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SB-520 Electricity: intervenor funding.(2017-2018)

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Date Published: 07/19/2017 09:00 PM
SB520:v97#DOCUMENT

Amended  IN  Assembly  July 19, 2017
Amended  IN  Senate  May 26, 2017

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Senate Bill No. 520


Introduced by Senator Mitchell

February 16, 2017


An act to add Part 1.5 (commencing with Section 2600) to Division 1 of the Public Utilities Code, relating to electricity.


LEGISLATIVE COUNSEL'S DIGEST


SB 520, as amended, Mitchell. Electricity: intervenor funding.
Under existing law, the Public Utilities Commission (PUC) has regulatory authority over public utilities. Existing law requires the PUC to award reasonable advocate’s fees, reasonable expert witness fees, and other reasonable costs of preparation for and participation in a hearing or proceeding of the PUC involving an electrical, gas, water, or telephone corporation to a customer who complies with specified procedures when the customer’s presentation makes a substantial contribution to the adoption, in whole or in part, of the PUC’s order or decision and where participation or intervention without an award of fees or costs imposes a significant financial hardship.
This bill would establish a mechanism to provide compensation for reasonable advocate’s fees, reasonable expert witness fees, and other reasonable costs of participation in processes of the Independent System Operator (ISO), proceedings of the Federal Energy Regulatory Commission (FERC) that affect California’s environment and consumers, and certain proceedings at the State Energy Resources Conservation and Development Commission (Energy Commission). (ISO) related to proceedings concerning transmission planning, the transmission access charge, energy markets, and regionalization. The bill would require an organization intending to seek compensation to submit an annual notice of intent and eligibility to the Energy Commission PUC containing specified information. The Energy Commission PUC would be required to timely issue a finding as to whether the organization is an eligible group, as defined, that may file for compensation. The bill would authorize an eligible group, by March 31 of each year, to file for compensation from an electrical corporation that is a transmission-owning utility, as defined, for participation in eligible proceedings for the prior calendar year. The bill would require the Energy Commission, PUC, within 90 days after the filing of the request for compensation or within 60 days after the submission of additional supporting documentation, whichever occurs later, to determine whether the eligible group has productively participated in an eligible proceeding, and if so, to direct that the reasonable costs of participation, including advocate’s fees, expert witness fees, and associated costs, as respectively defined, be paid by the electrical corporation from moneys held in trust by the electrical corporation for that purpose. The bill would require that payment be denied to any eligible group that engages in vexatious behavior or attempts to unreasonably obstruct the orderly and timely fulfillment of the responsibilities of the ISO or FERC. ISO. The bill would require the Energy Commission to adopt guidelines commission to adopt rules governing the intervenor funding program at a publicly noticed meeting offering all interested parties an opportunity to comment. The bill would require the Energy Commission , in consultation with the PUC and PUC, in consultation with the ISO, to report to all relevant policy and fiscal committees of the Legislature by January 1, 2024, 3 years after the program is implemented with sufficient information for the Legislature to determine the effectiveness of the program in achieving greater access and transparency, increasing productive participation, and minimizing negative impacts on ratepayers and the environment. The PUC’s authority to award intervenor compensation pursuant to the program would become inoperative 4 years after the program is implemented.
Under existing law, a violation of any order, decision, rule, direction, demand, or requirement of the PUC is a crime.
Because certain provisions of the bill would require an order or requirement to be imposed by the PUC upon an electrical corporation, and a violation of the order or requirement would be a crime, the bill would impose a state-mandated local program by creating a new crime.
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.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: YES  

The people of the State of California do enact as follows:


SECTION 1.

 Part 1.5 (commencing with Section 2600) is added to Division 1 of the Public Utilities Code, to read:

PART 1.5. INTERVENOR FUNDING PROGRAM FOR RELATED PROCEEDINGS

2600.
 The purpose of this part is to provide compensation for reasonable advocate’s fees, reasonable expert witness fees, and other reasonable costs of participation in processes of the Independent System Operator, proceedings of the Federal Energy Regulatory Commission that affect California’s environment and consumers, and certain proceedings at the Energy Commission. Operator related to proceedings concerning transmission planning, the transmission access charge, energy markets, and regionalization.

