California Public Utilities Commission

California Public Utilities Commission

Seal
Headquarters in San Francisco
Commission overview
Formed	February 10, 1911 (1911-02-10)
Jurisdiction	California
Headquarters	505 Van Ness Avenue, San Francisco, California 37°46′49″N 122°25′14″W / 37.78023°N 122.42046°W / 37.78023; -122.42046Coordinates: 37°46′49″N 122°25′14″W / 37.78023°N 122.42046°W / 37.78023; -122.42046
Annual budget	$ 1.4 billion (2011)
Commission executives	Michael Picker, Commissioner-President Carla Peterman, Commissioner Mike Florio, Commissioner Catherine Sandoval, Commissioner Liane Randolph, Commissioner Tim Sullivan, Executive Director
Website	Official website

The California Public Utilities Commission (CPUC or PUC) is a regulatory agency that regulates privately owned public utilities in the state of California, including electric power, telecommunications, natural gas and water companies. In addition, the CPUC regulates common carriers, including household goods movers, passenger transportation companies (like limousine services) and rail crossing safety.^[1] The CPUC's headquarters are located in the Civic Center district of San Francisco, and the agency has field offices in Los Angeles and Sacramento.

History

On April 1, 1878, the California Office of the Commissioner of Transportation was created.^[2] During the 19th century, public concerns over the unbridled power of the Southern Pacific Railroad grew to the point that a three-member Railroad Commission was established, primarily to approve transportation prices.^[3] However, the Southern Pacific quickly dominated this commission to its advantage, and public outrage re-ignited. As experience with public regulation grew, other common utilities were brought under the oversight of the Railroad Commission.^[4]

On March 3, 1879 the California Constitution was adopted by constitutional convention and was ratified by the electorate on May 7, 1879, and included provisions relating to Railroad Commissioners in article XII.^[5] On April 15, 1880 the Board of Railroad Commissioners was created.^[6] On March 20, 1909 the Railroad Commission of the State of California replaced these other entities.^[7] On February 9, 1911 the California Legislature passed the Railroad Commission Act reorganizing the Railroad Commission.^[8]

On March 24, 1911 the California Legislature proposed a constitutional amendment giving it constitutional status,^[9] which was ratified by the electorate on October 10, 1911.^[5] On June 16, 1945 a constitutional amendment was proposed by the legislature to rename the Railroad Commission as the California Public Utilities Commission,^[10] which was ratified by the electorate on November 5, 1946.

As a result of the amendment, the Constitution of California declares that the Public Utilities Code is the highest law in the state, that the legislature has unlimited authority to regulate public utilities under the Public Utilities Code, and that its provisions override any conflicting provision of the State Constitution which deals with the subject of regulation of public utilities.^[11]

In October 2014, Commission President Michael Peevey decided to step down at the upcoming end of his second six-year term in December. Controversy was swirling around the agency at the time, for apparent cozy relationships with Pacific Gas & Electric, a utility whose gas line exploded in San Bruno killing eight people in 2010.^[12] His home in the Los Angeles suburb of La Cañada Flintridge was searched by criminal investigators in January 2015.^[13][14]

Structure

Five commissioners each serve staggered six-year terms as the governing body of the agency. Commissioners are appointed by the governor and must be confirmed by the California State Senate. The CPUC meets publicly^[15] to carry out the business of the agency, which may include the adoption of utility rate changes, rules on safety and service standards, implementation of conservation programs, investigation into unlawful or anticompetitive practices by regulated utilities and intervention into federal proceedings which affect California ratepayers.

