BILL NUMBER: SB 215 AMENDED
BILL TEXT
AMENDED IN SENATE APRIL 15, 2015
INTRODUCED BY Senator Leno
FEBRUARY 12, 2015
An act to amend Sections 305, 307, 308, 309.6, 1701.1,
1701.2, 1701.3, and 1701.4 and
1701.2 of, and to add Section 305.5 to, the Public Utilities
Code, relating to the Public Utilities Commission.
LEGISLATIVE COUNSEL'S DIGEST
SB 215, as amended, Leno. Public Utilities Commission.
(1) The California Constitution establishes the Public Utilities
Commission, with jurisdiction over all public utilities. The
California Constitution grants the commission certain general powers
over all public utilities, subject to control by the Legislature, and
authorizes the Legislature, unlimited by the other provisions of the
California Constitution, to confer additional authority and
jurisdiction upon the commission that is cognate and germane to the
regulation of public utilities. Existing law requires the Governor to
designate the president of the commission from among its members and
requires the president to direct the executive director, the
attorney, and other staff of the commission, except for the Office of
Ratepayer Advocates. Existing law authorizes the executive director
and the attorney to undertake certain actions if directed or
authorized by the president, except as otherwise directed or
authorized by vote of the commission.
This bill would repeal the requirement that the president direct
the executive director, the attorney, and other commission staff. The
bill would 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. The bill
would authorize the commission to delegate specific management and
internal oversight functions to committees composed of 2 or more
commissioners and would exempt a meeting conducted by those
committees from the Bagley-Keene Open Meeting Act. The bill would
require the commission to vote in an open meeting on the assignment
or reassignment of any proceeding to one or more
commissioners.
(2) Existing law requires the commission, upon initiating a
hearing, to assign one or more commissioners to oversee the case and
an administrative law judge, where appropriate. Existing law requires
the assigned commissioner to prepare and issue, by order or ruling,
a scoping memo that describes the issues to be considered and the
applicable timetable for resolution. Existing law requires the
commission , to adopt procedures on the
disqualification of administrative law judges due to bias or
prejudice similar to those of other state agencies and superior
courts.
This bill would 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 ratesetting 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. The bill would 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.
(3) Existing law regulates communications in hearings before the
commission and defines "ex parte communication" to mean any oral or
written communication between a decisionmaker and a person with an
interest in a matter before the commission concerning substantive,
but not procedural, issues that does not occur in a public hearing,
workshop, or other public proceeding, or on the official record of
the proceeding on the matter. Existing law defines "person with an
interest" to mean, among other things, a person with a financial
interest in a matter before the commission, or an agent or employee
of the person with a financial interest, or a person receiving
consideration for representing the person with a financial interest.
Existing law requires the commission, by regulation, to adopt and
publish a definition of the terms "decisionmaker" and "persons" for
those purposes, along with any requirements for written reporting of
ex parte communications and appropriate sanctions for noncompliance
with any rule proscribing ex parte communications.
This bill would 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. The bill would define "decisionmaker" to include the
executive director of the commission, the general counsel of the
commission, and the directors of specified divisions of the
commission. The bill would require communications between a person
with an interest who is not a party to a commission proceeding and a
decisionmaker to be reported by the decisionmaker but would not
require the communications to be reported by the person with an
interest who is not a party to a commission proceeding.
(4) The Public Utilities Act requires the commission to prohibit
ex parte communications in adjudication cases. Under existing law, a
violation of the Public Utilities Act or any order, decision, rule,
direction, demand, or requirement of the commission is a crime.
This bill would require the commission to additionally
prohibit communications concerning procedural issues in adjudication
cases between parties or persons with an interest and decisionmakers,
except for the assigned administrative law judge. Because a
violation of this prohibition would be a crime, this bill would
impose a state-mandated local program.
