Wilson Vetoes Gas Bill; Approves Judicial Review of CPUC Rulings
California's Gov. Pete Wilson has signed into law a measure that
for the first time allows full judicial review of California Public
Utilities Commission decisions. This could mean more court
challenges to future energy decisions when the law goes into effect
Jan. 1, 1999.
At the same time, Gov. Wilson vetoed a separate bill (SB 1757)
aimed at further slowing down the energy regulators' previously
announced natural gas industry unbundling. CPUC officials are
hoping the veto may help salvage some of the natural gas actions
already under way that are now expected to lead to gas unbundling
in the year 2000, such as removing any limits to the core
aggregation program. But that clarification is still to be worked
out with legislators and the parties to the ongoing statewide
natural gas strategy proceedings.
Historically, the state constitutionally-based commission's
decisions can only be appealed to the California Supreme Court, so
effectively very few utility decisions in California have been
subject to court review. Last year, Gov. Wilson vetoed similar
legislation that would have opened the CPUC to state appellate
court reviews, noting that when there was more energy industry
competition such legislation might make sense. At the same time, a
narrower bill to open compliance and enforcement decisions to
judicial review was signed by the governor in 1997. Since that
time, the CPUC has decided about a dozen compliance and enforcement
cases, none of which have been appealed to courts.
After its passage at the end of this summer's legislative
session, CPUC President Richard Bilas called the new law (SB 779)
flawed because it fails to specify one of the state's six appellate
court circuits or districts for the review, thus, opening up the
possibility of "forum shopping" among utilities and consumer groups
over the same decision, which Bilas thinks could bring "chaos" to
the regulatory process.
Bilas said he is not against opening up CPUC decisions to wider
court review if a specific district is named. Other commissioners,
however, are against it in total because they think it will further
delay and complicate what is already a slow, complex process.
"Perhaps with more competition it is appropriate to have full
judicial review," Bilas said. "I'm certainly not opposed to people
getting more due process." Critics have questioned whether the
appeals courts have the expertise and resources to handle a deluge
of appeals-if they do, in fact, materialize. They suggested that
establishing one of the districts to handle all CPUC appeals would
allow that particular court to marshal the added resources and
expertise over time.
Bilas and immediate past CPUC president, P. Gregory Conlon, met
Sept. 21 with Gov. Wilson to head off both pieces new state
legislation, particularly AB1757 because they felt it would further
hinder ongoing attempts to streamline regulation and inject more
competition into the natural gas industry. Bilas had called the
natural gas slow-down bill "truly anti-competitive."
Earlier in the waning days of the state legislative session, a
third bill was passed and quickly signed by the governor (1602),
effectively preventing the CPUC from proceeding with any new retail
natural gas unbundling before the year 2000. It was requested by
utility labor unions with either active support or "neutrality"
from the state's major natural gas utilities. The law ostensibly is
to allow more time to work out safety and consumer protection
concerns related to opening up parts of natural gas service to
competition, although the pipeline network would remain a monopoly
function of the utilities.
Bilas said that realistically the delay until Jan.1, 2000 in
starting gas unbundling makes marketers and other potential
participants wait only another six months, since it is unrealistic
that the CPUC can conclude its current fact-gathering and hearing
process before mid-1999.
"The fact of the matter is that we're living under the (PG&E)
Gas Accord in northern California and the (SoCalGas) Global
Settlement in southern California," said Bilas, referring to two
major bases for wholesale gas unbundling over the past four years.
"They affect future decisions at the commission. And one of the
reasons for the slowing down is that we have these two agreements
in place, so a new (CPUC) gas strategy put in effect now would undo
parts of these settlements. That might not be the best thing to do
from a policy standpoint."
Richard Nemec, Los Angeles