As of January 2015, the current commissioners are:^[16]

• President Michael Picker, (appointed in 2014 by Jerry Brown)^[17]
• Mike Florio (term expires in 2017)
• Catherine J.K. Sandoval (term expires in 2017)
• Carla J. Peterman (term expires in 2019)
• Liane M. Randolph (term expires in 2020)

Some regulatory laws are implemented by the California State Legislature through the passage of laws. These laws often reside in the California Public Utilities Code.^[18] The CPUC Headquarters are in San Francisco with offices in Los Angeles and Sacramento and the CPUC employs 1000 including judges, engineers, analysts, lawyers, auditors, and support.^[19]

Exclusions

The CPUC does not regulate a utility or common carrier operated by a government agency. Thus, such organizations as the Los Angeles Department of Water and Power, San Francisco's Bay Area Rapid Transit, or any other municipally operated utility or common carrier are not subject to rate regulation or tariff schedule filing with the CPUC. However, all municipal utilities and carriers in California must follow Public Utilities provisions to hold hearings and have public input before raising rates or changing terms of service, and municipal utility customers have means of appeal of potential disconnections.^[20]

Energy and climate change

The CPUC regulates investor-owned electric and gas utilities within the state of California, including Pacific Gas & Electric, Southern California Edison, and San Diego Gas & Electric. Among its stated goals for energy regulation are to establish service standards and safety rules, authorize utility rate changes, oversee markets to inhibit anti-competitive activity, prosecute unlawful utility marketing and billing activities, govern business relationships between utilities and their affiliates, resolve complaints by customers against utilities, implement energy efficiency and conservation programs and programs for the low-income and disabled, oversee the merger and restructure of utility corporations, and enforce the California Environmental Quality Act for utility construction.^[21]

California Solar Initiative

The California Solar Initiative(CSI) is overseen by the California Public Utilities Commission (CPUC) and provides incentives for solar system installations to customers of the state’s three investor-owned utilities (IOUs): Pacific Gas and Electric Company (PG&E), Southern California Edison (SCE) and San Diego Gas and Electric (SDG&E). The CSI Program provides upfront incentives for solar systems installed on existing residential homes, as well as existing and new commercial, industrial, government, non-profit, and agricultural properties within the service territories of the IOUs. The CSI Program has a goal to install 1,800 MW of new solar (excluding solar water heating) by the end of 2016. As of 13 January 2015, the CSI program has achieved a total of 1,743 MW of installed capacity, 96.8% of the program goal, since program inception.^[22]

On January 12, 2006, the CPUC issued an Interim Order that set initial policy and funding for the program. The CPUC was nearing an August 24, 2006 Commission vote on proposed incentive level design, administrative structure, and planning schedule, when SB1 was signed into law on August 21, 2006. While SB 1 codified the state's commitment to the creation of a self-sustaining solar market, it also introduced several unanticipated requirements for the program. In order to conform to state law, the CPUC then worked with Parties to issue a proposed decision on SB1's impacts to the CSI program for public comment; this decision was approved by Commissioners on December 14, 2006. The program launched on January 1, 2007.^[23]

The CSI Program was designed to be responsive to economies of scale in the California solar market – as the solar market grows, it was expected solar system costs would drop and incentives offered through the program decline. The CPUC divided the overall megawatt goal for the incentive program into 10 programmatic incentive level steps, and assigned a target amount of capacity in each step to receive an incentive based on dollars per-watt or cents per-kilowatt-hour.^[24]

The CPUC began to roll back solar savings for consumers (thus diminishing demand for solar installations) by enacting minimum delivery charges for residential consumers. Under the CARE (CA Alternate Rates for Energy) and FERA (Family Electric Rate Assistance) and Medical Baseline programs minimum charges for consumers will be $5, even when solar energy production exceeds usage. All other CA consumers will have a monthly minimum of $10, again even when solar energy production exceeds usage. Additional rate changes are expected for the next few years, which will further dampen enthusiasm for solar power generation at the residential level.^[25]

Greenhouse Gas Emissions Standards

In January 2007, the CPUC adopted a greenhouse gas emissions standard that requires new long-term commitments for baseload generation to serve California consumers with power plants that have emissions no greater than a combined cycle gas turbine plant.^[26] The CPUC has stated that the emissions standard is a vital step in addressing ongoing concerns with global warming.