(5) The Public Utilities Act requires the commission to prohibit
ex parte communications in ratesetting cases, except as provided. If
an ex parte communication meeting is granted to any party, the
commission is required to grant all other parties individual ex parte
meetings of a substantially equal period of time and to send a
notice of that authorization at the time that the request is granted.
The act authorizes the commission to establish a period during which
no oral or written ex parte communications are permitted and
authorizes the commission to meet in closed session during that
period.
This bill would delete the requirement that the commission grant
all other parties individual ex parte meetings if an ex parte meeting
is granted to a party. The bill would delete the authority of the
commission to establish a period during which no oral or written
communications are permitted and would delete the authority of the
commission to meet in closed session during that period. The bill
would also delete related authority of the commission.
This bill would require the commission to additionally prohibit
communications concerning procedural issues in ratesetting cases
between parties or persons with an interest and decisionmakers,
except for the assigned administrative law judge. Because a violation
of this prohibition would be a crime, this bill would impose a
state-mandated local program.
(6) The Public Utilities Act requires the commission to permit ex
parte communications in quasi-legislative cases without restriction.
The bill would require an ex parte communication to be reported
within 3 working days of the communication by filing a "Notice of Ex
Parte Communication" with the commission in accordance with the
procedures established by the commission for the service of that
notice. Because a violation of this reporting requirement would be a
crime, this bill would impose a state-mandated local program.
(7)
(5) The California Constitution requires the state to
reimburse local agencies and school districts for certain costs
mandated by the state. Statutory provisions establish procedures for
making that reimbursement.
This bill would provide that no reimbursement is required by this
act for a specified reason.
(8)
(6) Existing constitutional provisions require that a
statute that limits the right of access to the meetings of public
bodies or the writings of public officials and agencies be adopted
with findings demonstrating the interest protected by the limitation
and the need for protecting that interest.
This bill would make legislative findings to that effect.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 305 of the Public Utilities Code is amended to
read:
305. The Governor shall designate a president of the commission
from among the members of the commission. The president shall preside
at all meetings and sessions of the commission.
SEC. 2. Section 305.5 is added to the Public Utilities Code, to
read:
305.5. (a) The commission shall direct the executive director,
the attorney, and other staff of the commission, except for the staff
of the division described in Section 309.5, in performance of their
duties.
(b) The commission may delegate specific management and internal
oversight functions to committees composed of two or more
commissioners. Committees shall meet regularly with staff and shall
report to the commission for additional guidance or approval of
decisions pertaining to the operations of the commission.
(c) A meeting conducted pursuant to subdivision (b) is exempt from
the Bagley-Keene Open Meeting Act (Article 9 (commencing with
Section 11120) of Chapter 1 of Part 1 of Division 3 of Title 2 of the
Government Code).
(d) The commission shall vote in an open meeting on the assignment
or reassignment of any proceeding to one or more commissioners.
SEC. 3. Section 307 of the Public Utilities Code is amended to
read:
307. (a) The commission may appoint as attorney to the commission
an attorney at law of this state, who shall hold office during the
pleasure of the commission.
(b) The attorney shall represent and appear for the people of the
State of California and the commission in all actions and proceedings
involving any question under this part or under any order or act of
the commission. If directed to do so by the commission, the attorney
shall intervene, if possible, in any action or proceeding in which
any such question is involved.
(c) The attorney shall commence, prosecute, and expedite the final
determination of all actions and proceedings directed or authorized
by the commission, advise the commission and each commissioner, when
so requested, in regard to all matters in connection with the powers
and duties of the commission and the members thereof, and generally
perform all duties and services as attorney to the commission that
the commission may require of him or her.
SEC. 4. Section 308 of the Public Utilities Code is amended to
read:
308. (a) The commission shall appoint an executive director, who
shall hold office during its pleasure. The executive director shall
be responsible for the commission's executive and administrative
duties and shall organize, coordinate, supervise, and direct the
operations and affairs of the commission and expedite all matters
within the commission's jurisdiction.
