BILL ANALYSIS Ó SB 48 Page 1 Date of Hearing: July 15, 2015 ASSEMBLY COMMITTEE ON APPROPRIATIONS Jimmy Gomez, Chair SB 48 (Hill) - As Amended July 7, 2015 ----------------------------------------------------------------- |Policy |Utilities and Commerce |Vote:|14 - 0 | |Committee: | | | | | | | | | | | | | | |-------------+-------------------------------+-----+-------------| | | | | | | | | | | | | | | | |-------------+-------------------------------+-----+-------------| | | | | | | | | | | | | | | | ----------------------------------------------------------------- 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: SB 48 Page 2 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 SB 48 Page 3 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 SB 48 Page 4 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, SB 48 Page 5 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. SB 48 Page 6 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