CALIFORNIA LEGISLATURE 20192020 REGULAR SESSION Assembly Bill No. 2067Introduced by Assembly Member HoldenFebruary 04, 2020 An act to amend Section 792.5 of the Public Utilities Code, relating to the Public Utilities Commission. LEGISLATIVE COUNSEL'S DIGESTAB 2067, as introduced, Holden. Public Utilities Commission: balancing accounts: reviews and audits.Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including electrical corporations, gas corporations, heat corporations, telegraph corporations, telephone corporations, and water corporations. Existing law requires the commission to require a public utility to establish and maintain a balancing account reflecting the balance between related costs and revenues whenever the commission authorizes any change in rates reflecting and passing through to the public utilitys customers specific changes in costs, except as specified. Existing law requires the commission to adopt balancing account review or audit procedures that prioritize the review of certain balancing accounts based, in part, on the accounts quarterly balances and authorized revenue amounts and that prioritize review of those accounts that have not been reviewed or audited in the previous 3 years. Existing law authorizes the commission to forgo the review or audit of a balancing account if the Public Advocates Office of the Public Utilities Commission or an independent auditor plans to review or audit the balancing account.This bill would revise those balancing account review or audit procedures to instead prioritize accounts based on year-end, rather than quarterly, balances and authorized revenue amounts. The bill would authorize the commission to additionally forgo the review or audit of a balancing account that the Public Advocates Office or an independent auditor has reviewed or audited in the previous 3 years, as specified.Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NO Bill TextThe people of the State of California do enact as follows:SECTION 1. Section 792.5 of the Public Utilities Code is amended to read:792.5. (a) Whenever the commission authorizes any change in rates reflecting and passing through to customers specific changes in costs, except rates set for common carriers, the commission shall require as a condition of the order that the public utility establish and maintain a balancing account reflecting the balance, whether positive or negative, between the related costs and revenues, and the commission shall take into account by appropriate adjustment or other action any positive or negative balance remaining in the balancing account at the time of any subsequent rate adjustment.(b) The commission shall develop a risk-based approach for reviewing or auditing all balancing accounts periodically to ensure that the transactions recorded in the balancing accounts are for allowable purposes and are supported by appropriate documentation.(c) The commission shall maintain an inventory of the balancing accounts established pursuant to this section.(d) The commission shall require the public utility to record all related costs and revenues in the balancing account, unless those costs or revenues are specifically exempted by the commission.(e) The commission shall adopt balancing account review or audit procedures that prioritize the review of the following balancing accounts:(1) Balancing accounts with a quarter-end year-end balance with more than exceeding a 10-percent differential from the balancing accounts authorized revenue amount. amount, if applicable.(2) Balancing accounts with an authorized revenue amount amount, if applicable, that is in the top 25th percentile of all those balancing accounts.(3) Balancing accounts that have experienced volatile fluctuations in their quarterly annual balances over time.(4) Balancing accounts that have not been reviewed or audited in the previous three years.(f) The commission may forgo the review or audit of a balancing account pursuant to this section if the Public Advocates Office of the Public Utilities Commission or an independent auditor has reviewed or audited the balancing account in the previous three years or plans to review or audit the balancing account. The balancing account review or audit procedures adopted pursuant to subdivision (e) do not apply to the Public Advocates Office of the Public Utilities Commission, and the commission shall retain sole responsibility for the results of those reviews or audits conducted by the Public Advocates Office of the Public Utilities Commission or by independent auditors.