(b) The executive director shall keep a full and true record of
all proceedings of the commission, issue all necessary process,
writs, warrants, and notices, and perform any other duties as the
commission prescribes. The commission may authorize the executive
director to dismiss complaints or applications when all parties are
in agreement thereto, in accordance with rules that the commission
may prescribe.
(c) The commission may appoint assistant executive directors who
may serve warrants and other process in any county or city and county
of this state.
SEC. 5. Section 309.6 of the Public Utilities Code is amended to
read:
309.6. (a) The commission shall adopt procedures on the
disqualification of commissioners and administrative law judges due
to bias or prejudice similar to those of other state agencies and
superior courts.
(b) (1) For ratesetting and adjudicatory proceedings, a
commissioner or administrative law judge shall be disqualified if
there is an appearance of bias or prejudice based on any of the
following:
(A) Actions taken during the proceeding.
(B) Private communications before the commencement of the
proceeding to influence the request for relief sought by any party to
the proceeding.
(C) Actions demonstrating any commitment to provide relief to a
party.
(2) Past work experience by the commissioner or administrative law
judge shall not be a sufficient basis for demonstrating an
appearance of bias or prejudice pursuant to paragraph (1).
(c) The commission procedures shall not authorize a commissioner
or administrative law judge to rule on a motion made by a party to a
proceeding to disqualify the commissioner or administrative law judge
due to bias or prejudice.
(d) The commission shall develop the procedures with the
opportunity for public review and comment.
SEC. 6. Section 1701.1 of the Public Utilities Code is amended to
read:
1701.1. (a) The commission, consistent with due process, public
policy, and statutory requirements, shall determine whether a
proceeding requires a hearing. The commission shall determine whether
the matter requires a quasi-legislative, an adjudication, or a
ratesetting hearing. The commission's decision as to the nature of
the proceeding shall be subject to a request for rehearing within 10
days of the date of that decision. If that decision is not appealed
to the commission within that time period it shall not be
subsequently subject to judicial review. Only those parties who have
requested a rehearing within that time period shall subsequently have
standing for judicial review and that review shall only be available
at the conclusion of the proceeding. The commission shall render its
decision regarding the rehearing within 30 days. The commission
shall establish regulations regarding ex parte communication on case
categorization issues.
(b) The commission upon initiating a hearing shall assign one or
more commissioners to oversee the case and an administrative law
judge where appropriate. The assigned commissioner shall schedule a
prehearing conference. The assigned commissioner shall prepare and
issue by order or ruling a scoping memo that describes the issues to
be considered and the applicable timetable for resolution.
(c) (1) Quasi-legislative cases, for purposes of this article, are
cases that establish policy, including, but not limited to,
rulemakings and investigations which may establish rules affecting an
entire industry.
(2) Adjudication cases, for purposes of this article, are
enforcement cases and complaints except those challenging the
reasonableness of any rates or charges as specified in Section 1702.
(3) Ratesetting cases, for purposes of this article, are cases in
which rates are established for a specific company, including, but
not limited to, general rate cases, performance-based ratemaking, and
other ratesetting mechanisms.
(4) (A) "Ex parte communication," for purposes of this article,
means any oral or written communication between a decisionmaker and a
person with an interest in a matter before the commission concerning
substantive, but not procedural issues, that does not occur in a
public hearing, workshop, or other public proceeding, or on the
official record of the proceeding on the matter. "Person with an
interest," for purposes of this article, means any of the following:
(i) Any applicant, an agent or an employee of the applicant, or a
person receiving consideration for representing the applicant, or a
participant in the proceeding on any matter before the commission.
(ii) Any person with a financial interest, as described in Article
1 (commencing with Section 87100) of Chapter 7 of Title 9 of the
Government Code, in a matter before the commission, or an agent or
employee of the person with a financial interest, or a person
receiving consideration for representing the person with a financial
interest. 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 is a person with a financial interest.
