Code Section Group

Public Utilities Code - PUC

DIVISION 1. REGULATION OF PUBLIC UTILITIES [201 - 3260]

  ( Division 1 enacted by Stats. 1951, Ch. 764. )

PART 1. PUBLIC UTILITIES ACT [201 - 2120]

  ( Part 1 enacted by Stats. 1951, Ch. 764. )

CHAPTER 5. Certificates of Public Convenience and Necessity [1001 - 1102]

  ( Chapter 5 enacted by Stats. 1951, Ch. 764. )

ARTICLE 1. Specified Utilities [1001 - 1013]
  ( Article 1 enacted by Stats. 1951, Ch. 764. )

1001.
  

No railroad corporation whose railroad is operated primarily by electric energy, street railroad corporation, gas corporation, electrical corporation, telegraph corporation, telephone corporation, water corporation, or sewer system corporation shall begin the construction of a street railroad, or of a line, plant, or system, or of any extension thereof, without having first obtained from the commission a certificate that the present or future public convenience and necessity require or will require such construction.

This article shall not be construed to require any such corporation to secure such certificate for an extension within any city or city and county within which it has theretofore lawfully commenced operations, or for an extension into territory either within or without a city or city and county contiguous to its street railroad, or line, plant, or system, and not theretofore served by a public utility of like character, or for an extension within or to territory already served by it, necessary in the ordinary course of its business. If any public utility, in constructing or extending its line, plant, or system, interferes or is about to interfere with the operation of the line, plant, or system of any other public utility or of the water system of a public agency, already constructed, the commission, on complaint of the public utility or public agency claiming to be injuriously affected, may, after hearing, make such order and prescribe such terms and conditions for the location of the lines, plants, or systems affected as to it may seem just and reasonable.

(Amended by Stats. 1981, Ch. 573, Sec. 2.)

1001.5.
  

(a) The commission shall exempt the construction of any line, plant, or system, or extension thereof, located outside the boundaries of the state from the requirements of Section 1001, upon the application of the public utility constructing that line, plant, or system, or extension thereof, if the public utility derives 75 percent or more of its operating revenues from outside the state, as recorded in the fiscal period immediately before the filing of the application, unless the commission determines that the public interest requires that the construction should not be exempt from Section 1001.

(b) Except as provided in subdivision (c), the commission shall make the determination denying the exemption, as specified in subdivision (a), within 90 days after the public utility files the application for exemption with the commission. If the commission fails to make this determination within that 90-day period, the construction of that line, plant, or system, or extension thereof, is exempt from the requirements of Section 1001.

(c) The commission and the public utility filing the application for exemption may, if both agree, extend the time period within which the commission is required to make the determination denying the exemption, for not more than an additional 60 days after the expiration of the 90-day period specified in subdivision (b).

(Added by Stats. 1983, Ch. 971, Sec. 2. Effective September 21, 1983.)

1002.
  

(a) The commission, as a basis for granting any certificate pursuant to Section 1001 shall give consideration to the following factors:

(1) Community values.

(2) Recreational and park areas.

(3) Historical and aesthetic values.

(4) Influence on environment, except that in the case of any line, plant, or system or extension thereof located in another state which will be subject to environmental impact review pursuant to the National Environmental Policy Act of 1969 (Chapter 55 (commencing with Section 4321) of Title 42 of the United States Code) or similar state laws in the other state, the commission shall not consider influence on the environment unless any emissions or discharges therefrom would have a significant influence on the environment of this state.

(b) With respect to any thermal powerplant or electrical transmission line for which a certificate is required pursuant to the provisions of Division 15 (commencing with Section 25000) of the Public Resources Code, no certificate of public convenience and necessity shall be granted pursuant to Section 1001 without such other certificate having been obtained first, and the decision granting such other certificate shall be conclusive as to all matters determined thereby and shall take the place of the requirement for consideration by the commission of the four factors specified in subdivision (a) of this section.

(Added by Stats. 1981, Ch. 573, Sec. 3.)

1002.3.
  

