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

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Date Published: 10/02/2019 09:00 PM
AB1072:v94#DOCUMENT

Assembly Bill No. 1072
CHAPTER 448

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

[ Approved by Governor  October 02, 2019. Filed with Secretary of State  October 02, 2019. ]

LEGISLATIVE COUNSEL'S DIGEST


AB 1072, 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-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 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 books and records of 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 a review or audit conducted in connection with a rate proceeding shall be deemed to fulfill 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 audit the books and records for regulatory purposes 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-approved general rate case cycle, if that cycle provides for a rate case no less frequently than once every five years.
(2) 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 at least once every five years.
(b) An audit conducted in connection with a rate proceeding shall be deemed to fulfill the requirements of 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.