California bill strengthens oversight of utilities commission

Nuclear Plant Problems

Grant Hindsley/AP

In this July 19, 2012 photo surfers walk along a beach nearby the San Onofre Nuclear Power Plant in San Onofre, Calif. Consumer and environmental advocates are urging California regulators to open a probe into soaring costs tied to the damaged power plant. At issue is who is going to pay a bill that has reached $165 million for repairs, inspections and replacement power. The state Public Utilities Commission postponed for the second time Thursday Aug. 2,2012 voting on an order requiring Southern California Edison and San Diego Gas & Electric to disclose the potential economic hit for ratepayers. (AP Photo/Grant Hindsley)

The president of the California Public Utilities Commission would be required next year to step down from two nonprofits created by the commission under legislation that passed the state Assembly on Wednesday, a provision created amid criticism that the nonprofits could be used to shroud how money is spent.

Lawmakers passed the compromise as part of a larger budget-related bill. The two chambers had passed earlier versions of the PUC provision that didn't agree on when it should be implemented.

PUC President Michael Peevey is chairman of two nonprofits created by the agency, which work on clean-energy projects and Internet access. Under the legislation, he could not serve in those roles starting in June 2014.

Opponents of the practice say the related nonprofits can be used to spend money with less oversight. Peevey has defended his decision to serve in both roles.

A Senate bill would have delayed the new rule until January 2015, after Peevey's term expires. The governor also sought the 2015 date, while the Assembly called for enacting the prohibition in January 2014.

Assemblywoman Nancy Skinner, D-Berkeley, said the change "works in tandem" with another change that prohibits commissioners from establishing related nonprofit organizations using ratepayer funds.

The legislation also intends to strengthen oversight of the PUC by requiring the agency to use a new budgeting process that makes it easier for outsiders to track the flow of money, establishing an office of ratepayer advocate and forcing the agency to notify lawmakers of future lawsuit settlements.

The state's nonpartisan Legislative Analyst's Office had recommended in February that auditors examine whether utility regulators are properly managing consumer-funded accounts for utility projects totaling hundreds of millions of dollars. The analyst's report raised the possibility that gas and electric ratepayers may have been overcharged.

SB84 passed the Assembly 47-24 and heads to the Senate.

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