2601.
 In enacting this part, it is the intent of the Legislature that all of the following occur:
(a) The provisions of this part shall apply are limited in their application to processes or boards established by the Independent System Operator and proceedings at the Federal Energy Regulatory Commission, including judicial review of any decision of the Independent System Operator or Federal Energy Regulatory Commission affecting California ratepayers. relating to transmission planning, the transmission access charge, energy markets, and regionalization.
(b) The Energy Commission commission shall administer the provisions of this part in a manner that encourages the effective and efficient participation of ratepayer and environmental justice groups that have an interest in the regulation of regional energy markets, markets and concerns about the reasonableness of rates charged to California customers, and concerns about other functions performed by the Independent System Operator that have an impact on California ratepayer costs and align with California’s environmental goals. The Energy Commission should consult with the commission in developing any guidelines pursuant to this part. customers.
(c) Eligible groups shall be compensated for productive participation in eligible proceedings and processes as determined by the Energy Commission. commission.
(d) The process for finding eligibility for intervenor compensation shall be streamlined to the extent practicable.
(e) Compensation shall be paid to eligible groups in a timely manner. manner for participation in eligible proceedings for four years after implementation of the program by the commission.

2603.
 As used in this part, the following terms have the following meanings:
(a) “Advocate’s fees” means the value of work performed by employees and outside contractors of an eligible group based on the market rates paid to persons of comparable training and experience who offer similar services.
(b) “Associated costs” means reasonable out-of-pocket expenses directly incurred by an eligible group that are directly related to participation in an eligible proceeding, including travel and document production.
(c) “Compensation” means payment for reasonable advocate’s fees, reasonable expert witness fees, and other reasonable costs of preparation for and participation in an eligible proceeding, and includes the fees and costs of obtaining payment under this part.
(d) “Eligible group” means an independent nonprofit consumer, public health, social equity, or environmental organization a nonprofit organization that directly represents ratepayer interests or environmental justice communities that has a history of substantial contributions in commission proceedings and is authorized pursuant to its articles of incorporation or bylaws to represent the interests of residential or small commercial consumers ratepayers that are both located in California and served by a transmission-owning utility. For these purposes, a “nonprofit organization” means an organization described in Section 501(c)(3) of the Internal Revenue Code (26 U.S.C. Sec. 501 (c)(3)), that is exempt from taxation under Section 501(a) of that code (26 U.S.C. Sec. 501(a)).
(e) “Eligible proceeding” means all of the following: a proceeding of the Independent System Operator concerning transmission planning, the transmission access charge, energy markets, or regionalization.

(1)Formal and informal processes, committees, or boards established or relied upon by the Independent System Operator.

(2)Any activity at the Federal Energy Regulatory Commission relating to policies, rules, tariffs, or practices affecting the Independent System Operator as to which substantive and constructive intervention by the intervening group is possible.

(3)Any activity at the Federal Energy Regulatory Commission relating to any proposal that affects the rates charged by an electrical corporation to California customers as to which substantive and constructive intervention by the intervening group is possible.

(4)Proceedings at the Energy Commission that relate to transmission planning issues, including the development of an integrated energy policy report pursuant to Section 25302 of the Public Resources Code.

(5)Judicial review of any determination or tariff proposal made by the Independent System Operator or any decision by the Federal Energy Regulatory Commission affecting the Independent System Operator.

(f) “Expert witness fees” means costs incurred by an eligible group for an expert witness based on the market rates paid to persons of comparable training and experience who offer similar services.
(g) “Productive participation” means participation in an eligible proceeding that, in the judgment of the Energy Commission, commission, is constructive and substantive and advances positions designed to benefit California’s electrical service customers and align with California’s environmental goals. An eligible group shall be found to have engaged in productive participation if it is the prevailing party in an action seeking judicial review of any decision by the Independent System Operator or the Federal Energy Regulatory Commission with respect to an eligible proceeding. The Energy Commission The commission shall adopt guidelines regarding the standards applicable to “productive participation” that recognize the informal nature of many eligible proceedings, the absence of final determinations, and the lack of any official record referencing contributions made by individual organizations.
(h) “Program” means the intervenor funding program adopted pursuant to this part.
(i) “Significant financial hardship” means either that the eligible group cannot afford, without undue hardship, to pay the costs of participation, including advocate’s fees, expert fees, and other reasonable costs of participation, or that, in the case of a group or organization, the economic interest of the individual members of the group or organization is small in comparison to the costs of participation.
(j) “Small commercial customer” ratepayer” means any nonresidential customer ratepayer with a maximum peak demand of less than 50 kilowatts. The Energy Commission commission may establish regulations to modify or change rules modifying or changing the definition of “small commercial customer,” ratepayer,” including use of criteria other than a peak demand threshold, if the Energy Commission commission determines that the modification or change will promote participation by organizations representing small businesses, without incorporating large commercial and industrial customers.
(k) (1) “Transmission-owning utility” means an electrical corporation that owns a portion of the electrical transmission grid that is under the operational control of the Independent System Operator that is used to supply customers residing in California with electric service.
(2) The Energy Commission commission may include as a “transmission-owning utility” an electrical corporation that is in the process of turning over, or negotiating to turn over, operational control of its electrical transmission grid to the Independent System Operator, to the extent it serves customers within the state.

