BILL ANALYSIS ------------------------------------------------------------ |SENATE RULES COMMITTEE | SB 33| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 445-6614 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ THIRD READING Bill No: SB 33 Author: Peace (D) Amended: 5/20/99 Vote: 21 SENATE ENERGY, U.&C. COMMITTEE : 6-3, 3/23/99 AYES: Bowen, Baca, Hughes, Peace, Solis, Speier NOES: Brulte, Kelley, Mountjoy NOT VOTING: Alarcon, Vasconcellos SENATE APPROPRIATIONS COMMITTEE : 7-5, 5/27/99 AYES: Johnston, Alpert, Bowen, Burton, Escutia, Karnette, Perata NOES: Johnson, Kelley, Leslie, McPherson, Mountjoy NOT VOTING: Vasconcellos SUBJECT : Public Utilities Commission: president: advisers SOURCE : Author DIGEST : This bill transfers authority from the Public Utilities Commission (PUC) to the Governor to designate a president of the PUC and requires the president to direct the staff of the PUC, as specified. The bill authorizes the Governor, until January 1, 2003, to appoint up to two advisers for each member of the PUC, and prohibits the total number of advisers exempt from civil service from exceeding 10. ANALYSIS : Current law specifies that the president of CONTINUED SB 33 Page 2 the California Public Utilities Commission (CPUC) shall be elected by its members. Current law permits the CPUC to appoint its own attorney and executive director who perform at the direction of the commission. This bill provides that the Governor shall designate a president of the CPUC from among its members and that the president shall direct the CPUC's attorney, executive director, and other staff, except for the staff which represent the interests of public utility customers and subscribers in commission proceedings. Current law permits each commissioner to have one adviser who is exempt from civil service. This bill provides that, until January 1, 2003, each commissioner may instead have up to two advisers who are exempt from civil service, and would prohibit the total number of advisers exempt from civil service from exceeding ten. The bill requires the PUC to seek funding for the additional staffing through the annual Budget Act. Background The basic structure of the CPUC was established early this century in response to the dominance of railroad interests into much of California's economic and political life. As part of Governor Hiram Johnson's reform movement, a series of constitutional amendments were enacted, one of which established Article XII creating the CPUC. The CPUC has historically been afforded much independence, in keeping with the turn of the century concerns about undue influence by the railroads. Consequently, commissioners were appointed for staggered six-year terms to ensure that no single governor could appoint a majority of commissioners within that governor's four-year term. The governor has no power to remove a commissioner; only the Legislature has that power. The CPUC has been given broad latitude to set its own procedures and any review of SB 33 Page 3 CPUC decisions has historically been limited to review only by the Supreme Court. Lately, some have viewed the CPUC's independence as less a virtue and more of a vice. Rather than independent, the CPUC has been seen to be lacking in accountability. Supporters of this view cite the CPUC-initiated efforts to restructure the electric and gas markets, which were severely modified or curtailed after the Legislature found that the CPUC proposals failed to find the proper balance of the competing public interests. Concurrent with the 1996 electric restructuring effort, a series of procedural reforms were enacted. Central to those reforms was an effort to improve the accountability of individual commissioners by encouraging those commissioners to spend more time in hearings and to take "ownership" of draft decisions. Those efforts have been at least partially successful in that commissioners are now more involved in the cases. The limited judicial review of CPUC decisions was also broadened to permit appellate court review, rather than Supreme Court review. This bill expands those reform efforts by doing two things. First, it more explicitly centralizes accountability for the functioning of the CPUC with its president by putting the Commission's Executive Director and the General Counsel directly under the control of the president. Second, it makes the president more directly accountable to the Governor because the Governor would appoint the president. The Chief Administrative Law Judge, the Director of the Strategic Planing Division, and the Public Adviser all currently are directed by the commission and are unaffected by this bill. This bill also provides for an expansion in the number of advisers each commissioner may have who are exempt from civil service rules. Current law permits each commissioner to have one adviser who is exempt from civil service rules but does not limit the overall number of advisers that each commissioner may have. Current practice provides each commissioner with one additional adviser, except for the president who has two additional advisers, all of whom are SB 33 Page 4 subject to civil service rules. Under this bill, each commissioner may, with the Governor's consent, have up to two advisers who are exempt from civil service rules. Consequently this bill increases the number of commission advisers and allows those advisers to be chosen from a broad talent pool. Comments 1.The organizational structure created in this bill is very similar to that used in the California Energy Commission (CEC) where the Governor designates a chair and vice-chair and the chair directs the executive director and other staff. The CEC organizational structure is common but by no means universal. For example, the Coastal Commission elects its own chair and vice-chair and appoints its own executive director, as does the Integrated Waste Management Board. At the Air Resources Board the Governor appoints the chair and the board appoints its own executive officer. Arguably the Governor has always had control over the CPUC and its presidency, both in Republican and Democratic administrations, because if the Governor had a preference for the president then that preference was honored. Under that theory, this bill simply makes explicit the implicit control that has been historically exercised. In the case of transitions, where a new administration is assuming control, giving the Governor the power to appoint a president would enhance the new administration's influence within the CPUC. However, this influence would not equate to control until the new administration had appointed a majority of the commissioners. 2.Increasing the number of commission advisers may be justified because commissioners are stretched thinner as a result of the recent reforms requiring greater commissioner participation in hearings. Expanding the commissioners' personal staffs should make the commissioners less reliant on the professional staff at the CPUC, thus making it possible for CPUC decisions to SB 33 Page 5 reflect more of the values and judgements of the commissioners and less of the professional staff. FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes Local: No Unknown, potentially up to $1,500,000 annually. Costs could be offset by future staff reductions elsewhere within the PUC resulting from reduced workload. The average cost in salary and benefits for the existing PUC advisers is approximately $100,000 annually per adviser. Costs may be less. SUPPORT : (Verified 5/27/99) American Federation of State, County And Municipal Employees (AFSCME) Coalition of California Utility Employees Southern California Edison Southern California Gas Workers Council NC:sl 5/29/99 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE **** END ****