In considering an application for a certificate for an electric transmission facility pursuant to Section 1001, the commission shall consider cost-effective alternatives to transmission facilities that meet the need for an efficient, reliable, and affordable supply of electricity, including, but not limited to, demand-side alternatives such as targeted energy efficiency, ultraclean distributed generation, as defined in Section 353.2, and other demand reduction resources.

(Added by Stats. 2005, Ch. 366, Sec. 5. Effective January 1, 2006.)

1002.5.
  

In issuing a certificate of convenience and necessity for additional natural gas pipeline capacity proposed for construction within this state, the commission shall consider the state’s need to provide sufficient and competitively priced natural gas supplies for both present and anticipated future residential, industrial, commercial, and utility demand. When it finds that it is in the state’s best interests to do so, the commission shall expeditiously issue certificates of convenience and necessity for those additional natural gas pipeline capacity projects.

(Added by Stats. 1990, Ch. 896, Sec. 1.)

1003.
  

Every electrical and every gas corporation submitting an application to the commission for a certificate authorizing the new construction of any electric plant, line, or extension, or gas plant, line, or extension, not subject to the provisions of Chapter 6 (commencing with Section 25500) of Division 15 of the Public Resources Code, shall include all of the following information in the application in addition to any other required information:

(a) Preliminary engineering and design information on the project. The design information provided for thermal electric plants shall include preliminary data regarding the operating characteristics of the proposed plant, including, but not limited to, the annual capacity factor, availability factor, and the heat rate for each year of the useful life of the plant, line, or extension.

(b) A project implementation plan showing how the project would be contracted for and constructed. This plan shall show how all major tasks would be integrated and shall include a timetable identifying the design, construction, completion, and operation dates for each major component of the plant, line, or extension.

(c) An appropriate cost estimate, including preliminary estimates of the costs of financing, construction, and operation, including fuel, maintenance, and dismantling or inactivation after the useful life of the plant, line, or extension.

(d) A cost analysis comparing the project with any feasible alternative sources of power. The corporation shall demonstrate the financial impact of the plant, line, or extension construction on the corporation’s ratepayers, stockholders, and on the cost of the corporation’s borrowed capital. The cost analyses shall be performed for the projected useful life of the plant, line, or extension, including dismantling or inactivation after the useful life of the plant, line, or extension.

(e) A design and construction management and cost control plan which indicates the contractual and working responsibilities and interrelationships between the corporation’s management and other major parties involved in the project. This plan shall also include a construction progress information system and specific cost controls.

(Added by Stats. 1982, Ch. 1253, Sec. 2.)

1003.5.
  

Every electrical and gas corporation submitting an application to the commission for a certificate authorizing the new construction of an electric plant, line, or extension, or gas plant, line, or extension, which is subject to the provisions of Chapter 6 (commencing with Section 25500) of Division 15 of the Public Resources Code, shall include in the application the information specified in subdivisions (b), (c), and (e) of Section 1003, in addition to any other required information. The corporation may also include in the application any other information specified in Section 1003.

(Added by Stats. 1982, Ch. 1253, Sec. 3.)

1004.
  

Before any certificate may issue, under this article, a certified copy of its articles of incorporation or charter, if the applicant is a corporation, shall be filed in the office of the commission. Every applicant for a certificate shall file in the office of the commission such evidence as is required by the commission to show that the applicant has received the required consent, franchise, or permit of the proper county, city and county, city, or other public authority.

(Enacted by Stats. 1951, Ch. 764.)

1005.
  

(a) The commission may, with or without hearing, issue the certificate as prayed for, or refuse to issue it, or issue it for the construction of a portion only of the contemplated street railroad line, plant, or system, or extension thereof, or for the partial exercise only of the right or privilege, and may attach to the exercise of the rights granted by the certificate such terms and conditions, including provisions for the acquisition by the public of the franchise or permit and all rights acquired thereunder and all works constructed or maintained by authority thereof, as in its judgment the public convenience and necessity require; provided, however, upon timely application for a hearing by any person entitled to be heard thereat, the commission, before issuing or refusing to issue the certificate, shall hold a hearing thereon.

