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CETF audit, more CPUC reforms approved by California legislature

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A second round of California Public Utilities Committee reorganisation was approved in the final hours of the legislative session on Friday night. Senate bills 19 and 385 are heading to the governor’s desk. The main one is SB 19, carried by senator Jerry Hill (D – San Mateo), who has been deeply involved in CPUC reform efforts ever since a massive, fatal explosion of a PG&E pipeline in San Bruno in 2010.

There are general changes that affect the way the commission does business overall. Area code assignments aside, none specifically relate to the way telecommunication services or companies are regulated.

SB 19 expands the commission’s audit responsibilities, and a legislative staff analysis makes it clear that the broadband-focused California Emerging Technology Fund is a primary target…

The CPUC has often negotiated settlements, particularly related to mergers of companies, which create new entities or programs. For example, the California Emerging Technology Fund (CETF) was developed and funded as a separate nonprofit entity by the CPUC through the approved mergers between SBC-AT&T and Verizon-MCI. Last year, [former assemblyman Mike Gatto] requested an audit of the CETF. However, the CPUC had suggested that they lack the statutory authority to conduct an audit of CETF and other similarly constructed entities.

This bill will ensure the CPUC has the statutory authority to conduct such audits and require the audits are conducted in a manner that adheres to approved general auditing practices.

Other changes include banning public utility executives from becoming CPUC commissioners for “two years after leaving the employment of the utility”. Commissioners would directly appoint the chief administrative law judge and a chief internal auditor. The job of staff ethics officer would be baked into law and the public advisor’s office would be responsible for handling complaints about the way the commission does business.

Some of the CPUC’s transportation-related duties would be transferred to other state departments, including regulation of moving companies, private buses, and some water transportation and passenger aircraft. The changes seem to be consistent with governor Brown’s wishes and it’s a good bet he’ll approve both bills.

Telecoms left out of new CPUC reform bill

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California Public Utilities Commission reforms are back on the table in Sacramento, but the latest proposal doesn’t include anything specific about review or reorganisation of how telecommunications companies are regulated. Senate bill 19 was introduced by senator Jerry Hill (D – San Bruno) as new lawmakers were sworn in and the new legislative session began last week. He is the sole survivor of the trio that negotiated with governor Brown to come to agreement on a package of bills aimed at overhauling the CPUC last year. The other two – senator Mark Leno (D – San Francisco) and assemblyman Mike Gatto (D – Los Angeles) – left office because they had run out the clock on their term limits.

Some of those bills didn’t pass. When the governor signed the bills that did make it to his desk, he added some instructions, telling the head of the state transportation agency to start the process of taking over some of the CPUC’s transportation related oversight duties and asking the CPUC to “work with the California Research Bureau to study the governance of telecommunications service”. Both were key items in the bills that failed.

As introduced by Hill, SB 19 puts a legislative stamp of approval on the governor’s executive transfer of transportation regulation away from the CPUC, but it says nothing about reviewing how telecoms are regulated. He seems content to let the CPUC and the state library, which runs the research bureau, plug away at it on their own.

Other measures that did make it into the bill include tighter ethics requirements, not least of which is a rule that creates a two year waiting period before former utility executives can be appointed to a seat on the commission, and easier access to help and information, including a provision making it easier for the public to sue for access to CPUC records.