Procedural Reform at the California Public Utilities Commission (CPUC)
IMPACT:
	California Public Utilities Commission			Michael Asimow
	Legal and Policy Memorandum			2 students (Law)
	Spring 2015			Winter

Overview

The CPUC is an administrative agency headquartered in San Francisco that regulates electricity, natural gas, telecommunications, water, and transportation. Many of its decisions (both adjudicatory decisions and regulations) are of enormous importance to the California economy. The proceedings to adopt these decisions are often lengthy and complex. The CPUC has asked us to develop procedural reforms to promote transparency and efficiency in its decision making, with three areas of interest: 1) Ex parte communication rules; 2) Open Meetings law; and 3) Evidence rules. Students will work closely with the Deputy Executive Director and CPUC in deciding which of these areas to study, with future practicums continuing research in the remaining areas.

1. Ex parte communications between outsiders and PUC decision makers are prohibited in adjudicatory cases; permittedin ratemaking cases but must be disclosed; and permitted in rulemaking without disclosure. Some CPUC decision makers believe that ex parte communications are essential to enable them to properly consider different points of view and to facilitate timely decision making. Others, however, view such communications as inherently unreliable and as undermining the transparency and accountability of the agency. The CPUC is interested in studying the limitations on exparte communication through extensive qualitative interviews with stakeholders, as well as through legal research, with the goal of developing possible legislative amendments to relevant statutes and regulations.
2. Open Meetings law. The Bagley Keene Act requires the CPUC to conduct open meetings when a quorum of its five commissioners meet. Yet, Bagley Keene has, in practice, effectively prevented the CPUC from properly managing its operations and engaging in useful deliberation. The CPUC and the Little Hoover Commission are considering whether to seek an amendment to Bagley Keene inorder to permit more coordination and collaboration among CPUC Commissioners.
3. Evidence rules. The “residuum rule” requires that on judicial review of an agencydecision, the record must contain at least some evidence, other than hearsay, to support the agency’s findings and conclusions. A recent court decision asserts that the CPUC is subject to the residuum rule because it has been declared CPUC policy. Yet, a variety of evidence (such as studies by other government agencies) often comprises the underpinning of CPUC decisions and may not come under any hearsay exception. As a result, the residuum rule could compromise the efficiency of CPUC proceedings and risk reversal of future decisions on technical evidentiary grounds. The CPUC is interested in policy analysis of the agency’s need for diverse forms of evidence and in legal research on the effectiveness and intent of the residuum rule as it pertains to CPUC evidence with the goal of developing potential legislative or judicial solutions.

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