2605.
 (a) An organization intending to seek payment pursuant to this part shall submit an annual notice of intent and eligibility to the Energy Commission. commission. The notice shall include all of the following:
(1) A statement of the nature of the organization’s expertise and expected participation in eligible proceedings based on information available at the time of the filing.
(2) An itemized estimate of the compensation that the organization expects to request given the information known at the time of the filing.
(3) A showing that the organization is an eligible group and satisfies the eligibility requirements of this part.
(4) A showing that participation in the eligible proceedings would pose a significant financial hardship. Alternatively, a showing that participation in the eligible proceedings would pose a significant financial hardship shall be included in the request submitted pursuant to subdivisions (c) and (d).
(b) (1) The Energy Commission commission shall issue a timely finding establishing whether the organization is an eligible group that may file for compensation. A finding by the Energy Commission commission that the organization is an eligible group does not ensure compensation. If the Energy Commission commission does not issue a finding within 90 days after the submission of a notice of intent and eligibility, any organization previously found to be eligible by the Energy Commission commission shall be deemed eligible for the year for which the submitted annual notice applies.
(2) A failure by the organization to identify a specific issue in the notice of intent and eligibility or to accurately estimate potential compensation shall not preclude payment of reasonable compensation if productive participation in an eligible proceeding is subsequently demonstrated.
(c) Not later than March 31 of each year, an eligible group that has been found, pursuant to subdivision (b), to be eligible for compensation in the prior year may file for costs related to participation in eligible proceedings for the prior calendar year.
(d) A request for compensation shall, at a minimum, include a detailed description of services and expenditures and a description of the eligible group’s productive participation in the eligible proceeding.
(e) The Energy Commission commission may audit the timesheets and records of costs of the eligible group to the extent necessary to verify the basis for the payment. The Energy Commission commission shall preserve the confidentiality of the eligible group’s records in performing the audit.
(f) Within 90 days after the filing of a request for compensation pursuant to subdivision (c), or within 60 days after the submission of requested additional supporting documentation, whichever occurs later, the Energy Commission commission shall determine whether the eligible group has productively participated in an eligible proceeding. If the Energy Commission commission finds that the eligible group requesting compensation has engaged in productive participation, the Energy Commission commission shall direct that the reasonable costs of participation, including advocate’s fees, expert witness fees, and associated costs be paid from transmission-owning utility moneys held in trust pursuant to Section 2608.
(g) The computation of compensation pursuant to subdivision (f) shall be based upon the market rates paid to persons of comparable training and experience who offer similar services and reasonable market rates for any associated costs.
(h) The Energy Commission commission shall ensure that any compensation sought by an eligible group has not been obtained from another intervenor funding program within, or outside of, California.
(i) The Energy Commission commission shall deny payment to any eligible group that engages in vexatious behavior or attempts to unreasonably obstruct the orderly and timely fulfillment of the responsibilities of the Independent System Operator or the Federal Energy Regulatory Commission. No eligible group that is the prevailing party in an action seeking judicial review shall be denied compensation for work in obtaining that review pursuant to this subdivision. Operator.
(j) Payments made pursuant to this part, the amount of the payments, and the terms and conditions of the payments are public information.

2606.
 (a) The Energy Commission shall adopt guidelines The commission shall adopt rules governing the intervenor funding program authorized under this part at a publicly noticed meeting offering all interested parties an opportunity to comment. Substantive changes to the guidelines shall not be adopted without at least 10 days’ written notice to the public. The public notice of meetings required by this subdivision shall not be less than 30 days. Notwithstanding any other law, adoption of these guidelines is exempt from the requirements of Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, but the guidelines may be adopted as regulations pursuant to that chapter.

