June 2015 Legislative Update: CPUC, CEC, and Utility Reform

The following sections summarize proposed bills that have passed their house of origin with an emphasis on CPUC, CEC, and Utility reform measures.  Emphasis is given to proposed changes to Ex Parte rules.

A. California Public Utility Commission (CPUC) Reform: SB 48

Changes to CPUC President Authority: This bill would repeal the president of the Public Utilities Commission’s authority to direct the executive director, the attorney, and other commission staff and delete the authority of the president to direct or authorize the executive director and attorney to undertake certain actions, thereby requiring that they be directed or authorized to undertake those actions by the commission.

Rules Governing CPUC Session: This bill would require that the commission hold its sessions at least once in each calendar month in the City and County of San Francisco or the City of Sacramento and would require that the commission hold no less than 6 sessions each year in the City of Sacramento,

Administrative Code of Ethics: This bill would make the Administrative Adjudication Code of Ethics applicable to adjudication hearings of the commission.

Commission Function and Operation: The bill would:

  • Except for in adjudication cases, require the commission, before instituting an investigation or proceeding on its own motion, where feasible and appropriate, to seek the views of those who are likely to be affected by a decision in the investigation or proceeding, including those who are likely to benefit from, and those who are potentially subject to, a decision in that investigation or proceeding;
  • Require the commission to post all prepared written testimony submitted in its formal proceedings on its Internet Web site;
  • Expand the requirement that the required commission work plan describe in clear detail the scheduled proceedings that may be considered by the commission during the calendar year to include all proceedings and not just rate making proceedings;
  • Require that the work plan include performance criteria for the commission and executive director and evaluate the performance of the executive director during the previous year based on the criteria established in the prior year’s work plan;
  • Delete the requirement that the report include the number of cases where resolution exceeded the time periods prescribed in scoping memos and instead would require the report to describe the commission’s timeliness in resolving cases and include information on the disposition of applications for rehearings; and
  • Require that the report include the number of scoping memos issued in each proceeding and to include the number of orders issued extending the statutory deadlines for all adjudication, rate setting, and quasi-legislative cases.

Application of the Bagley-Keene Act: The bill authorizes an action to enforce the requirements of the Bagley-Keene Open Meeting Act or the California Public Records Act to be brought against the commission in the superior court.

B. California Public Utilities Commission Regulation of Officials and Ex Parte Rules: SB 660

Changes to CPUC President Authority: This bill would repeal the requirement that the president of the Public Utilities Commission direct the executive director, the attorney, and other commission staff and delete the authority of the president to direct or authorize the executive director and attorney to undertake certain actions, and would instead require that they be directed or authorized to undertake those actions by the commission.

CPUC Oversight and Operation: This bill would:

  • Authorize the commission to delegate specific management and internal oversight functions to committees composed of 2 commissioners;
  • Require the commission to vote in an open meeting on the assignment or reassignment of proceeding to one or more commissioners;
  • Require the commission to additionally adopt procedures on disqualification of commissioners due to bias or prejudice similar to those of other state agencies and superior courts;
  • For rate setting or adjudicatory proceedings, the bill would require a commissioner or an administrative law judge to be disqualified if there is an appearance of bias or prejudice based on specified criteria; and
  • Prohibit commission procedures from authorizing a commissioner or administrative law judge from ruling on a motion made by a party to a proceeding to disqualify the commissioner or administrative law judge due to bias or prejudice.

Ex Parte Communications and Conflict of Interest: This bill would:

  • Delete the provision that an ex parte communication concerns a substantive, but not a procedural matter, and instead would provide that an ex parte communication concerns any matter that the commission has not specified as being a procedural matter that is an appropriate subject for ex parte communication;
  • Require the commission to specify those procedural matters that are appropriate subjects for ex parte communications in its Rules of Practice and Procedure;
  • Define a person involved in issuing credit ratings or advising entities or persons who may invest in the shares or operations of any party to a proceeding as a person with a financial interest
  • Require that the commission, by rule, adopt and publish a definition of decision makers, that would be required to include each commissioner, the attorney for the commission, the executive director of the commission, the personal staff of each commissioner, including each advisor to a commissioner, the administrative law judge assigned to the proceeding, the director of the Energy Division, the director of the Communications Division, the director of the Water and Audits Division, and the director of the Safety and Enforcement Division;
  • Require communications between a person with an interest who is not a party to a commission proceeding and a decision maker to be reported by the decision maker but would not require the communications to be reported by the person with an interest who is not a party to a commission proceeding;
  • Require that a decision maker who makes or receives a prohibited ex parte communication, or who learns that a permissible ex parte communication was not reported as required, to disclose the content of the communication in the record of the proceeding;
  • Require the commission to establish rules for how to handle prohibited ex parte communications, including rules requiring reporting the person initiating the communication and whether the person persisted in continuing the communication after being advised that the communication was prohibited;
  • Require that an ex parte communication not be part of the record of any proceeding and not be considered, or relied upon, for purposes of the commission’s resolution of contested issues;
  • Provide that ex parte communications are permitted in quasi-legislative proceedings, but would require that they be reported within 3 working days of the communication by filing a “Notice of Ex Parte Communication” with the commission in accordance with procedures established by the commission for the service of that notice;
  • Require the commission to additionally prohibit communications concerning procedural issues in adjudication cases between parties or persons with an interest and decision makers, except for the assigned administrative law judge;
  • Delete the requirement that if an ex parte communication meeting is granted to any party in a rate setting proceeding, that all other parties also be granted individual ex parte meetings of a substantially equal period of time and that all parties be sent a notice of that authorization at the time the request is granted, at least 3 days prior to the meeting;
  • Prohibit oral communications concerning procedural issues in rate setting cases between parties or persons with an interest and decision makers other than the assigned administrative law judge, except that a commissioner would be authorized to permit an oral communication relative to procedural issues if all interested parties are invited and given not less than 3 days’ notice; and
  • Prohibit written ex parte communications concerning procedural issues in rate setting cases between parties or persons with an interest and decision makers other than the assigned administrative law judge, except that a commissioner would be authorized to permit a written communication relative to procedural issues by any party provided that copies of the communication are transmitted to all parties on the same day.

C. California Public Utilities Commission Ex Parte Communications: AB 1023

This bill would require the Public Utilities Commission to both establish and maintain a weekly communications log summarizing all oral or written ex parte communications and make each log available to the public on the commission’s Internet Web site.

D. California Energy Commission Conflict of Interest Regulation: SB 693

Existing law prescribes certain qualifications for members of the Energy Commission designed to eliminate professional, personal, and financial conflict of interests and makes the violation of these provisions a felony subject to fine of not more than $10,000 or imprisonment, or both. This bill would increase the maximum fine to $50,000 for a violation of those provisions.

E. Electric and Gas Corporation Excess Compensation Prohibition: AB 1266

Existing law requires that any expense resulting from a bonus paid to an executive officer, as defined, of a public utility that has ceased to pay its debts in the ordinary course of business, be borne by the shareholders of the public utility and prohibits any expense from being recovered in rates. This bill would:

  • Prohibit an electrical corporation or gas corporation from recovering from ratepayers expenses for excess compensation, as defined, paid to an officer of the utility following a triggering event, as defined, unless the utility obtains the approval of the Public Utilities Commission;
  • Following a triggering event and prior to paying or seeking recovery of excess compensation, the electrical corporation or gas corporation would be required to file a Tier 3 advice letter with the commission containing specified information If the electrical corporation or gas corporation sought or received authorization prior to the triggering event to recover excess compensation in rates; and
  • Require the commission to open a proceeding or expand the scope of an existing proceeding to evaluate the advice letter and, following a duly notice public hearing in the proceeding, to issue a written decision determining whether any expenses for excess compensation that the corporation was authorized to recover in rates should be refunded to ratepayers.
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About Joe Kaatz

Staff Attorney at the Energy Policy Initiatives Center, University of San Diego School of Law.
This entry was posted in Energy, Legislation and tagged , , , . Bookmark the permalink.

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