Utilities Commission Reforms: Take 3

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A Northern California lawmaker reintroduced legislation Monday intended to reform the state utilities commission, the powerful regulatory panel that has been under criminal investigation since 2014.

The bill from state Sen. Jerry Hill, D-San Mateo, would impose a series of changes at the California Public Utilities Commission that failed to make it through the Legislature this past summer or were vetoed by Gov. Jerry Brown last year.

Hill said Senate Bill 19 combines elements of a bill he wrote earlier this year with those of another measure from former Assemblyman Mike Gatto, D-Los Angeles.

Both measures failed to pass the Legislature in the final minutes of the summer session even though Brown and Gatto had announced a deal in June to adopt many of the same reforms.

Brown, who vetoed six bills aimed at reforming the utilities commission in 2015, signed some new measures to improve regulatory oversight of the commission in September.

“We’re part-way there and we have to continue the effort,” said Hill, who has been a leading critic of the commission since a natural gas pipeline exploded in San Bruno in 2010 and killed eight people. “It’s obvious there are still problems within the CPUC that need to be corrected.”

Brown agreed to a spate of reforms in June, after a Gatto-introduced constitutional amendment to strip the commission of much of its regulatory authority passed the state Assembly with broad support.

The strongest changes in that agreement were included in two bills by Hill and Gatto that did not make it out of the state Senate in the final minutes of the legislative session last August. 

In September, the governor signed five different commission-related bills that sought to increase transparency and make other improvements at the commission, and he said more needed to be done.

“I am calling on the commission to use its existing authority to take immediate action,” Brown said at the time. “Together, these administrative reforms and legislative acts will bring much-needed improvement to the commission.”

Brown spokesman Gareth Lacy declined to comment on the latest Hill legislation, but said, “the governor continues to support the reforms he and legislators announced earlier this year.”

Among other things, the new bill would allow people to take disputes over public records withheld by the commission to Superior Court. Current rules make the commission itself the first-level arbiter of its own public records decision.

Utility regulators have been criticized for failing to release documents requested under the California Public Records Act since the state Attorney General’s Office launched its criminal investigation in 2014. State agents have been reviewing backchannel dealings among regulators and utility executives, for possible improper influence.

The latest legislative proposal would prevent utility executives from serving on the commission for two years after leaving their job and says commissioners cannot hold a financial interest in a person or corporation subject to regulation by the agency.

Another key provision requires written consent from the Attorney General’s Office before the commission can contract with outside lawyers.

The commission is spending at least $12 million in public funds on private attorneys to respond to subpoenas and other document requests related to an ongoing criminal investigation into improper communications between regulators and utility executives.

Three months ago, the state auditor issued a report of commission practices, saying regulators had not guarded against the appearance of improper influence by utility executives and that they failed to fully disclose important communications between themselves and external parties.

The new Hill legislation also addresses the issue of spent fuel leftover from closed nuclear plants like the one at San Onofre, where more than 3 million pounds of toxic waste are scheduled to be buried for decades to come.

Specifically, it requires the commission to advocate before federal agencies “for expedited relocation” of the spent fuel.

The commission also would have to name an ethics officer to train commissioners and employees about potential conflicts of interest and provide confidential advice.

It would further create an internal auditor to review internal practices and a public adviser to help ratepayers participate in commission proceedings and process complaints from the public.

Gatto, who was chairman of the Assembly Committee on Utilities and Commerce until termed out of office this month, said Monday that he was grateful for the new legislation.

“I’m really thrilled that Sen. Hill is continuing the fight,” he said. “It’s a fight that is very important to the longterm health, safety and pocketbooks of California consumers and ratepayers.”

Jamie Court of the advocacy group Consumer Watchdog applauded Hill for bringing the issues at the utilities commission back into the statehouse.

“This is a second chance for Jerry Brown to get it right and do what he said he would do,” Court said. “These are important steps toward putting the public back into the Public Utilities Commission.”

The Hill legislation would have to pass the Assembly and Senate before making its way to the Governor’s Office, where it would either be signed into law or vetoed.

[email protected] (619) 293-1708 @sdutMcDonald

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