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California Governor, Lawmakers Pursue Sweeping Regulatory Reforms

California Gov. Jerry Brown and state lawmakers on Monday rolled out a package of proposals they labeled as "sweeping reforms" for the five-member California Public Utilities Commission (CPUC).

Brown and leaders from the Democratic majority-dominated state legislature said they intend to change how the CPUC does business. Utility watchdog group The Utility Reform Network (TURN) declared the announcement to be a victory for the group's effort to push state legislation (SB 215) seeking CPUC reform.

A CPUC spokesperson said the proposed reforms represent "a new chapter" for the regulatory body, and they will "allow the focus to return to the work of our dedicated staff in providing for a safe and productive California."

Brown and two Northern California state senators sponsoring SB 215, Sens. Jerry Hill and Mark Leno, issued a long list of reform principles -- governance, accountability, transparency, and oversight/safety -- which are embedded in the proposed legislation. Leno, a Democrat from San Francisco, called the principles "a blueprint for a CPUC that is focused, efficient, working in the public interest, and most notably, transparent and accountable."

Hill represents the suburbs south of San Francisco, including San Bruno where a Pacific Gas and Electric Co. (PG&E) high-pressure, large-diameter gas transmission pipeline ruptured and exploded in September 2010, prompting the start of a crusade to chip away at CPUC authority (see Daily GPIApril 7, 2011).

Brown said the reforms will expand public access to CPUC meetings and records, create new safety and oversight positions, and "ex parte communications rules will be strengthened."

Assemblyman Mike Gatto, chair of the lower legislative body's Energy and Commerce Committee, joined the two senators and Brown in unveiling the reform package. Earlier this year, Gatto released an effort to change the state's constitution to shut down the CPUC (see Daily GPIFeb. 4).

Gatto's proposal would disperse to a variety of agencies the CPUC's current authority over natural gas, electric, water and telecommunications utilities, along with trains, public transit and taxis, leaving the successor as perhaps only a gas/electric regulatory body.

Gatto has promised to make the CPUC "more transparent and accountable, and focused on the safety of our communities."

The reforms outlined Monday appear to be headed in the same direction as Gatto's proposal earlier this year. All transportation functions would be moved elsewhere, and the telecommunications oversight would be rethought in an assessment mandated by Jan. 1, 2018.

Included in governance reforms would be a prohibition against regulated utility executives serving as a decision-making member of the CPUC for two years and various curbs on ex parte communications violations enforced by the state attorney general (see Daily GPISept. 19, 2014). In oversight/safety, an ombudsperson position would be created at the regulatory panel and a deputy director the CPUC would be created with the power to "red tag" unsafe facilities, processes or activities.

This high-level-backed reform package comes less than two years after the controversial reign of a former energy utility senior executive, Michael Peevey, who led the CPUC as president for 12 years with the backing of both Brown and former Gov. Arnold Schwarzenegger. The pipeline explosion in San Bruno and the ex parte controversy both occurred in the latter years of the tenure of Peevey, who has been the subject both state and federal investigations (see Daily GPIFeb. 2, 2015). Peevey's wife, Carol Liu, has been a longtime state lawmaker now serving in the Senate.

"The governor's office will work closely with the legislature and impacted entities in the administration to move forward with these reforms in the months ahead," a Sacramento-based spokesperson for Brown said.

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