(b) When the commission issues a certificate for the new construction of a gas or electric plant, line, or extension, the certificate shall specify the operating and cost characteristics of the plant, line, or extension, including, but not limited to, the size, capacity, cost, and all other characteristics of the plant, line, or extension which are specified in the information which the gas and electrical corporations are required to submit, pursuant to Section 1003 or 1003. 5.

(Amended by Stats. 1982, Ch. 1253, Sec. 4.)

1005.1.
  

(a) The commission shall issue a decision on an application for a certificate within 18 months of the date of filing of the completed application, when all of the following are true:

(1) The application is for a certificate for building or upgrading an electrical transmission line that the commission finds necessary to provide transmission to load centers for electricity generated in a high priority renewable energy zone or is reasonably necessary to facilitate achievement of the renewables portfolio standard established in Article 16 (commencing with Section 399.11) of Chapter 2.3.

(2) The commission has considered all of the following:

(A) The utilization of rights-of-way by upgrading existing transmission facilities instead of building new transmission facilities, where technically and economically justifiable.

(B) The expansion of existing rights-of-way, if technically and economically feasible, when construction of new transmission lines is required.

(C) The creation of new rights-of-way when justified by environmental, technical, and economic reasons.

(D) The availability of cost-effective alternatives to transmission, such as energy efficiency measures and distributed generation.

(3) The commission has not expressly found any of the following:

(A) That the investment is not reasonable and necessary to maintain or enhance reliability of the transmission grid.

(B) That the building or upgrading of the electrical transmission line will not maintain or enhance efficient use of the transmission grid.

(C) That the transmission line fails to meet other applicable standards and requirements for approval and construction.

(b) An extension of time may be granted by the commission if it finds the extension is necessary for completion of review pursuant to the California Environmental Quality Act (Division 13 (commencing with Section 21000) of the Public Resources Code).

(Added by Stats. 2011, 1st Ex. Sess., Ch. 1, Sec. 33. (SB 2 1x) Effective December 10, 2011.)

1005.5.
  

(a) Whenever the commission issues to an electrical or gas corporation a certificate authorizing the new construction of any addition to or extension of the corporation’s plant estimated to cost greater than fifty million dollars ($50,000,000), the commission shall specify in the certificate a maximum cost determined to be reasonable and prudent for the facility. The commission shall determine the maximum cost using an estimate of the anticipated construction cost, taking into consideration the design of the project, the expected duration of construction, an estimate of the effects of economic inflation, and any known engineering difficulties associated with the project.

(b) After the certificate has been issued, the corporation may apply to the commission for an increase in the maximum cost specified in the certificate. The commission may authorize an increase in the specified maximum cost if it finds and determines that the cost has in fact increased and that the present or future public convenience and necessity require construction of the project at the increased cost; otherwise, it shall deny the application.

(c) After construction has commenced, the corporation may apply to the commission for authorization to discontinue construction and recover those costs which were reasonably and prudently incurred. After a showing to the satisfaction of the commission that the present or future public convenience and necessity no longer require the completion of construction of the project, the commission may authorize discontinuance of construction and the recovery of those construction costs which were reasonable and prudent.

(d) In any decision establishing rates for an electrical or gas corporation reflecting the reasonable and prudent costs of the new construction of any addition to or extension of the corporation’s plant, when the commission has found and determined that the addition or extension is used and useful, the commission shall consider whether or not the actual costs of construction are within the maximum cost specified by the commission.

(Added by Stats. 1985, Ch. 926, Sec. 2.)

1006.
  

When a complaint has been filed with the commission alleging that a public utility of the class specified in Section 1001 is engaged or is about to engage in construction work without having secured from the commission a certificate of public convenience and necessity as required by this article, the commission may, with or without notice, make its order requiring the public utility complained of to cease and desist from such construction until the commission makes and files its decision on the complaint or until the further order of the commission.

(Enacted by Stats. 1951, Ch. 764.)

1006.5.
  