(b)Payments made pursuant to this part are subject to appeal to the Energy Commission upon a showing that factors other than those adopted in the guidelines were applied to determine the payments. Any actions taken by an applicant to apply for, or become or remain eligible to receive, payments, including satisfying conditions specified by the Energy Commission, shall not constitute the rendering of goods, services, or a direct benefit to the Energy Commission.

(c)Payments made pursuant to this part, the amount of the payments, and the terms and conditions of the payments are public information.

2607.
 (a) The commission shall consult with the Energy Commission annually to determine the expected amount of funding needed to support payments of compensation to eligible groups for productive participation in eligible proceedings pursuant to this part. require each transmission-owning utility to identify a separate rate component, which shall be a nonbypassable element of its local distribution service and collected on the basis of usage, to collect the anticipated program costs attributable to its proportionate share of California load served by transmission-owning utilities.

(b)The commission shall require each transmission-owning utility to identify a separate rate component, which shall be a nonbypassable element of its local distribution service and collected on the basis of usage, to collect the anticipated program costs attributable to its proportionate share of California load served by transmission-owning utilities.

(c)

(b) For any electrical corporation that the Energy Commission commission designates to be a transmission-owning utility pursuant to paragraph (2) of subdivision (k) of Section 2603 that has not yet turned over operational control of its electrical transmission grid to the Independent System Operator, upon request by the Energy Commission, the commission shall direct the utility to collect and hold its proportionate share in trust, to be disbursed to an eligible group or eligible groups upon direction by the Energy Commission. commission.

2608.
 All moneys collected pursuant to this part shall be held in a trust account by the transmission-owning utility, and shall be paid by the utility to eligible groups as directed by the Energy Commission. commission.

2609.
 (a) On or before January 1, 2024, the Energy Commission, in consultation with the commission and Three years after implementation of the program, the commission, in consultation with the Independent System Operator, shall report the information required in subdivision (b) to all relevant policy and fiscal committees of the Legislature, or their successors, including the following:
(1) Senate Committee on Energy, Utilities and Communications.
(2) Senate Committee on Appropriations.
(3) Subcommittee Number 2 (Resources, Environmental Protection, Energy and Transportation) of the Senate Committee on Budget and Fiscal Review.
(4) Assembly Committee on Utilities and Energy.
(5) Assembly Committee on Appropriations.
(6) Subcommittee Number 3 (Resources and Transportation) of the Assembly Committee on Budget.
(b) The report shall include information necessary to aid the Legislature to determine the effectiveness of the program in achieving greater access and transparency, increasing productive participation, and minimizing negative impacts on ratepayers and the environment. At a minimum, the report shall include the following:
(1) The number of organizations that submitted an annual notice of intent and eligibility.
(2) For each organization to which intervenor compensation was awarded, the organization’s name and location, a description of the organization, and the nature of participation by the organization.
(3) A list of proceedings for which intervenor compensation was provided.
(4) A list of activities for which intervenor compensation was provided.
(5) Any outcomes determined to be beneficial to ratepayers, energy transmission performance or rates, or the environment resulting from the program.
(6) Challenges to implementation of the program and, to the extent available, solutions to those challenges.
(7) Costs incurred by the Energy Commission to administer the program.
(8) To the extent they exist, recommendations regarding the future of the program, including whether it should be continued and any programmatic changes that require legislation to implement.
(c) The commission may aggregate some or all of the information required to be reported pursuant to subdivision (b) if it finds that the information will be sufficient for the Legislature to determine the effectiveness of the program in achieving greater access and transparency, increasing productive participation, and minimizing negative impacts on ratepayers and the environment.

(d)This section shall remain in effect only until January 1, 2025, and as of that date is repealed, unless a later enacted statute that is enacted before January 1, 2025, deletes or extends that date.

2610.
 (a) The commission’s authority to award intervenor compensation pursuant to this part shall become inoperative four years after the date the program is implemented by the commission, unless a later enacted statute that is enacted before that date extends the authority of the commission to award intervenor compensation pursuant to this part.
(b) Within 30 days of the adoption of final rules implementing the program, the commission shall notify the Secretary of State and the Legislative Counsel of the date the program was or will be implemented.
(c) The commission shall notify the Secretary of State and the Legislative Counsel when the commission files the report required pursuant to Section 2609.

SEC. 2.

 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.