BILL ANALYSIS
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|SENATE RULES COMMITTEE | AB 1398|
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THIRD READING
Bill No: AB 1398
Author: Papan (D)
Amended: 6/15/00 in Senate
Vote: 21
SENATE ENERGY, U.&C. COMMITTEE : 8-0, 6/27/00
AYES: Bowen, Alarcon, Hughes, Kelley, Mountjoy, Murray,
Solis, Vasconcellos
SENATE JUDICIARY COMMITTEE : 9-0, 8/8/00
AYES: Burton, Escutia, Haynes, Morrow, O'Connell, Peace,
Sher, Wright, Schiff
ASSEMBLY FLOOR : Not Relevant
SUBJECT : Public water utilities: judicial review of PUC
decisions
SOURCE : California Association of Water Agencies
DIGEST : This bill indefinitely extends the following
current provisions for judicial review of California Public
Utilities Commission decisions affecting water
corporations, which would otherwise be replaced on January
1, 2001, with a different, less deferential review
standard:
1. Review of commission decisions pertaining solely to
water corporations are only by petition for writ of
review in the supreme court, except that review of
complaint or enforcement proceedings may be in the court
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of appeal or the supreme court.
2.The standard of review in ratemaking and licensing
decisions is under the "any evidence" test, and for other
types of decisions the review extends no further than to
determine whether the commission has regularly pursued
its authority, including a determination whether the
order or decision under review violates any right of the
petitioner under the state or federal constitution.
3.The supreme court will grant expedited consideration to
any petition alleging that the court of appeal has
assumed jurisdiction to review a commission decision
pertaining solely to a water corporation over which the
court of appeal has no jurisdiction.
ANALYSIS : Existing law authorizes any aggrieved party to
petition the court of appeal or the supreme Court to review
decisions of the California Public Utilities Commission
(PUC).
Existing law also provides that, until January 1, 2001,
review of commission decisions pertaining solely to water
corporations are only by petition for writ of review in the
supreme court, except that review of complaint or
enforcement proceedings may be in the court of appeal or
the supreme court.
This bill continues the current provisions for review of
PUC decisions pertaining to water corporations.
Existing law provides that no new or additional evidence
may be introduced upon review of a commission decision by
the court. In a complaint or enforcement proceeding, or in
a ratemaking or licensing decision of specific application
that is addressed to particular parties, the review by the
court does not extend further than to determine, on the
basis of the entire record, whether (abuse of discretion)
occurred.
Existing law also provides that, until January 1, 2001,
this standard of judicial review does not apply to
ratemaking or licensing decisions of specific application
addressed solely to water corporations. Instead the "any
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evidence" test applies, which means if there is any
evidence to support the PUC decision, it will stand.
This bill would continue this exemption from the standard
of review for ratemaking or licensing decisions of specific
application relating solely to water corporations.
Existing law provides until January 1, 2001, in reviewing
decisions (other than ratemaking and licensing decisions
discussed above) pertaining solely to water corporations,
the review extends no further than to determine whether the
commission has regularly pursued its authority, including a
determination whether the order or decision under review
violates any right of the petitioner under the state or
federal constitution.
This bill would continue this standard of review for water
corporations.
Existing law provides that, until January 1, 2001, the
supreme court will grant expedited consideration to any
petition alleging that the court of appeal has assumed
jurisdiction to review a commission decision pertaining
solely to a water corporation over which the court of
appeal has no jurisdiction.
This bill continues that provision.
Background
Article XII of the State Constitution establishes the PUC
for the purpose of fixing rates, establishing rules,
examining records, and prescribing a uniform system of
accounting for all public utilities subject to its
jurisdiction. To this end, the commission institutes
internal procedures governing its decision-making process.
Article XII, Section 5 provides that "the Legislature has
plenary power ... to establish the manner and scope of
review of commission action in a court of record " Thus,
the Legislature may create different standards for review
of commission decisions or designate lower courts for
appeal.
In 1998, SB 779 (Calderon), Chapter 886, Statutes of 1998,
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made substantial changes in the judicial review process of
PUC decisions. In relevant part, SB 779 provided for
expanded judicial review of major PUC decisions by both the
California Supreme Court and the court of appeal, from
abuse of discretion to substantial evidence review. This
provision was operative for all entities on January 1,
1999, except for decisions affecting water corporations,
for whom the expanded judicial review is set to begin
January 1, 2001.
This bill indefinitely extends the deferential review
standards of PUC decisions affecting water corporations.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
ARGUMENTS IN SUPPORT : The bill's sponsor, the California
Water Association (CWA), writes to explain the need for
legislation, saying, "Prior to the CPUC reforms of 1996,
the California Supreme Court was the court of original
jurisdiction for the appeal of all CPUC decisions. Reforms
enacted in that year allow an appeal of decisions involving
enforcement or customer complaints for all utilities to be
heard in either the District Courts of Appeal or the state
Supreme Court. Legislation enacted in 1998 (SB 779)
extended the option of lower court review for all CPUC
decisions relating to energy, telecom and transportation
utilities, because (as the legislative findings and
declarations note), the conversion of those industries from
traditional regulated markets to competitive markets
'require expanded access to the court system at all
levels.' The measure delayed availability of lower court
review for decisions pertaining to water corporations until
January 1, 2001.
"Water utilities, however, remain the only fully regulated
utilities subject to traditional, rigorous CPUC regulation.
As such, they forgo certain marketplace prerogatives, but
remain fully under the regulatory umbrella for their
financial stability and for ratepayer protection. The
CPUC's broader regulatory authority over water corporations
makes greater judicial involvement unnecessary; statewide
continuity and consistency is obtained through Commission
regulation. Indeed, the Legislative findings of SB 779.
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Note: "?inasmuch as the water supply industry continues to
operate in a traditional, noncompetitive utility market, .
. . changes in judicial review of competitive utility
markets are inappropriate in their application to Public
Utilities Commission decisions and proceedings that pertain
to water corporations until January 1, 2001.
"As January 1, 2001, approaches, the water supply industry
remains 'a traditional, noncompetitive utility market,'
making it unique among the utility industry. The CPUC's
broader regulatory authority over water corporations makes
greater judicial involvement, as might occur with the
advent of lower court review of 'quasi-legislative'
decisions, inappropriate until such time as the water
supply industry is deregulated. AB 1398 would maintain the
status quo for judicial review of CPUC decisions pertaining
to water corporations, while the industry continues to
function as traditional,
noncompetitive, regulated utility service suppliers."
NC:kb 8/22/00 Senate Floor Analyses
SUPPORT/OPPOSITION: NONE RECEIVED
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