Through a deal entered into between the California legislature and Governor Jerry Brown, the embattled California Public Utilities Commission (“PUC”) will be restructured and reformed. Following a series of crises, including a 2010 major gas pipeline explosion that killed several people in San Bruno, California, a huge gas leak in Southern California that displaced many residents and allegations of secret dealings between the regulated utilities and members of the PUC, which included allegations of judge-fixing, an agreement has been reached to make the PUC more transparent and limit part of its jurisdiction. Notably, with implications on the national level, the PUC will no longer regulate companies like Uber and Lyft.
In recent years, the PUC had come under criticism for failing to adequately police utilities under its jurisdiction. This was particularly true regarding allegations of lax maintenance of gas pipelines by the investor-owned utilities subject to the PUC's jurisdiction. Among the reforms are that people who lobby the PUC will need to register as lobbyists. This will cover more than 50 utilities and others that regularly connect with the appointed commissioners of the PUC. Many documents currently held as confidential will now be made available for public inspection. Former utility executives will have to wait two years before being able to serve as a commissioner on the PUC. Certain contacts with commissioners will have to be posted on the Internet and the California Attorney General will have the authority to bring enforcement actions against people who violate specified ex parte rules. However, back-channel communications will still be allowed on a significant portion of PUC business outside of the rate-setting arena.
This legislatively-enacted set of changes represents a settlement between the legislature and the governor, who had previously vetoed a number of reforms the legislature had sought to impose. It also forestalls a constitutional amendment that would have gutted the PUC and permitted the legislature to reform it in its entirety. How these changes will impact the substance of the PUC’s business is unknown.