CALIFORNIA LEGISLATURE 20192020 REGULAR SESSION Assembly Bill No. 2067Introduced by Assembly Member HoldenFebruary 04, 2020 An act to amend Section 792.5 of the Public Utilities Code, relating to the Public Utilities Commission. LEGISLATIVE COUNSEL'S DIGESTAB 2067, as introduced, Holden. Public Utilities Commission: balancing accounts: reviews and audits.Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including electrical corporations, gas corporations, heat corporations, telegraph corporations, telephone corporations, and water corporations. Existing law requires the commission to require a public utility to establish and maintain a balancing account reflecting the balance between related costs and revenues whenever the commission authorizes any change in rates reflecting and passing through to the public utilitys customers specific changes in costs, except as specified. Existing law requires the commission to adopt balancing account review or audit procedures that prioritize the review of certain balancing accounts based, in part, on the accounts quarterly balances and authorized revenue amounts and that prioritize review of those accounts that have not been reviewed or audited in the previous 3 years. Existing law authorizes the commission to forgo the review or audit of a balancing account if the Public Advocates Office of the Public Utilities Commission or an independent auditor plans to review or audit the balancing account.This bill would revise those balancing account review or audit procedures to instead prioritize accounts based on year-end, rather than quarterly, balances and authorized revenue amounts. The bill would authorize the commission to additionally forgo the review or audit of a balancing account that the Public Advocates Office or an independent auditor has reviewed or audited in the previous 3 years, as specified.Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NO
CALIFORNIA LEGISLATURE 20192020 REGULAR SESSION
Assembly Bill
No. 2067
Introduced by Assembly Member HoldenFebruary 04, 2020
Introduced by Assembly Member Holden
February 04, 2020
An act to amend Section 792.5 of the Public Utilities Code, relating to the Public Utilities Commission.
LEGISLATIVE COUNSEL'S DIGEST
## LEGISLATIVE COUNSEL'S DIGEST
AB 2067, as introduced, Holden. Public Utilities Commission: balancing accounts: reviews and audits.
Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including electrical corporations, gas corporations, heat corporations, telegraph corporations, telephone corporations, and water corporations. Existing law requires the commission to require a public utility to establish and maintain a balancing account reflecting the balance between related costs and revenues whenever the commission authorizes any change in rates reflecting and passing through to the public utilitys customers specific changes in costs, except as specified. Existing law requires the commission to adopt balancing account review or audit procedures that prioritize the review of certain balancing accounts based, in part, on the accounts quarterly balances and authorized revenue amounts and that prioritize review of those accounts that have not been reviewed or audited in the previous 3 years. Existing law authorizes the commission to forgo the review or audit of a balancing account if the Public Advocates Office of the Public Utilities Commission or an independent auditor plans to review or audit the balancing account.This bill would revise those balancing account review or audit procedures to instead prioritize accounts based on year-end, rather than quarterly, balances and authorized revenue amounts. The bill would authorize the commission to additionally forgo the review or audit of a balancing account that the Public Advocates Office or an independent auditor has reviewed or audited in the previous 3 years, as specified.
Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including electrical corporations, gas corporations, heat corporations, telegraph corporations, telephone corporations, and water corporations. Existing law requires the commission to require a public utility to establish and maintain a balancing account reflecting the balance between related costs and revenues whenever the commission authorizes any change in rates reflecting and passing through to the public utilitys customers specific changes in costs, except as specified. Existing law requires the commission to adopt balancing account review or audit procedures that prioritize the review of certain balancing accounts based, in part, on the accounts quarterly balances and authorized revenue amounts and that prioritize review of those accounts that have not been reviewed or audited in the previous 3 years. Existing law authorizes the commission to forgo the review or audit of a balancing account if the Public Advocates Office of the Public Utilities Commission or an independent auditor plans to review or audit the balancing account.
This bill would revise those balancing account review or audit procedures to instead prioritize accounts based on year-end, rather than quarterly, balances and authorized revenue amounts. The bill would authorize the commission to additionally forgo the review or audit of a balancing account that the Public Advocates Office or an independent auditor has reviewed or audited in the previous 3 years, as specified.
