California’s Gov. Pete Wilson has signed into law a measure thatfor the first time allows full judicial review of California PublicUtilities Commission decisions. This could mean more courtchallenges to future energy decisions when the law goes into effectJan. 1, 1999.

At the same time, Gov. Wilson vetoed a separate bill (SB 1757)aimed at further slowing down the energy regulators’ previouslyannounced natural gas industry unbundling. CPUC officials arehoping the veto may help salvage some of the natural gas actionsalready under way that are now expected to lead to gas unbundlingin the year 2000, such as removing any limits to the coreaggregation program. But that clarification is still to be workedout with legislators and the parties to the ongoing statewidenatural gas strategy proceedings.

Historically, the state constitutionally-based commission’sdecisions can only be appealed to the California Supreme Court, soeffectively very few utility decisions in California have beensubject to court review. Last year, Gov. Wilson vetoed similarlegislation that would have opened the CPUC to state appellatecourt reviews, noting that when there was more energy industrycompetition such legislation might make sense. At the same time, anarrower bill to open compliance and enforcement decisions tojudicial review was signed by the governor in 1997. Since thattime, the CPUC has decided about a dozen compliance and enforcementcases, none of which have been appealed to courts.

After its passage at the end of this summer’s legislativesession, CPUC President Richard Bilas called the new law (SB 779)flawed because it fails to specify one of the state’s six appellatecourt circuits or districts for the review, thus, opening up thepossibility of “forum shopping” among utilities and consumer groupsover the same decision, which Bilas thinks could bring “chaos” tothe regulatory process.

Bilas said he is not against opening up CPUC decisions to widercourt review if a specific district is named. Other commissioners,however, are against it in total because they think it will furtherdelay and complicate what is already a slow, complex process.

“Perhaps with more competition it is appropriate to have fulljudicial review,” Bilas said. “I’m certainly not opposed to peoplegetting more due process.” Critics have questioned whether theappeals courts have the expertise and resources to handle a delugeof appeals-if they do, in fact, materialize. They suggested thatestablishing one of the districts to handle all CPUC appeals wouldallow that particular court to marshal the added resources andexpertise over time.

Bilas and immediate past CPUC president, P. Gregory Conlon, metSept. 21 with Gov. Wilson to head off both pieces new statelegislation, particularly AB1757 because they felt it would furtherhinder ongoing attempts to streamline regulation and inject morecompetition into the natural gas industry. Bilas had called thenatural gas slow-down bill “truly anti-competitive.”

Earlier in the waning days of the state legislative session, athird bill was passed and quickly signed by the governor (1602),effectively preventing the CPUC from proceeding with any new retailnatural gas unbundling before the year 2000. It was requested byutility labor unions with either active support or “neutrality”from the state’s major natural gas utilities. The law ostensibly isto allow more time to work out safety and consumer protectionconcerns related to opening up parts of natural gas service tocompetition, although the pipeline network would remain a monopolyfunction of the utilities.

Bilas said that realistically the delay until Jan.1, 2000 instarting gas unbundling makes marketers and other potentialparticipants wait only another six months, since it is unrealisticthat the CPUC can conclude its current fact-gathering and hearingprocess before mid-1999.

“The fact of the matter is that we’re living under the (PG&ampE)Gas Accord in northern California and the (SoCalGas) GlobalSettlement in southern California,” said Bilas, referring to twomajor bases for wholesale gas unbundling over the past four years.

“They affect future decisions at the commission. And one of thereasons for the slowing down is that we have these two agreementsin place, so a new (CPUC) gas strategy put in effect now would undoparts of these settlements. That might not be the best thing to dofrom a policy standpoint.”

Richard Nemec, Los Angeles

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