Report 2013-109 Recommendation 3 Responses

Report 2013-109: California Public Utilities Commission: Improved Monitoring of Balancing Accounts Would Better Ensure That Utility Rates Are Fair and Reasonable (Release Date: March 2014)

Recommendation #3 To: Public Utilities Commission

To ensure that it has the necessary information to provide appropriate oversight of the balancing accounts, the commission should maintain accurate and timely information on utility balancing accounts. Specifically, it should regularly update its list of balancing accounts when the commission issues decisions authorizing opening new balancing accounts or closing existing balancing accounts, when utilities file balancing account updates, and when the commission performs reviews of balancing accounts.

Agency Response*

See Response #2 above. On April 30, 2013, the Commission's Energy Division imposed a requirement on energy utilities to provide updated lists of balancing accounts and balances every quarter and has been receiving the quarterly updates. Quarterly updating is sufficient to maintain timely information on utility balancing accounts. It should capture any new balancing accounts closed/authorized by the Commission in the last quarter. In addition, the data base will record and track when utilities file advice letters for balancing account amortizations and when a balancing account was reviewed last. Energy Division staff will continue to verify the accuracy of the balancing account lists submitted by the utilities every quarter going forward using Energy Resource Recovery Account (ERRA) and General Rate Case (GRC) decisions, as issued, as a sample check.

The Division of Water and Audits has established a comprehensive spreadsheet data base to record and update utilities' semi-annual reports. In addition, the data base records and tracks when utilities file advice letters for balancing account amortizations and when the Commission reviews balancing account balances as part of the general rate case proceeding for Class A and B water and sewer utilities. The database includes the vintage and balance of each balancing account.

  • Response Type†: 1-Year
  • Completion Date: March 2015
  • Response Date: March 2015

California State Auditor's Assessment of Status: Fully Implemented


Agency Response*

See Response #2 above. The requirement imposed by the Commission's Energy Division on April 30, 2013 on energy utilities, to provide updated lists of balancing accounts and balances every quarter, should be sufficient to maintain timely information on utility balancing accounts. It should capture any new balancing accounts closed/authorized by the Commission in the last quarter. In addition, the database will record and track when utilities file advice letters for balancing account amortizations and when a balancing account was last reviewed.

The Division of Water and Audits has established a comprehensive spreadsheet database to record and update utilities' semi-annual reports. In addition, the data base will record and track when utilities file advice letters for balancing account amortizations and when the Commission reviews balancing account balances as part of the general rate case proceeding for Class A and B water and sewer utilities.

  • Response Type†: 6-Month
  • Completion Date: April 2013
  • Response Date: September 2014

California State Auditor's Assessment of Status: Pending

The commission did not provide any documentation to support that it is updating the databases to identify opening of new balancing accounts or closing of existing balancing accounts, and when the commission performs reviews of balancing accounts.

  • Auditee did not substantiate its claim of full implementation

Agency Response*

The requirement imposed by the Commissions Energy Division on April 30, 2013 on energy utilities to provide updated lists of balancing accounts and balances every quarter should be sufficient to maintain timely information on utility balancing accounts. It should capture any new balancing accounts closed/authorized by the Commission in the last quarter. Energy Division will also maintain a comprehensive spreadsheet data base to record and update utilities semi-annual reports. In addition, the data base will record and track when utilities file advice letters for balancing account amortizations and when a balancing account was reviewed last.

The Commissions Division of Water and Audits will also maintain a comprehensive spreadsheet data base to record and update utilities semi-annual reports. In addition, the data base will record and track when utilities file advice letters for balancing account amortizations and when the Commission reviews balancing account balances as part of the general rate case proceeding for Class A and B water and sewer utilities.

  • Response Type†: 60-Day
  • Estimated Completion Date: On going
  • Response Date: April 2014

California State Auditor's Assessment of Status: Pending


All Recommendations in 2013-109

†Response Type refers to the interval in which the auditee is providing the State Auditor with their status in implementing recommendations made in an audit report. Auditees must submit a response regarding their progress in implementing recommendations from our reports at three intervals from the release of the report: 60 days, six months, and one year or subsequent to one year.

*Agency responses received after June 2013 are posted verbatim.


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