In this analysis, we recommend two modifications to the Governor's proposed 2017-18 budget for the California Public Utilities Commission: (1) convert funding for one position in the Consumer Affairs Branch from permanent to two-year limited-term and (2) reject request for one position to publish contract information online.

LAO Contact

Ross Brown

February 16, 2017

The 2017-18 Budget

California Public Utilities Commission (CPUC)

CPUC regulates privately owned electric, natural gas, telecommunications, water, railroad, rail transit, and passenger transportation companies. The agency’s mission is to ensure that regulated utilities provide safe and reliable services at affordable rates. In addition to its regulatory activities, CPUC also administers programs that provide subsidized utility services to certain underserved populations and supports energy-related research and development activities.

The Governor’s budget proposes $1.8 billion for CPUC in 2017‑18, a net increase of $120 million (7 percent) compared to estimated expenditures in the current year. This year-over-year increase is largely the result of increased costs for the California LifeLine (LifeLine) program associated with an estimated increase in caseload. As described below, we recommend the Legislature make two modifications to the proposed CPUC budget.

LifeLine Program Portability Freeze Rule

Recommend Converting Funding From Permanent to Limited Term. LifeLine, administered by CPUC, provides telephone service at discounted cost to low-income households. Chapter 577 of 2016 (AB 2570, Quirk) required CPUC to adopt a rule that LifeLine enrollees cannot switch telephone providers within 60 days after beginning the service, subject to certain exceptions.

The commission requests one additional position and $82,000 (Public Utilities Commission Utilities Reimbursement Account) in its Consumer Affairs Branch to respond to additional questions and complaints from enrollees that could result from the new rule. In our view, it is reasonable to expect an increase in consumer assistance workload associated with the new rule. However, the amount of additional workload, especially over the long run, is unclear at this time. Therefore, we recommend the Legislature approve the requested funding on a two-year limited-term basis. The administration can submit a request for ongoing resources in future years when more information about ongoing workload is available.

Publish Contract and Audit Information on CPUC Website

Recommend Rejecting Request for One Position. Chapter 815 of 2016 (AB 1651, Obernolte) requires CPUC to annually publish a summary of each contract it enters into, as well as the results of any audits of its contracting practices conducted by the Department of General Services, on its website. The commission estimates that there will be about 400 contract summaries and audits to post annually.

The commission requests one permanent position and $107,000 (from various CPUC funds) to gather and publish the required information and to respond to stakeholder questions that might result from publishing the information online. We recommend the Legislature reject the request because the workload justification provided by CPUC does not support an additional position. The work appears minor and can be done by existing CPUC staff.