BILL ANALYSIS                                                                                                                                                                                                    



                                                                      SB 48  


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          Date of Hearing:  July 15, 2015


                        ASSEMBLY COMMITTEE ON APPROPRIATIONS


                                 Jimmy Gomez, Chair


          SB 48  
          (Hill) - As Amended July 7, 2015


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          Urgency:  No  State Mandated Local Program:  NoReimbursable:  No


          SUMMARY:


          This bill makes numerous changes to the operation and governance  
          of the California Public Utilities Commission (PUC).   
          Specifically, this bill:









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          1)Repeals the President of the PUC's authority to direct the  
            executive director, the attorney and other commission staff.  
            Makes related conforming changes.


          2)Requires the PUC to hold at least six sessions each year in  
            Sacramento.


          3)Requires the PUC to publish and include all written testimony  
            in proceeding docket cards.  Requires the PUC to post  
            information on the Internet regarding how the public can  
            access the ratemaking process, the role of the Office of the  
            Public Advisor, and how the Office can be of assistance.


          4)Expands reporting requirements to include specified  
            information regarding the details of PUC cases and  
            proceedings, and requires the PUC President to report on the  
            timeliness of resolving cases annually before the appropriate  
            legislative policy committees. 


          5)Expands the reporting requirements of the PUC's annual  
            workplan to include, among other things, performance criteria  
            for the PUC and its executive director as well as an annual  
            evaluation of the executive director based on the performance  
            criteria.   


          6)Subjects the PUC's adjudication proceedings to the  
            Administrative Adjudication Code of Ethics.


          7)With the exception of adjudicated proceedings, requires the  
            PUC to seek and engage the views of those likely to be  
            affected by a decision or proceeding, as specified. Requires  
            the PUC to annually publish and update its outreach  








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            activities.


          8)Provides that actions to enforce the PUC's process for  
            handling and determining disclosable public records, as well  
            as actions to enforce Bagley-Keene Open Meetings Act  
            requirements, may be taken to the superior court.


          9)Makes various legislative findings regarding the judicial  
            review provisions of the Bagley-Keene Open Meetings Act.


          


          FISCAL EFFECT:


          1)Significant one-time information technology upgrades,  
            including contracting, systems development, staffing and  
            implementation costs of approximately $7.5 million (Public  
            Utilities Reimbursement Account) to fulfill the public  
            information requirements of the bill. 


          2)Ongoing annual costs of approximately $1.7 million (Public  
            Utilities Reimbursement Account) to maintain and operate the  
            new information technology systems.


          3)One-time costs of $120,000 a year for two years for a  
            proceeding to establish rules for outreach, and ongoing costs  
            of up to $400,000 per year (Public Utilities Reimbursement  
            Account) to seek the views of interested persons.


          4)Ongoing annual legal costs of approximately $335,000 for the  
            workload associated with superior court reviews of  








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            Bagley-Keene Open Meeting and Public Records Acts enforcement  
            actions.


          5)Ongoing annual costs of up to $120,000 (Public Utilities  
            Reimbursement Account) to hold at least six meetings in  
            Sacramento instead of San Francisco.  This includes the costs  
            of meetings sites, equipment and staff travel.




          6)Potential increased annual costs in the range of tens of  
            thousands of dollars to the low hundreds of thousands of  
            dollars (Public Utilities Reimbursement Account) for  
            additional meetings in order for the Commission, rather than  
            the President, to direct the executive director, attorney and  
            staff.


          7)Ongoing annual costs of $35,000 (Public Utilities  
            Reimbursement Account) for increased reporting requirements.


          COMMENTS:


          1)Purpose.  According to the author, this bill will reform the  
            PUC's governing structure by clearly identifying the roles and  
            responsibilities of Commissioners and staff, and will require  
            PUC to reach out to communities affected by regulatory  
            decisions instead of only regulated utilities.


          2)Background.  The PUC is established in the California  
            Constitution and is governed by five full-time commissioners,  
            appointed by the governor and confirmed by the Senate.  It is  
            staffed by approximately 1,000 individuals who, together,  
            regulate privately owned electric, natural gas,  








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            telecommunications, water, railroad, rail transit, and  
            passenger transportation companies.  Staff includes four  
            personal advisors to each Commissioner, except five to the  
            president, as well as the 42 judges of the Administrative Law  
            Division - attorneys, engineers and accountants who prepare  
            the docket for all official filings, including maintenance of  
            the official record of proceedings.


            The PUC is subject to the Bagley-Keene Open Meetings Act,  
            which requires a state body to take actions only at a public  
            meeting following the public posting of an agenda describing  
            the item for proposed action at least 10 days prior to the  
            meeting. Any private congregation of a majority of the members  
            of a state body at the same time and place to hear, discuss,  
            or deliberate upon any item that is within its jurisdiction is  
            unlawful. However, only the Supreme Court and the court of  
            appeal have the jurisdiction over any order or decision of the  
            PUC, including Bagley-Keene Open meeting requirements. 


          3)PUC Deficiencies.  The PUC has recently undergone a number of  
            audits related to its budget, transportation program, natural  
            gas pipeline safety program, and other internal functions.   
            The audit findings raised questions regarding the PUC's  
            ability to manage its core functions.  An audit by the State  
            Auditor in March of 2014 found the Commission lacks adequate  
            process for the sufficient oversight of utility balancing  
            accounts to protect ratepayers from unfair rate increases.



            A recent report commissioned by the PUC found ex parte  
            communications to be frequent, pervasive, and at least  
            sometimes outcome-determinative in ratesetting cases.  












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            This bill addresses audit findings of mismanagement of public  
            funds, poor safety oversight, ex-parte communication  
            violations, and failed governance.





          Analysis Prepared by:Jennifer Galehouse / APPR. / (916)  
          319-2081