BILL ANALYSIS                                                                                                                                                                                                    



                                                          SB 33
                                                          Page  1

SENATE THIRD READING
SB 33 (Peace)
As Amended July 7, 1999
Majority vote 

  SENATE VOTE  :  26-9

  UTILITIES AND COMMERCE          11-1                 
APPROPRIATIONS      14-7        
  
 ----------------------------------------------------------------- 
|Ayes:|Wright, Pescetti,         |Ayes:|Migden, Cedillo, Davis,   |
|     |Calderon, Campbell,       |     |Hertzberg, Kuehl, Papan,  |
|     |Cardenas, Maddox,         |     |Romero, Keeley,           |
|     |Mazzoni, Thomson, Reyes,  |     |Steinberg, Thomson,       |
|     |Vincent, Wesson           |     |Wesson, Wiggins, Wright,  |
|     |                          |     |Aroner                    |
|     |                          |     |                          |
|-----+--------------------------+-----+--------------------------|
|Nays:|Frusetta                  |Nays:|Brewer, Ackerman,         |
|     |                          |     |Ashburn, Campbell,        |
|     |                          |     |Maldonado, Runner, Zettel |
 ----------------------------------------------------------------- 

  SUMMARY  :  Transfers authority from the California Public  
Utilities Commission (CPUC) to the Governor to designate a  
president of CPUC and requires the president to direct the staff  
of CPUC, as specified.  Specifically,  this bill  : 

1)Requires the Governor to designate the president of CPUC from  
  among its members.

2)Requires the president to direct the executive director, the  
  attorney, and other CPUC staff, except for the staff of the  
  division which represents the interests of public utility  
  customers and subscribers in CPUC proceedings, in the  
  performance of their duties, in accordance with CPUC policies  
  and guidelines. 

3)Specifies that the attorney and executive director may be  
  directed in their duties by a vote of CPUC, as prescribed.

4)Authorizes the Governor, until January 1, 2003, to appoint up  
  to two advisers for each member to CPUC, and prohibits the  
  total number of advisers exempt from civil service from  








                                                          SB 33
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  exceeding 10.

5)Requires CPUC to seek funding for staffing in accordance with  
  that appointment provision through the annual Budget Act.

  EXISTING LAW  : 

1)Requires the members of CPUC to elect the president of CPUC.

2)Permits CPUC to appoint its own attorney and executive  
  director who perform at the direction of CPUC.

3)Permits each commissioner to have one adviser who is exempt  
  from civil service.

  FISCAL EFFECT  :  CPUC estimates annual special fund costs of  
about $400,000 for the five additional advisors.

  COMMENTS  :  Under existing law, the president of CPUC is elected  
by the members of CPUC.  This bill would transfer authority for  
designating the president of CPUC from CPUC to the Governor.   
Additionally, this bill would require the president to direct  
CPUC staff, including CPUC attorney and executive director,  
except when directed otherwise by a vote of CPUC.  Staff  
representing ratepayers in CPUC proceedings would be excluded  
from these provisions.

CPUC (originally named the Railroad Commission) was created in  
1911.  In order to maximize CPUC's independence from the  
entities it regulated, CPUC was located in San Francisco.   
Additionally, numerous provisions were established to preserve  
CPUC's independence.  Then as now, CPUC members were appointed  
by the Governor for staggered six-year terms, and could be  
removed from office only for certain very limited reasons by a  
two-thirds vote of both houses of the Legislature.  This  
prevents an incoming Governor from immediately appointing a  
majority of CPUC, and enables CPUC to maintain some measure of  
independence from the state's chief executive.

CPUC's independence, once seen as its greatest strength, is now  
seen by some as a weakness or flaw.  In recent years, numerous  
stakeholders have expressed frustration with CPUC's lack of  
accountability.  This bill would increase CPUC's accountability  
to the incumbent governor by providing the chief executive with  
the authority to designate the president of CPUC.  CPUC  








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executive director, attorney, and most members of CPUC staff,  
would be directed by the gubernatorially-appointed president.

Existing 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 10.  In 1996, the Legislature passed SB 960 (Leonard),  
Chapter 856, Statutes of 1996, which significantly increased  
commissioner workload and participation in hearings.  Increasing  
the number of civil service-exempt advisers would help enable  
commissioners to handle their increased workload.

Increasing the number of civil service-exempt commission  
advisers would make the commissioners less reliant on the  
professional staff at CPUC, and would likely result in CPUC  
decisions reflecting more of the values and judgments of the  
commissioners and less those of professional staff.  Opponents  
of this bill argue that increased reliance on short-term  
political appointees would make political considerations more  
important than market facts, economic facts, and  
customer-service facts that constitute the record in commission  
proceedings.

At a recent meeting, CPUC voted to support this measure.  


  Analysis Prepared by  :  Joseph Lyons / U. & C. / (916) 319-2083 


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