(iii) A representative acting on behalf of any civic,
environmental, neighborhood, business, labor, trade, or similar
organization who intends to influence the decision of a commission
member on a matter before the commission.
(B) Decisionmakers shall include the general counsel, the
executive director, 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. The commission shall by regulation adopt and
publish a definition of additional decisionmakers and persons for
purposes of this section, along with any requirements for written
reporting of ex parte communications and appropriate sanctions for
noncompliance with any rule proscribing ex parte communications. The
regulation shall provide that reportable communications shall be
reported by the party, whether the communication was initiated by the
party or the decisionmaker. However, communications between a person
with an interest who is not a party to a commission proceeding and a
decisionmaker shall be reported by the decisionmaker in accordance
with procedures established pursuant to this section and shall not be
required to be reported by the person with an interest who is not a
party to a commission proceeding. Communications shall be reported
within three working days of the communication by filing a "Notice of
Ex Parte Communication" with the commission in accordance with the
procedures established by the commission for the service of that
notice. The notice shall include the following information:
(i) The date, time, and location of the communication, and whether
it was oral, written, or a combination.
(ii) The identity of the recipient and the person initiating the
communication, as well as the identity of any persons present during
the communication.
(iii) A description of the party's, but not the decisionmaker's,
communication and its content, to which shall be attached a copy of
any written material or text used during the communication.
(C) An ex parte communication shall not be part of the record of
any proceeding and shall not be considered, or relied upon, for
purposes of the commission's resolution of contested issues.
SEC. 7. Section 1701.2 of the Public Utilities Code is amended to
read:
1701.2. (a) If the commission pursuant to Section 1701.1 has
determined that an adjudication case requires a hearing, the
procedures prescribed by this section shall be applicable. The
assigned commissioner or the assigned administrative law judge shall
hear the case in the manner described in the scoping memo. The
scoping memo shall designate whether the assigned commissioner or the
assigned administrative law judge shall preside in the case. The
commission shall provide by rule for peremptory challenges and
challenges for cause of the administrative law judge. Challenges for
cause shall include, but not be limited to, financial interests and
prejudice. The rule shall provide that all parties are entitled to
one peremptory challenge of the assignment of the administrative law
judge in all cases. All parties are entitled to unlimited peremptory
challenges in any case in which the administrative law judge has
within the previous 12 months served in any capacity in an advocacy
position at the commission, been employed by a regulated public
utility, or has represented a party or has been a party of interest
in the case. The assigned commissioner or the administrative law
judge shall prepare and file a decision setting forth
recommendations, findings, and conclusions. The decision shall be
filed with the commission and served upon all parties to the action
or proceeding without undue delay, not later than 60 days after the
matter has been submitted for decision. The decision of the assigned
commissioner or the administrative law judge shall become the
decision of the commission if no further action is taken within 30
days. Any interested party may appeal the decision to the commission,
provided that the appeal is made within 30 days of the issuance of
the decision. The commission may itself initiate a review of the
proposed decision on any grounds. The commission decision shall be
based on the record developed by the assigned commissioner or the
administrative law judge. A decision different from that of the
assigned commissioner or the administrative law judge shall be
accompanied by a written explanation of each of the changes made to
the decision.
(b) Notwithstanding Section 307, an officer, employee, or agent
of the commission that is personally involved in the prosecution or
in the supervision of the prosecution of an adjudication case before
the commission shall not participate in the decision of the case, or
in the decision of any factually related adjudicatory proceeding,
including participation in or advising the commission as to findings
of fact, conclusions of law, or orders. An officer, employee, or
agent of the commission that is personally involved in the
prosecution or in the supervision of the prosecution of an
adjudication case may participate in reaching a settlement of the
case, but shall not participate in the decision of the commission to
accept or reject the settlement, except as a witness or counsel in an
open hearing or a hearing closed pursuant to subdivision (d). The
Legislature finds that the commission performs both prosecutorial and
adjudicatory functions in an adjudication case and declares its
intent that an officer, employee, or agent of the commission,
including its attorneys, may perform only one of those functions in
any adjudication case or factually related adjudicatory proceeding.