The commission may, after notice and hearing, prior to authorizing any water or sewer system corporation having annual gross operating revenues under two hundred thousand dollars ($200,000) to construct, operate, acquire, expand, or improve its line, plant, or system, prescribe, as a condition to granting such authority, that the corporation file with the commission a bond with sufficient sureties, subject to approval of the commission, in a reasonable amount not exceeding fifty thousand dollars ($50,000) payable to the commission and conditioned on the corporation’s furnishing adequate and sufficient service within its service area. The commission may, after notice and hearing, declare all or any part of the bond forfeited after finding that the corporation has willfully failed to furnish adequate and sufficient service without just cause or excuse and that such failure has continued for an unreasonable duration. Such bond shall further provide for payment to the commission of the amount of any penalty assessed against the corporation pursuant to Section 2107. The commission may, upon petition by a water or sewer system corporation, for good cause, reduce the amount or eliminate the requirement of any bond which it has required to be filed pursuant to this section.

(Added by Stats. 1980, Ch. 1078, Sec. 3.)

1007.
  

No corporation or person shall begin to operate or cause to be operated any vessel for the transportation of persons or property, for compensation, between points in this state, without first having obtained from the commission a certificate declaring that public convenience and necessity require such operation, but no such certificate shall be required as to termini between which any such corporation or person is lawfully operating vessels in good faith under this part as it existed prior to August 17, 1923, under tariffs and schedules of such corporations or persons, lawfully on file with the commission. Every applicant for such a certificate shall file in the office of the commission application and evidence in the form required by the commission. The commission may, with or without hearing, issue the certificate as prayed for, or refuse to issue it, or issue it for the partial exercise only of the privilege sought, or issue it for operation between certain points only, and may attach to the exercise of the rights granted by the certificate such terms and conditions as, in its judgment, the public convenience and necessity require.

(Amended by Stats. 1979, Ch. 578.)

1007.5.
  

The commission, in the exercise of the jurisdiction conferred upon it by the Constitution of the state and by this part, and consistent with Section 9 of Article I of the California Constitution and Section 10 of Article I of the United States Constitution, may grant certificates of public convenience and necessity, make decisions and orders, and prescribe rules affecting vessel common carriers notwithstanding the provisions of any ordinance, permit, or franchise of any city, county, or other political subdivision of this state, and in the case of conflict between any certificate, decision, order, or rule of the commission and any ordinance, permit, or franchise, the certificate, decision, order, or rule of the commission shall prevail.

(Amended by Stats. 1994, Ch. 146, Sec. 184. Effective January 1, 1995.)

1008.
  

Any municipal corporation or port district operating or maintaining a port may apply to the commission for the issuance of a certificate of convenience and necessity to require any person or corporation operating vessels between points in this State, to serve that port. The commission may, after hearing, issue the certificate as prayed for, or refuse to issue it, or issue it for the partial exercise of the rights granted by any such certificate, upon such terms and conditions as in its judgment the public convenience and necessity require, and upon making the order the person or corporation to which the certificate is issued, shall be compelled to perform the service.

(Enacted by Stats. 1951, Ch. 764.)

1009.
  

Any right, privilege, franchise, or permit held, owned or obtained by any person or corporation for the operation of vessels between points in this State may be sold, assigned, leased, transferred, or inherited as other property, only upon authorization by the commission. The commission may at any time for a good cause suspend, and upon notice to the grantee of any certificate or operative right and opportunity to be heard revoke, alter, or amend any certificate or operative right issued or existing under the provisions of Sections 1007 or 1008.

(Enacted by Stats. 1951, Ch. 764.)

1011.
  

The provisions of this article are enacted under the State’s reserved power over public utilities or corporations, or both, as the case may be, for the purpose of acting on the right of the grantee of a public utility franchise granted by a city, county, or city and county, to exercise rights thereunder, and not for the purpose of acting on the right of any city or city and county to grant any such franchise. The Legislature hereby declares that the provisions of this article shall remain in full force and effect concurrently with the right of any city or city and county to grant franchises for public utilities upon the terms and conditions and in the manner prescribed by law.

(Enacted by Stats. 1951, Ch. 764.)

1013.
  

