Governor’s Czar Portends Commission Shakeup

By Published On: October 23, 2014

Energy regulators’ accountability, transparency, and perhaps total reorganization is in the sights of Edward O’Neill, senior advisor on California Public Utilities Commission modernization and reform. “The governor is willing to spend political capital on improving” the agency “for the long haul,” O’Neill said at a Power Association of Northern California Oct. 21 gathering. “It will be a hard slog,” Stephen St. Marie, commission advisor, said of O’Neill’s assignment at the commission. It is a job made more challenging by the scandal involving improper communications between some at the commission and Pacific Gas & Electric officials. “There is a new sense of importance on accountability and transparency,” said O’Neill. He was appointed last July by Gov. Jerry Brown to not only improve public access to commission proceedings but increase the agency’s efficiency. That includes prompt decision making. “The commission is stuck in the 19th century,” said O’Neill. At the same time, commission decisions—from ratemaking to adjudicatory—today involve billions of dollars that affect the California economy, including a wide array of businesses not regulated by the commission. He said commission rules governing communications with stakeholders need reform because of their “rigidity,” such as fixed regulatory categories each governed by different ex parte requirements. They are rate-setting, adjudicatory and quasi legislative proceedings. But in practice, proceedings involve a mix of more than one category, O’Neill said. “The job morphs,” he said. For example, rate setting cases often entail legislative policy matters. While rate-setting is governed by rules on non-public communications with stakeholders, there are no restrictions on ex parte communications or reporting requirements for quasi legislative matters. For rate-setting dockets, ex parte oral and written communications are allowed but the interested party communicating with the decision maker must notify other parties in the case the same day. For oral communications, other stakeholders are to be granted a meeting of equal time with that decision maker. In addition, notice by the interested party is required. Nonpublic, off-the-record, oral and written communications with a decision maker are flat out prohibited in adjudicatory matters. The rules can create burdens without commensurate benefits, said O’Neill. And, restrictions on communication can inhibit the deliberative process, O’Neill noted. He indicated that legislation will be introduced in the next session to improve the rules on commission communications with stakeholders, and increase transparency over commission actions so the public is better informed. When asked if a commission budget increase may be considered to ease staff work load, he said that the commission’s case load has not increased. At the same time, he acknowledged the growth in complexity of commission proceedings. “Funding is not necessarily consistent with the priorities.” Often special funds that make up most of the commission’s budget are directed at set purposes in place of need. An example he gave is the large chunk of ear-marked funds for the commission’s Safety Division to “actively manage records,” part of which could be better used elsewhere. Mark Toney, The Utility Reform Network executive director, pointed out some of the commission’s delayed decisions were directly affected by budget-related staffing shortages. The Legislature’s “unfunded mandates and hiring freezes” make the commission’s job more difficult, he warned. O’Neill’s job as modernization czar at the commission also includes possible agency reorganization. He estimates by next June that he will complete a “work product,” presumably a report, revealing his assessment of how to make the commission a 21st century organization.

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