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AB-1072 Public Utilities Commission: audits and reviews.(2019-2020)

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Date Published: 05/22/2019 09:00 PM
AB1072:v96#DOCUMENT

Amended  IN  Assembly  May 22, 2019
Amended  IN  Assembly  May 01, 2019
Amended  IN  Assembly  March 25, 2019

CALIFORNIA LEGISLATURE— 2019–2020 REGULAR SESSION

Assembly Bill
No. 1072


Introduced by Assembly Member Patterson

February 21, 2019


An act to amend Sections 314.5 and 314.6 of the Public Utilities Code, relating to the Public Utilities Commission.


LEGISLATIVE COUNSEL'S DIGEST


AB 1072, as amended, Patterson. Public Utilities Commission: audits and reviews.
Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including electrical, gas, heat, telegraph, telephone, and water corporations. The Public Utilities Act requires the commission to inspect and audit the books and records of each electrical, gas, heat, telegraph, telephone, and water corporation for regulatory and tax purposes. The act requires an inspection and audit to be done at least every 3 years if the utility has over 10,000 customers and at least every 5 years if the utility has 10,000 or fewer customers. The act alternatively authorizes the commission to inspect and audit the books and records of those utilities in accordance with the commission authorized commission-approved general rate case cycle, if that cycle provides for a rate case no less frequently than once every 5 years. The act provides that an audit conducted in connection with a rate proceeding is deemed to fulfill these requirements.
This bill would instead require the commission to review or audit, rather than inspect and audit, audit the books and records of each electrical, gas, heat, telegraph, telephone, and water corporation if the utility has over 10,000 customers and would require the commission to review or audit the utility if the utility has 10,000 or fewer customers. The bill would require these reviews or audits to be conducted for regulatory purposes, rather than regulatory and tax purposes. The bill would provide that either a review or audit conducted in connection with a rate proceeding by the applicable industry division within the commission or by the Public Advocate’s Office of the commission, rather than any audit in connection with a rate proceeding, shall be deemed to fulfill these requirements. the applicable requirements for review or audit.
Existing law authorizes the commission to conduct financial and performance audits of any entity or program created by any order, decision, motion, settlement, or other action of the commission and authorizes the commission to conduct additional followup work that is related to any findings and recommendations related to the audit. Existing law requires that the audit be completed in a timely manner consistent with the Generally Accepted Government Auditing Standards.
This bill would alternatively authorize the commission to conduct financial and performance reviews of any entity or program created by any order, decision, motion, settlement, or other action of the commission and would authorize the commission to conduct additional followup work that is related to any findings and recommendations related to the review. The bill would require that the review or audit be completed in a timely manner consistent with applicable auditing standards. The bill would require the commission, by January 15, 2020, and every year thereafter, to post on its internet website its standard practice audit manual, titled Utility Audit, Finance and Compliance Branch UAFCB Audit and Attestation Standard Practice, and updates of that manual, if any.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

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


SECTION 1.

 Section 314.5 of the Public Utilities Code is amended to read:

314.5.
 (a) (1) The commission shall review or audit the books and records for regulatory purposes as follows:
(1)At least once every three years in the case of every electrical, gas, heat, telegraph, telephone, and water corporation serving over 10,000 customers at least once every three years or in accordance with the commission authorized commission-approved general rate case cycle, if that cycle provides for a rate case no less frequently than once every five years.
(2) At least once every five years in the case The commission shall review or audit the books and records for regulatory purposes of every electrical, gas, heat, telegraph, telephone, and water corporation serving 10,000 or fewer customers. customers at least once every five years.
(b) A review or An audit conducted by the applicable industry division within the commission, or by the Public Advocate’s Office of the commission, in connection with a rate proceeding shall be deemed to fulfill the requirements of this section. paragraph (1) of subdivision (a), and a review or audit conducted in connection with a rate proceeding shall be deemed to fulfill the requirements of paragraph (2) of subdivision (a).
(c) The commission shall post reports of reviews and audits and other pertinent information on its internet website.

SEC. 2.

 Section 314.6 of the Public Utilities Code is amended to read:

314.6.
 (a) The commission may conduct financial and performance reviews or audits of any entity or program created by any order, decision, motion, settlement, or other action of the commission.
(b) The commission shall complete any review or audit in a timely manner consistent with applicable auditing standards.
(c) After performing a review or audit pursuant to this section, the commission may conduct additional followup work that is related to any findings and recommendations related to the review or audit.
(d) Beginning January 15, 2020, and every year thereafter, the commission shall post on its internet website its standard practice audit manual, titled Utility Audit, Finance and Compliance Branch UAFCB Audit and Attestation Standard Practice, and updates to that manual, if any.