(a) The commission may by rule or order, partially or completely exempt certain telecommunications services offered by telephone and telegraph corporations from the certification requirements of Section 1001 and instead subject them to registration as the commission may determine. Telephone corporations that the commission determines have monopoly power or market power in a relevant market or markets shall have a certificate of public convenience and necessity and shall not be eligible for designation as registered telephone corporations. A telephone corporation that has been found not to have monopoly power or market power in a relevant market or markets by the commission shall be eligible for registration subject to the approval of the commission. A telephone corporation operating in this state shall either have a certificate of public convenience and necessity or be registered under this section or be a telephone corporation authorized to operate in California without a certificate of public convenience and necessity.

(b) Registered telephone corporations qualifying under this section shall maintain an active registration with the commission at all times and comply with commission rules and regulations established for registered telephone corporations qualifying under this section.

(c) The registration of registered telephone corporations qualifying under this section shall be on a form prescribed by the commission and shall contain any information the commission may by rule or order require, but shall include as a minimum the name and address of the telephone corporation’s registered agent, if any, the name, address, and title of each officer or director, and a description of the telecommunications services it offers or intends to offer.

(d) Prior to designating any telephone corporation for registration status, the commission shall adopt rules to do both of the following:

(1) Verify the financial viability of the corporation.

(2) Verify that the officers of the corporation have no prior history of committing fraud on the public.

(e) The commission shall require as a precondition to registration the procurement of a performance bond sufficient to cover taxes or fees, or both, collected from customers and held for remittance and advances or deposits the telecommunications company may collect from its customers, or order that those advances or deposits be held in escrow or trust.

(f) The commission may require, as a precondition to registration, the procurement of a performance bond sufficient to facilitate the collection of fines, penalties, and restitution related to enforcement actions that can be taken against a telecommunications company.

(g) The commission may, with or without a hearing, grant a telephone corporation registration status and an exemption from the certification requirements of Section 1001. However, upon timely application, any person entitled to be heard may file a protest on whether a telephone corporation should be eligible for registration status and the granting of an exemption from the certification requirement of Section 1001. Upon a determination that the protest has presented a prima facie case that a telephone corporation should not be granted registration status and an exemption from Section 1001, a hearing shall be held.

(h) The commission, after notice and a hearing if requested, may cancel, revoke, or suspend the registration of any telephone corporation upon any of the following grounds:

(1) The corporation does not provide the information required by this article.

(2) The corporation fails to provide or maintain a performance bond.

(3) The corporation conducts any illegal telephone operations.

(4) The corporation violates any of the applicable provisions of this code or of any regulations issued thereunder.

(5) The corporation violates any order, decision, rule, regulation, direction, demand, or requirement established by the commission under this code.

(6) The corporation fails to pay any fee or fine imposed upon the utility under this code.

(7) The corporation files a false statement to the commission.

(8) The corporation knowingly defrauds a customer.

(i) As an alternative to the cancellation, revocation, or suspension of a registration, the commission, after notice and a hearing, may impose upon the holder of the registration a fine in an amount not to exceed twenty thousand dollars ($20,000) for each offense, and order reparations and restitution to customers for each offense.

(j) Every violation of this section or any part of any order, decision, decree, rule, direction, demand, or requirement of the commission, by any telephone corporation or person is a separate and distinct offense, and in case of a continuing violation each day’s continuance thereof shall be a separate and distinct offense.

(k) In construing and enforcing this section relating to penalties, the act, omission, or failure of any officer, agent, or employee of any registered telephone corporation qualifying under this section acting within the scope of his or her official duties or employment, shall in every case be the act, omission, or failure of the corporation. The commission may assess interest to commence upon the day the payment is delinquent. All fines, assessments, and interest collected shall be deposited at least once each month in the General Fund.

(l) Actions to enforce the decision of the commission ordering the payment of fines, reparations, or restitution under this section shall be brought in the name of the people of the State of California, in the superior court of the county, or city and county, in which the corporation complained of, if any, has its principal place of business, or in which the person, if any, complained of, resides or in which the commission has offices. The enforcement of a commission decision or order under this section shall be commenced and prosecuted to final judgment by the attorney of the commission.

(m) The provisions of this section do not apply to commercial mobile radio service.

(Amended by Stats. 2008, Ch. 552, Sec. 5. Effective January 1, 2009.)

PUCPublic Utilities Code - PUC