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

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Date Published: 02/16/2017 09:00 PM
SB520:v99#DOCUMENT


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 introduced, 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 effect California’s environment and consumers, and certain proceedings at the State Energy Resources Conservation and Development Commission (Energy Commission). The bill would require an organization intending to seek compensation to submit an annual notice of intent and eligibility to the Energy Commission containing specified information. The Energy Commission 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 related to participation in eligible proceedings for the prior calendar year. The bill would require the Energy Commission, 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 ISO. 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. The bill would require the Energy Commission to adopt guidelines governing the intervenor funding program at a publicly noticed meeting offering all interested parties an opportunity to comment.
This bill would require that any payment of compensation to an eligible group be made from the Intervenor Trust Fund, which would be established by the ISO upon receiving approval from the FERC. The bill would require the ISO to (1) annually consult with the Energy Commission to determine the expected amount of funding needed to support payments of compensation to eligible groups for productive participation in eligible proceedings, (2) collect sufficient moneys to support the intervenor funding program through a charge assessed on transmission-owning utilities calculated based on the utility’s proportionate share of total California load within the territory serviced by the electrical grid that is under the operational control of the ISO, and (3) deposit the funds collected into the Intervenor Trust Fund and to hold those funds in trust for the authorized purposes. If the collection of funds by the ISO is held invalid by order of any federal agency or court, the PUC, in consultation with the Energy Commission, would be required to annually determine the expected amount of funding needed to support payments of compensation to eligible groups for productive participation in eligible proceedings and to require each electrical corporation to identify and collect the anticipated intervenor funding program costs attributable to its share of California load within the territory serviced by the electrical grid that is under the operational control of the ISO. If the collection of funds by the ISO is held invalid by order of any federal agency or court, the Energy Commission would require each local publicly owned electric utility within the ISO to annually collect and remit anticipated intervenor funding program costs attributable to its proportionate share of California load within the territory serviced by the electrical grid that is under the operational control of the ISO. The bill would require that all moneys collected by the electrical corporations or local publicly owned utilities be held in a trust account by the utility, and be paid by the utility to eligible groups as directed by the Energy Commission. The bill would authorize the Energy Commission to include as a transmission-owning utility that is subject to the bill’s requirements an electrical corporation or local publicly owned electric utility that is in the process of turning over, or negotiating to turn over, operational control of its electrical transmission grid to the ISO, to the extent it serves customers within the state and, if the utility has not yet turned over operational control to the ISO, provides for separate administration of its proportionate share of intervenor compensation.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

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 effect California’s environment and consumers, and certain proceedings at the Energy Commission.

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 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.
(b) The Energy Commission shall administer the provisions of this part in a manner that encourages the effective and efficient participation of ratepayer and environmental groups that have an interest in the regulation of regional energy markets, concerns about reasonableness of rates charged to California customers, and concerns about other functions performed by the Independent System Operator that have an impact on ratepayer costs and the environment. The Energy Commission should consult with the commission in developing any guidelines pursuant to this part.
(c) Eligible groups shall be compensated for productive participation in eligible proceedings and processes as determined by the Energy 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.