(c) (1) Ex parte communications shall be prohibited in
adjudication cases.
(2) Any oral or written communications concerning procedural
issues in adjudication cases between parties or persons with an
interest and decisionmakers, except the assigned administrative law
judge, shall be prohibited.
(d) Notwithstanding any other law, the commission may meet in a
closed hearing to consider the decision that is being appealed. The
vote on the appeal shall be in a public meeting and shall be
accompanied with an explanation of the appeal decision.
(e) Adjudication cases shall be resolved within 12 months of
initiation unless the commission makes findings why that deadline
cannot be met and issues an order extending that deadline. In the
event that a rehearing of an adjudication case is granted, the
parties shall have an opportunity for final oral argument.
(f) (1) The commission may determine that the respondent lacks, or
may lack, the ability to pay potential penalties or fines or to pay
restitution that may be ordered by the commission.
(2) If the commission determines that a respondent lacks, or may
lack, the ability to pay, the commission may order the respondent to
demonstrate, to the satisfaction of the commission, sufficient
ability to pay potential penalties, fines, or restitution that may be
ordered by the commission. The respondent shall demonstrate the
ability to pay, or make other financial arrangements satisfactory to
the commission, within seven days of the commission commencing an
adjudication case. The commission may delegate to the attorney to the
commission the determination of whether a sufficient showing has
been made by the respondent of an ability to pay.
(3) Within seven days of the commission's determination of the
respondent's ability to pay potential penalties, fines, or
restitution, the respondent shall be entitled to an impartial review
by an administrative law judge of the sufficiency of the showing made
by the respondent of the respondent's ability to pay. The review by
an administrative law judge of the ability of the respondent to pay
shall become part of the record of the adjudication and is subject to
the commission's consideration in its order resolving the
adjudication case. The administrative law judge may enter temporary
orders modifying any financial requirement made of the respondent
pending the review by the administrative law judge.
(4) A respondent that is a public utility regulated under a rate
of return or rate of margin regulatory structure or that has gross
annual revenues of more than one hundred million dollars
($100,000,000) generated within California is presumed to be able to
pay potential penalties or fines or to pay restitution that may be
ordered by the commission, and, therefore, paragraphs (1) to (3),
inclusive, do not apply to that respondent.
SEC. 8. Section 1701.3 of the Public Utilities
Code is amended to read:
1701.3. (a) If the commission pursuant to Section 1701.1 has
determined that a ratesetting case requires a hearing, the procedures
prescribed by this section shall be applicable. The assigned
commissioner shall determine prior to the first hearing whether the
commissioner or the assigned administrative law judge shall be
designated as the principal hearing officer. The principal hearing
officer shall be present for more than one-half of the hearing days.
The decision of the principal hearing officer shall be the proposed
decision. An alternate decision may be issued by the assigned
commissioner or the assigned administrative law judge who is not the
principal hearing officer. The commission shall establish a procedure
for any party to request the presence of a commissioner at a
hearing. The assigned commissioner shall be present at the closing
arguments of the case. The principal hearing officer shall present
the proposed decision to the full commission in a public meeting. The
alternate decision, if any, shall also be presented to the full
commission at that public meeting. The alternate decision shall be
filed with the commission and shall be served on all parties
simultaneously with the proposed decision.
The presentation to the full commission shall contain a record of
the number of days of the hearing, the number of days that each
commissioner was present, and whether the decision was completed on
time.
(b) The commission shall provide by regulation for peremptory
challenges and challenges for cause of the administrative law judge.
Challenges for cause shall include, but not be limited to, financial
interests and prejudice. All parties shall be entitled to unlimited
peremptory challenges in any case in which the administrative law
judge has within the previous 12 months served in any capacity in an
advocacy position at the commission, been employed by a regulated
public utility, or has represented a party or has been a party of
interest in the case.