Cap and trade

On February 8, 2008, CPUC President Michael Peevey issued a proposed decision concerning implementation of California’s greenhouse gas emissions legislation, AB 32. The decision recommends a cap and trade program for the electricity sector in California that would impose regulations on owners and operators of generation in California and out-of-state generators delivering electricity to the California electrical grid.^[27]

Telecommunications

Communications

The CPUC regulates intrastate telecommunications service and terms and conditions of wireless phone providers (but not entry or rates which are reserved to the Federal Communications Commission.) The CPUC has developed a consumer-oriented communications website.^[28] The CPUC also reviews third-party-verification recordings to monitor for telephone slamming.

The Digital Infrastructure and Video Competition Act of 2006 (DIVCA) made the CPUC responsible for video (what were formerly known as Cable TV) franchises. The DIVCA granted the CPUC limited authority to regulate video service providers via a statewide franchise scheme.^[29] The CPUC is responsible for licensing video service providers, and enforcing certain anti discrimination and build out requirements imposed by the Act. Local franchise authorities will continue to regulate rights of way used by video providers, handle consumer complaints, and requirements as to public, educational, and government access (PEG) channels. Previously, licensing of franchises was handled by local authorities such as the Sacramento Metropolitan Cable Television Commission.

The CPUC also played a key role in the Governor's Broadband Task Force formed in 2006. The task force produced two reports making recommendations to the Governor on what could be done to enhance broadband in California, engaging in a broadband mapping project for California, and producing a broadband speed report. In response to the Task Force mapping project and report, the CPUC launched an innovative California Advanced Services Fund (CASF), which is a two-year, infrastructure grant program to bring broadband to unserved or underserved areas of California. The fund comes from a 0.25% telephone surcharge. Broadband providers may apply for 40% infrastructure grants to build broadband to unserved and underserved communities within a three-year time frame, and must provide 60% matching funds.

Call recording

The concept behind General Order 107-B is that telephone calls cannot be recorded in California unless all parties to the call know it is being recorded.

The Order states the specifics of what must be done in order to lawfully record telephone calls. Based on the 1983 version, one way to meet the requirements may be to give a verbal warning. This often occurs by the playing of a recording in an automatic call distribution queue: "Your call may be recorded or monitored for quality assurance purposes."

Another method allowed to warn all callers a call is being recorded is the presence of a recorder warning tone: a 1,440 Hz tone repeating every fifteen seconds. In the 1960s, radio stations with call-in programs used to employ a recorder warning tone. The law now exempts lines used for call-in to broadcasts or cablecasts since it is presumed a caller to a telecast is aware their call is subject to being transmitted or recorded and intends for this to happen.

The Order requires that telephone utilities disconnect telephone service for violations of this Order.

Transportation

Transportation Network Companies

A transportation network company (TNC) is a company that uses an online-enabled platform to connect passengers with drivers using their personal, non-commercial, vehicles.^[30] This can be considered a type of ridesharing. Examples include Lyft, Uber X, Sidecar, Wingz, Haxi and Summon.^[31][32]

The definition of a TNC was created by the CPUC in 2013, as a result of a rulemaking process around new and previously unregulated forms of transportation. Prior to the definition, the CPUC had attempted to group TNC services in the same category as limousines.^[33] Taxi industry groups opposed the creation of the new category, arguing that TNCs are taking away their business as illegal taxicab operations.^[34]

The CPUC established regulations for TNC services at the same time as the definition. These included driver background checks, driver training, drug and alcohol policies, minimum insurance coverage of $1 million, and company licensing through the CPUC.^[35]

References

Further reading

• Michaels, Robert J. (2008). "Electricity and Its Regulation". In David R. Henderson (ed.). Concise Encyclopedia of Economics (2nd ed.). Indianapolis: Library of Economics and Liberty. ISBN 978-0865976658. OCLC 237794267. 

External links

• Official website
• California Emerging Technology Fund