Report 2003-103 Summary - November 2003
California Public Utilities Commission:
State Law and Regulations Establish Firm Deadlines for Only a Small Number of Its Proceedings
Our review of whether the California Public Utilities Commission (commission) promptly resolves formal and informal proceedings found the following:
- Few of the 1,602 formal proceedings the commission initiated between January 1, 2000, and June 30, 2003, were subject to statutory deadlines.
- Commission staff provided various reasons for delays, including that the outcomes of some proceedings were dependent on other decisions or investigations or the proceedings were purposely kept open to take up related issues or to manage them in multiple phases.
- Two factors contributed to delays in processing the more informal advice letters, which the commission uses to approve minor requests from utilities: Some had a lower workload priority and some required formal resolution or investigation.
Although the commission cited workload and inadequate staffing as contributing to delays in processing its formal proceedings and advice letters, the lack of a workload tracking system hinders its ability to justify staffing needs.
RESULTS IN BRIEF
In conducting its various regulatory activities, the California Public Utilities Commission (commission) typically uses a formal proceeding to review an issue and to ultimately make a final policy, procedural, or other type of decision. Although Senate Bill 960 (SB 960), Statutes of 1996, establishes several deadlines for processing them, few of the 1,602 formal proceedings the commission initiated between January 1, 2000, and June 30, 2003, are subject to those deadlines. SB 960 requires that the commission resolve only those proceedings categorized as adjudicatory that require hearings within 12 months. According to its chief administrative law judge (ALJ), the commission further interprets SB 960 to apply only to those proceedings subject to evidentiary types of hearings, making the deadline applicable to only 39 of the proceedings during the time period we reviewed. Our legal counsel advised that in view of the commission's broad rule-making authority, the commission's interpretations of statutes and its own rules are given great weight by the courts. Thus, we relied on the commission's interpretations of the relevant statutes in determining whether the commission is complying with statutory and regulatory deadlines for proceedings. In so doing, state law and regulations apply to only a few of the commission's proceedings.
The Legislature did include intent language in SB 960 that the commission should establish reasonable time periods (not to exceed 18 months) for resolving proceedings not covered by the deadline. According to the chief ALJ, the commission considers the SB 960 language to be a guideline encouraging rigorous case management, and our legal counsel advises that it does not legally compel the commission to complete other proceedings within 18 months. However, Assembly Bill 1735 (AB 1735), which takes effect January 1, 2004, statutorily requires the commission to resolve rate-setting and quasi-legislative proceedings within 18 months of issuing a scoping memo.1 Unlike SB 960, the new law does not explicitly state that only proceedings with hearings are subject to its legal requirements. Nevertheless, the chief ALJ explained that the new law explicitly states that it applies when there is a scoping memo and, according to statute and regulation, scoping memos are required in proceedings that require evidentiary hearings. Therefore, the chief ALJ noted that the commission intends to apply AB 1735 to only those types of proceedings. Thus, if the new law had been in effect during the period we reviewed for our audit, it would have applied to only 105 of 1,323 rate-setting and quasi-legislative proceedings. Because AB 1735 applies to so few proceedings when using the commission's interpretation, this new requirement may not be as effective in reducing the time it takes to resolve such proceedings as would a statute that clearly applies to all proceedings.
The commission provided various reasons to explain the delays in resolving 45 proceedings we reviewed that exceeded either statutory deadlines or guidelines. For example, the commission held four proceedings open to resolve numerous related issues or to manage multiple phases of the same proceeding. The chief ALJ stated that the commission will hold proceedings open if it believes evidence taken earlier will continue to be referred to in subsequent phases or when successive decisions will contribute to completing a single project. The commission actually resolved five of the proceedings promptly that appeared to exceed deadlines, but its tracking system does not appropriately reflect their resolution when they are reopened. The commissioners or management staff delayed another eight proceedings beyond their deadlines for various reasons, including the need to reassign a proceeding to a new commissioner who required additional time to become familiar with it, assigning a proceeding a lower priority, or allowing commissioners more time to consider how the energy crisis of 2000 and 2001 would affect a proceeding.
The commission uses more informal advice letters to address minor requests from utilities. We identified various factors that contributed to delays in the resolution of a sample of 90 such letters. For example, the commission either delayed or failed to input a closing date in its tracking system for 27 of the advice letters it processed on time. Consequently, the electronic database does not provide the commission with accurate data regarding the status of advice letters. The commission indicated that it considered another 16 advice letters as lower priority due to workload. However, we were unable to determine whether it requires additional staff to promptly process advice letters because it has not implemented a workload tracking system that would allow us to assess the adequacy of current staffing levels. The commission was unable to provide us an explanation for its delay in resolving another 17 advice letters, 16 of which were the responsibility of the telecommunications division—one of the three divisions that process them. This same division has not adequately tracked and maintained its advice letters, which may have contributed to its inability to provide explanations for delays in resolving them.
Although the commission indicated that staffing is a limiting factor in promptly processing its formal proceedings and advice letters, it was unable to provide us with workload analyses to support these contentions. In fact, the Department of Finance (Finance), in various reports and management letters it prepared between February 1998 and February 2003, reported that the commission lacks a workload tracking system that would allow it to justify its staffing needs. In response to a February 2003 management letter, the commission began to revise its workload tracking system to address Finance's concerns; however, it does not anticipate implementing key phases of the new system until the end of 2003 or the beginning of 2004. Thus, during our audit the commission was unable to provide us any staffing analyses that would allow us to determine whether its staffing levels are adequate to promptly process formal proceedings and advice letters.
To ensure that it accurately reports the closing date of a proceeding, the commission should modify its tracking system to retain the original closing date as well as record its subsequent closing date for those proceedings it reopens.
To ensure that the information included in its tracking system is accurate for reporting on the timeliness of advice letters, the commission should review all advice letters in the system and close those that it has completed.
The commission should continue to work with Finance on improving its workload tracking system so that it can justify its staffing needs.
The commission indicates that it agrees with the numerical facts contained in the report and it accepts the recommendations. However, the commission provided brief comments concerning three aspects of the report.
1 The commission typically issues a scoping memo early on in a proceeding that includes a proposed schedule.