(c) (1) Ex parte communications are prohibited in ratesetting
cases. However, oral ex parte communications may be permitted at any
time by any commissioner if all interested parties are invited and
given not less than three days' notice. Written ex parte
communications may be permitted by any party provided that copies of
the communication are transmitted to all parties on the same day.
(2) Any oral or written communications concerning procedural
issues in ratesetting cases between parties or persons with an
interest and decisionmakers, except the assigned administrative law
judge, shall be prohibited. However, these communications may be
permitted in the same manner as described for the ex parte
communications in paragraph (1).
(d) Any party has the right to present a final oral argument of
its case before the commission. Those requests shall be scheduled in
a timely manner. A quorum of the commission shall be present for the
final oral arguments.
(e) The commission may, in issuing its decision, adopt, modify, or
set aside the proposed decision or any part of the decision based on
evidence in the record. The final decision of the commission shall
be issued not later than 60 days after the issuance of the proposed
decision. Under extraordinary circumstances the commission may extend
this date for a reasonable period. The 60-day period shall be
extended for 30 days if any alternate decision is proposed pursuant
to Section 311.
SEC. 9. Section 1701.4 of the Public Utilities
Code is amended to read:
1701.4. (a) If the commission pursuant to Section 1701.1 has
determined that a quasi-legislative case requires a hearing, the
procedures prescribed by this section shall be applicable. The
assigned administrative law judge shall act as an assistant to the
assigned commissioner in quasi-legislative cases. The assigned
commissioner shall be present for formal hearings. The assigned
commissioner shall prepare the proposed rule or order with the
assistance of the administrative law judge. The assigned commissioner
shall present the proposed rule or order to the full commission in a
public meeting. The report shall include the number of days of
hearing and the number of days that the commissioner was present.
(b) Ex parte communications shall be permitted. Any ex parte
communication shall be reported within three working days of the
communication by filing a "Notice of Ex Parte Communication" with the
commission in accordance with the procedures established by the
commission for the service of that notice.
(c) Any party has the right to present a final oral argument of
its case before the commission. Those requests shall be scheduled in
a timely manner. A quorum of the commission shall be present for the
final oral arguments.
(d) The commission may, in issuing its rule or order, adopt,
modify, or set aside the proposed decision or any part of the rule or
order. The final rule or order of the commission shall be issued not
later than 60 days after the issuance of the proposed rule or order.
Under extraordinary circumstances the commission may extend this
date for a reasonable period. The 60-day period shall be extended for
30 days if any alternate rule or order is proposed pursuant to
Section 311.
SEC. 10. SEC. 8. No reimbursement is
required by this act pursuant to Section 6 of Article XIII B of the
California Constitution because the only costs that may be incurred
by a local agency or school district will be incurred because this
act creates a new crime or infraction, eliminates a crime or
infraction, or changes the penalty for a crime or infraction, within
the meaning of Section 17556 of the Government Code, or changes the
definition of a crime within the meaning of Section 6 of Article XIII
B of the California Constitution.
SEC. 11. SEC. 9. The Legislature
finds and declares that Section 2 of this act, which adds Section
305.5 to the Public Utilities Code, imposes a limitation on the
public's right of access to the meetings of public bodies or the
writings of public officials and agencies within the meaning of
Section 3 of Article I of the California Constitution. Pursuant to
that constitutional provision, the Legislature makes the following
findings to demonstrate the interest protected by this limitation and
the need for protecting that interest:
(a) The limitations are reasonable in light of the need for the
Public Utilities Commission to manage its internal affairs in a
manner that allows all commissioners to fully participate.
(b) The specific management and internal oversight functions
addressed by this limitation do not involve determinations of law or
policy that would bias the outcome of pending proceedings or harm the
public interest.
(c) In order to ensure the effective functioning of the
commission, this act is necessary.