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 authorized pursuant to its articles of incorporation or bylaws to represent the interests of residential or small commercial consumers that are both located in California and served by a transmission-owning utility.
(e) “Eligible proceeding” means all of the following:
(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 or local publicly owned electric utility 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, is constructive and substantive and advances positions designed to benefit California’s customers or protect California’s environment. 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 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) “Significant financial hardship” means either that the eligible group cannot afford, without undue hardship, to pay the costs of effective 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 effective participation.
(i) “Small commercial customer” means any nonresidential customer with a maximum peak demand of less than 50 kilowatts. The Energy Commission may establish regulations to modify or change the definition of “small commercial customer,” including use of criteria other than a peak demand threshold, if the Energy Commission determines that the modification or change will promote participation by organizations representing small businesses, without incorporating large commercial and industrial customers.
(j) (1) “Transmission-owning utility” means an electrical corporation or local publicly owned electric utility 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 may include as a “transmission-owning utility” an electrical corporation or local publicly owned electric utility 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. The notice shall include all of the following:
(1) A statement of the nature of the organization’s 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 shall issue a timely finding establishing whether the organization is an eligible group that may file for compensation. A finding by the Energy Commission that the organization is an eligible group does not ensure compensation. If the Energy 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 shall be deemed eligible for the year for which the submitted annual notice applies.
(2) A failure by the customer to identify a specific issue in the notice of intent or to accurately estimate potential compensation shall not preclude payment of reasonable compensation if a 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 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 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 shall determine whether the eligible group has productively participated in an eligible proceeding. If the Energy Commission finds that the eligible group requesting compensation has engaged in productive participation, the Energy Commission shall direct that the reasonable costs of participation, including advocate’s fees, expert witness fees, and associated costs be paid by the Independent System Operator from the Intervenor Trust Fund, or be paid directly by electrical corporations or local publicly owned electric utilities from moneys held in trust pursuant to subdivision (b) of Section 2607.
(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 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 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.
(j) (1) Any authorized payments shall be made from rates collected by the Independent System Operator from each transmission-owning utilities in proportion to its respective California load that receives electricity transported over the electrical grid that is under the operational control of the Independent System Operator or moneys held in trust pursuant to subdivision (b) of Section 2607. Upon approval by the Federal Energy Regulatory Commission, the Independent System Operator shall establish an Intervenor Trust Fund and deposit any moneys collected from transmission-owning utilities into the fund. The Energy Commission shall notify the Independent System Operator of the amount of moneys that it forecasts will be necessary to be collected pursuant to this part. If there are insufficient balances in the Intervenor Trust Fund for payment of all claims, the Energy Commission shall add this obligation to the forecast of moneys needed for the following year, or other time period established by the Energy Commission in consultation with the Independent System Operator, and the Independent System Operator will make payment to the eligible group once there are sufficient balances available.
(2) (A) For any electrical corporation that the Energy Commission designates to be a transmission-owning utility pursuant to paragraph (2) of subdivision (j) 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. An electrical corporation that the Energy Commission designates as a transmission-owning utility pursuant to paragraph (2) of subdivision (j) of Section 2603 may elect to pay its proportionate share to the Independent System Operator, with those moneys to be administered pursuant to paragraph (1).
(B) For any local publicly owned electric utility that the Energy Commission designates to be a transmission-owning utility pursuant to paragraph (2) of subdivision (j) of Section 2603 that has not yet turned over operational control of its electrical transmission grid to the Independent System Operator, the Energy 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. A local publicly owned electric utility that the Energy Commission designates as a transmission-owning utility pursuant to paragraph (2) of subdivision (j) of Section 2603 may elect to pay its proportionate share to the Independent System Operator, with those moneys to be administered pursuant to paragraph (1).

2606.
 (a) The Energy Commission shall adopt guidelines 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 payment, and the terms and conditions of the payment are public information.

2607.
 (a) The Independent System Operator shall do all of the following:
(1) 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.
(2) Collect sufficient moneys to support the intervenor funding program authorized pursuant to this part through a charge assessed on transmission-owning utilities. The proportionate share allocated to each transmission-owning utility shall be calculated based on its share of total California load within the territory serviced by the electrical grid that is under the operational control of the Independent System Operator. The California load of an electrical corporation or local publicly owned electric utility designated by the Energy Commission to be a transmission-owning utility pursuant to paragraph (2) of subdivision (j) of Section 2603 shall be included in calculating each transmission-owning utility’s proportionate share, but moneys collected by a utility so designated that has not yet turned over operational control of its electrical transmission grid to the Independent System Operator shall not be paid to the Independent System Operator and shall instead be administered pursuant to paragraph (2) of subdivision (j) of Section 2605, unless the utility so designated elects to pay moneys collected to the Independent System Operator pursuant to paragraph (2) of subdivision (j) of Section 2605.
(3) Deposit funds collected pursuant to this part into the Intervenor Trust Fund, hold those funds in trust for the purposes authorized in this part, and pay those funds to an eligible group upon direction by the Energy Commission.
(4) The California load of an electrical corporation or local publicly owned electric utility designated by the Energy Commission to be a transmission-owning utility pursuant to paragraph (2) of subdivision (j) of Section 2603 shall be included in calculating each transmission-owning utility’s proportionate share, but moneys collected by a utility so designated that has not yet turned over operational control of its electrical transmission grid to the Independent System Operator, or elected to pay moneys collected to the Independent System Operator pursuant to paragraph (2) of subdivision (j) of Section 2605, shall be administered pursuant to paragraph (2) of subdivision (j) of Section 2605.
(b) If the collection of funds by the Independent System Operator for the purposes described in this part is held invalid by order of any federal agency or court, the commission and Energy Commission shall do all of the following:
(1) 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. The commission shall require each electrical corporation to identify a separate rate component, which shall be a nonbypassable element of local distribution service and collected on the basis of usage, to collect the anticipated intervenor funding program costs attributable to its share of California load within the territory serviced by the electrical grid that is under the operational control of the Independent System Operator.
(2) The Energy Commission shall require each local publicly owned electric utility that is a transmission-owning utility to annually collect anticipated intervenor funding program costs attributable to its share of California load within the territory serviced by the electrical grid that is under the operational control of the Independent System Operator.
(3) All moneys collected pursuant to this subdivision shall be held in a trust account by the electrical corporation or local publicly owned electric utility, and shall be paid by the utility to eligible groups as directed by the Energy Commission.