations: security of plant and facilities.

Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including electrical corporations and gas corporations, as defined. If the commission finds after a hearing that the rules, practices, equipment, appliances, facilities, or service of any public utility, or of the methods of manufacture, distribution, transmission, storage, or supply employed by the public utility, are unjust, unreasonable, unsafe, improper, inadequate, or insufficient, the Public Utilities Act requires that the commission determine and, by order or rule, fix the rules, practices, equipment, appliances, facilities, service, or methods to be observed, furnished, constructed, enforced, or employed. The Public Utilities Act requires the commission to prescribe rules for the performance of any service or the furnishing of any commodity of the character furnished or supplied by any public utility and, on proper demand and tender of rates, require the public utility to furnish the commodity or render the service within the time and upon the conditions provided in the rules adopted by the commission.

This bill begin delete would, to the extent feasible, end delete begin insert would end insert require an electrical corporation or gas corporation to utilize direct employees, as defined, for any work associated with the design, engineering, and operation of its nuclear, electrical, and gas infrastructure, including all computer and information technology systems, unless the utility files begin delete a Tier 3 advice letter with the commission that demonstrates end delete begin insert a request to employ persons that are not direct employees end insert begin insert with the commission end insert begin insert an application in the utility’s general rate case. The bill would require that the request be a separate stand-alone section that is not embedded in the general requested staffing change proposals. The bill would require the utility to demonstrate end insert that the work can be performed safely and securely, and without jeopardizing the security of its nuclear, electrical, and gas infrastructure, by persons that are not direct employees. The bill would require the commission to begin delete open a proceeding, or expand the scope of an existing proceeding, to evaluate the advice letter and to hold not less than one duly noticed public hearing for the proceeding. end delete begin insert evaluate the utility’s proposal to utilize persons that are not direct employees end insert begin insert . end insert The bill would require the commission to issue a written begin delete decision end delete begin insert decision, as part of the general rate case proceeding, end insert determining whether the electrical corporation or gas corporation may utilize persons that are not direct employees for the described work.

Under existing law, a violation of the Public Utilities Act or any order, decision, rule, direction, demand, or requirement of the commission is a crime.

Because the provisions of this bill would be a part of the act and because a violation of an order or decision of the commission implementing its requirements would be a crime, the bill would impose a state-mandated local program by creating a new crime.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.

The people of the State of California do enact as follows:

SECTION 1.  

Section 764 is added to the Public Utilities Code,
to read:

764.  

(a) The Legislature finds and declares all of the following:

(1) Protecting the security of nuclear, electrical, and natural gas
utility systems is a paramount state interest.

(2) Protecting the privacy of ratepayers’ personal information,
including usage information, is a paramount state interest.

(3) Recent intrusions into major corporate computer systems,
including Sony and Anthem Blue Cross, and the theft of
information from those systems have demonstrated the
vulnerability of those systems.

(4) The computer systems of California’s electrical corporations
and gas corporations have information about the design,
engineering, and operation of the nuclear, electrical, and natural
gas utility infrastructure, as well as personal information about
California ratepayers. This information could be used to
compromise the security of California’s utility infrastructure and
the privacy of California’s ratepayers.

(5) Widespread deployment of smart meters, smart grid
equipment, and microgrids increases the importance of protecting
the computer systems of electrical corporations and gas
corporations.

(6) The part of any computer system that is most vulnerable to
being compromised is the personnel who operate that system.

(7) Electrical corporations and gas corporations should make
every reasonable effort to protect their computer systems from
unauthorized intrusions.

(8) To protect the security of electrical and natural gas utility
computer systems, including nuclear infrastructure, the information
technology personnel who operate those systems should be direct
employees of the electrical corporation or gas corporation.

(9) To protect the security of nuclear, electrical, and gas utility
infrastructure, the design, engineering, and operation of that
infrastructure should, to the extent feasible, be performed by direct
employees of the electrical corporation or gas corporation.

(b) For purposes of this section, “direct employees” for
construction or maintenance work include the employees of a
contractor or subcontractor licensed in California and working
under the direct supervision of the electrical corporation or gas
corporation.

(c)  begin delete To the extent feasible, an end delete begin insert An end insert electrical corporation or gas
corporation shall utilize direct employees for any work associated
with the design, engineering, and operation of its nuclear, electrical,
and gas infrastructure, including all computer and information
technology systems, unless the utility complies with the
requirements of this section and obtains the approval of the
commission pursuant to this section.

(d) Before utilizing persons that are not direct employees for
work associated with the design, engineering, and operation of its
nuclear, electrical, and gas infrastructure, including all computer
and information technology systems, an electrical corporation or
gas corporation shall file begin delete a Tier 3 advice letter with the commission
that demonstrates end delete begin insert a request to employ persons that are not direct
employees with the commission, as part of the utility’s general
rate case application. The request shall be a separate stand-alone
section that is not embedded in the general requested staffing
change proposals. The utility shall demonstrate end insert that the work can
be performed safely and securely, and without jeopardizing the
security of its nuclear, electrical, and gas infrastructure.

(e) The commission shall begin delete open a proceeding, or expand the
scope of an existing proceeding, to evaluate the advice letter. The
commission shall hold not less than one duly noticed public hearing
for the proceeding. The end delete begin insert evaluate the utility’s proposal to utilize
persons that are not direct employees for work associated with the
design, engineering, and operation of its nuclear, electrical, and
gas infrastructure, including all computer and information
technology systems. end insert

begin insert (f) end insert begin insert   end insert begin insert The end insert commission shall issue a written decision begin insert as part of the
general rate case proceeding end insert determining whether the electrical
corporation or gas corporation may utilize persons that are not
direct employees for the described work.

begin delete

(f)

end delete

begin insert (g) end insert  A person or corporation owning or operating a qualifying
facility pursuant to federal law or a facility that is an exempt
wholesale generator is not an electrical corporation due to the
ownership or operation of that facility. This subdivision is
declaratory of existing law.

SEC. 2.  

No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of
the Government Code, or changes the definition of a crime within
the meaning of Section 6 of Article XIII B of the California
Constitution.