BILL ANALYSIS                                                                                                                                                                                                    



                                                                      SB 48


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          SENATE THIRD READING


          SB  
          48 (Hill)


          As Amended  September 9, 2015


          Majority vote


          SENATE VOTE:  39-0


           -------------------------------------------------------------------- 
          |Committee       |Votes|Ayes                   |Noes                 |
          |                |     |                       |                     |
          |                |     |                       |                     |
          |                |     |                       |                     |
          |----------------+-----+-----------------------+---------------------|
          |Utilities       |14-0 |Rendon, Patterson,     |                     |
          |                |     |Achadjian, Bonilla,    |                     |
          |                |     |Burke, Dahle, Eggman,  |                     |
          |                |     |Cristina Garcia,       |                     |
          |                |     |Hadley, Obernolte,     |                     |
          |                |     |Quirk, Santiago, Ting, |                     |
          |                |     |Williams               |                     |
          |                |     |                       |                     |
          |----------------+-----+-----------------------+---------------------|
          |Appropriations  |17-0 |Gomez, Bigelow, Bloom, |                     |
          |                |     |Bonta, Calderon,       |                     |
          |                |     |Chang, Nazarian,       |                     |
          |                |     |Eggman, Gallagher,     |                     |
          |                |     |                       |                     |
          |                |     |                       |                     |
          |                |     |Eduardo Garcia,        |                     |
          |                |     |Holden, Jones, Quirk,  |                     |








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          |                |     |Rendon, Wagner, Weber, |                     |
          |                |     |Wood                   |                     |
          |                |     |                       |                     |
          |                |     |                       |                     |
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          SUMMARY:  Proposes a suite of reforms on the governance and  
          operations of the California Public Utilities Commission (CPUC).  
           Specifically, this bill:


          1)Requires the CPUC to hold at least six commission sessions  
            each year in Sacramento.


          2)Requires the CPUC to publish and include all written testimony  
            in proceeding docket cards.  Requires the CPUC 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 of the Public Advisor can  
            be of assistance.


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


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


          5)Subjects the CPUC's adjudication proceedings to the  








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            Administrative Adjudication Code of Ethics.


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


          7)Provides that actions to enforce the CPUC'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.


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


          9)Makes other technical and clarifying changes to address  
            chaptering out conflicts.


          FISCAL EFFECT:  According to the Assembly Appropriations  
          Committee, this bill would have the following costs:


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


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


          3)One-time costs of $120,000 a year for two years for a  








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            proceeding to establish rules for outreach, and ongoing costs  
            of up to $400,000 per year 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  
            Bagley-Keene Open Meeting and Public Records Acts enforcement  
            actions.


          5)Ongoing annual costs of up to $120,000 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 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 for increased reporting  
            requirements.


          COMMENTS:


          1)Author's Statement:  "Recent scandals at the [CPUC] have  
            highlighted the need for more visibility in the interactions  
            between Commissioners and regulated utilities, and a series of  
            embarrassing audits of the CPUC's mismanagement of public  
            funds and poor safety oversight point toward poor management  
            of the organization.  SB 48 would reform the CPUC's governance  








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            structure, more clearly outlining the roles and  
            responsibilities of Commissioners and staff, and require the  
            CPUC to reach out to communities affected by CPUC decisions  
            instead of only the regulated utilities."
          2)Background:  California Constitution Article XII establishes  
            the CPUC, and grants it the authority to regulate public  
            utilities.  The CPUC is governed by five full-time  
            commissioners appointed by the Governor and confirmed by the  
            State Senate.  Commissioners are appointed for six-year terms  
            and can only be removed by the Legislature.  Beginning in  
            2014, Pacific Gas and Electric began releasing over 65,000  
            emails from a five-year period between utility executives and  
            CPUC officials.  The emails revealed discussions on subjects  
            the CPUC was deliberating within a number of proceedings, many  
            of which arguably violated CPUC's rules governing ex parte  
            communications, including emails pertaining to the selection  
            of administrative law judges for ratesetting cases.   


             This bill makes changes to the operation and governance of the  
            CPUC, including requiring the CPUC to hold at least six  
            sessions each year in Sacramento.


          3)Bagley-Keene Open Meeting Act:  The CPUC is subject to the  
            Bagley-Keene Open Meeting Act, which requires state entities  
            take "action" only at a public meeting following public  
            posting of an agenda describing the item for proposed action.   
            Any private gathering 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. 


            This bill provides that actions to enforce the Bagley-Keene  
            Open Meeting Act and the CPUC's process for disclosing public  
            records may be taken to the superior court.  This bill also  
            makes various legislative findings regarding the judicial  
            review provisions of the Bagley-Keene Open Meeting Act.








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          4)CPUC's Internal Deficiencies:  The CPUC has recently undergone  
            a number of audits related to its budget, transportation  
            program, natural gas pipeline safety program, among other  
            internal functions.  The findings of these audits have raised  
            questions about the CPUC's ability to manage even some of its  
            core functions.  In March 2014, an audit by the State Auditor  
            found that "the commission lacks adequate process for  
            sufficient oversight of utility balancing accounts to protect  
            ratepayers from unfair rate increases."


            This bill makes various changes to the CPUC to promote greater  
            transparency, including expanding reporting requirements  
            regarding cases, proceedings, and its annual workplan, as  
            specified.  This bill also requires the CPUC to promote  
            greater public involvement by publishing information online  
            and engaging in outreach activities, as specified.




          Analysis Prepared by:                                             
                          Edmond Cheung / U. & C. / (916) 319-2083  FN:  
          0002338