Governor Signs Sen. Leno’s Public Utilities Commission Reform

South San Francisco, CA  September 28, 2016 Press Releaseunnamed

SB 215 Increases Transparency & Accountability with State Auditor’s Recommended Reforms

SACRAMENTO- The California Public Utilities Commission (CPUC) will be more transparent and accountable to the public following Governor Brown’s approval of SB 215 today. Jointly authored by Senators Mark Leno (D-San Francisco) and Ben Hueso (D-San Diego), SB 215 will reform the CPUC’s ex parte communication rules and make it easier to disqualify a commissioner for bias, both of which were recommended by the State Auditor in a report released last week.

“The reforms approved by the Governor today will ensure commissioners disclose their private meetings with utility executives and will result in heavy penalties for those who violate the rules,” said Senator Leno. “The changes included in SB 215 will help keep the CPUC focused on the public’s ratepayer and safety interests, and I am pleased we were able to find common ground with the Governor in pursuit of enhanced transparency and accountability.”

A natural gas explosion that destroyed a San Bruno neighborhood in 2010 killing eight people, and the largest natural gas leak in U.S. history that sickened thousands of residents in the Porter Ranch section of Los Angeles last fall, have undermined trust in the CPUC’s ability to protect public safety, the environment, and California consumers. Emails that were made public appear to show private decision making between the agency and the entities it regulates on how to assign substantial costs to ratepayers, efforts to select a rate-setting hearing judge, and where not to look in an investigation into the San Bruno disaster.

SB 215 seeks to enhance transparency and accountability at the CPUC by reforming the Commission’s ex parte communication rules. Currently, CPUC rules permit substantive ex parte communications between commissioners and “any person with any interest before the Commission.” Ex parte refers to communications on behalf of or involving only one party and in the absence of other parties, such as those representing ratepayer interests. Current CPUC rules do not require commissioners to report these communications.

SB 215 reforms the CPUC ex parte communication rules by requiring commissioners to disclose their ex parte meetings, requiring utilities to provide substantive descriptions of what is said in such meetings, prohibiting judge shopping by utilities, increasing penalties for violations of the rules, and reforming the standard for disqualification of a commissioner or administrative law judge for bias. The bill also charges the Attorney General with the enforcement of ex parte rules in Superior Court when the violators are commissioners or other CPUC officials.

Last week, the State Auditor released a report that recommended significant reforms at the California Public Utilities Commission to increase transparency and accountability. Among the recommendations, the report called upon the Legislature to amend state law to adopt new standards for commissioners to recuse themselves from proceedings and set new rules to require commissioners to publicly report private communications with any parties to its proceedings, both of which are addressed in SB 215.

SB 215 is sponsored by The Utility Reform Network (TURN). “Corruption costs,” said TURN executive director Mark Toney. “We know that in the past back room deals have not only violated the public trust, but have also cost customers millions of dollars. By holding utilities and CPUC commissioners to higher standards, SB 215 will shut the back door that has been wide open to corporate executives and lobbyists in the past.”

Senator Leno commented on the two years of negotiations that led to an agreement with the Brown Administration. “I’d like to thank Governor Brown, Commissioner Randolph, and the advocates at TURN, as well as my colleagues Senators Hueso and Hill and Assemblymember Gatto for their willingness to engage on the complex and important issue of reforming the Public Utilities Commission,” said Leno. “The public’s trust in government is a precious commodity that must be enhanced and protected.”

In addition to TURN, the bill is supported by the Consumer Federation of California, Sierra Club California, and the California Environmental Justice Alliance, among others.

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