## Digest Key
## Bill Text
The people of the State of California do enact as follows:SECTION 1. Section 792.5 of the Public Utilities Code is amended to read:792.5. (a) Whenever the commission authorizes any change in rates reflecting and passing through to customers specific changes in costs, except rates set for common carriers, the commission shall require as a condition of the order that the public utility establish and maintain a balancing account reflecting the balance, whether positive or negative, between the related costs and revenues, and the commission shall take into account by appropriate adjustment or other action any positive or negative balance remaining in the balancing account at the time of any subsequent rate adjustment.(b) The commission shall develop a risk-based approach for reviewing or auditing all balancing accounts periodically to ensure that the transactions recorded in the balancing accounts are for allowable purposes and are supported by appropriate documentation.(c) The commission shall maintain an inventory of the balancing accounts established pursuant to this section.(d) The commission shall require the public utility to record all related costs and revenues in the balancing account, unless those costs or revenues are specifically exempted by the commission.(e) The commission shall adopt balancing account review or audit procedures that prioritize the review of the following balancing accounts:(1) Balancing accounts with a quarter-end year-end balance with more than exceeding a 10-percent differential from the balancing accounts authorized revenue amount. amount, if applicable.(2) Balancing accounts with an authorized revenue amount amount, if applicable, that is in the top 25th percentile of all those balancing accounts.(3) Balancing accounts that have experienced volatile fluctuations in their quarterly annual balances over time.(4) Balancing accounts that have not been reviewed or audited in the previous three years.(f) The commission may forgo the review or audit of a balancing account pursuant to this section if the Public Advocates Office of the Public Utilities Commission or an independent auditor has reviewed or audited the balancing account in the previous three years or plans to review or audit the balancing account. The balancing account review or audit procedures adopted pursuant to subdivision (e) do not apply to the Public Advocates Office of the Public Utilities Commission, and the commission shall retain sole responsibility for the results of those reviews or audits conducted by the Public Advocates Office of the Public Utilities Commission or by independent auditors.
The people of the State of California do enact as follows:
## The people of the State of California do enact as follows:
SECTION 1. Section 792.5 of the Public Utilities Code is amended to read:792.5. (a) Whenever the commission authorizes any change in rates reflecting and passing through to customers specific changes in costs, except rates set for common carriers, the commission shall require as a condition of the order that the public utility establish and maintain a balancing account reflecting the balance, whether positive or negative, between the related costs and revenues, and the commission shall take into account by appropriate adjustment or other action any positive or negative balance remaining in the balancing account at the time of any subsequent rate adjustment.(b) The commission shall develop a risk-based approach for reviewing or auditing all balancing accounts periodically to ensure that the transactions recorded in the balancing accounts are for allowable purposes and are supported by appropriate documentation.(c) The commission shall maintain an inventory of the balancing accounts established pursuant to this section.(d) The commission shall require the public utility to record all related costs and revenues in the balancing account, unless those costs or revenues are specifically exempted by the commission.(e) The commission shall adopt balancing account review or audit procedures that prioritize the review of the following balancing accounts:(1) Balancing accounts with a quarter-end year-end balance with more than exceeding a 10-percent differential from the balancing accounts authorized revenue amount. amount, if applicable.(2) Balancing accounts with an authorized revenue amount amount, if applicable, that is in the top 25th percentile of all those balancing accounts.(3) Balancing accounts that have experienced volatile fluctuations in their quarterly annual balances over time.(4) Balancing accounts that have not been reviewed or audited in the previous three years.(f) The commission may forgo the review or audit of a balancing account pursuant to this section if the Public Advocates Office of the Public Utilities Commission or an independent auditor has reviewed or audited the balancing account in the previous three years or plans to review or audit the balancing account. The balancing account review or audit procedures adopted pursuant to subdivision (e) do not apply to the Public Advocates Office of the Public Utilities Commission, and the commission shall retain sole responsibility for the results of those reviews or audits conducted by the Public Advocates Office of the Public Utilities Commission or by independent auditors.
SECTION 1. Section 792.5 of the Public Utilities Code is amended to read:
### SECTION 1.
792.5. (a) Whenever the commission authorizes any change in rates reflecting and passing through to customers specific changes in costs, except rates set for common carriers, the commission shall require as a condition of the order that the public utility establish and maintain a balancing account reflecting the balance, whether positive or negative, between the related costs and revenues, and the commission shall take into account by appropriate adjustment or other action any positive or negative balance remaining in the balancing account at the time of any subsequent rate adjustment.(b) The commission shall develop a risk-based approach for reviewing or auditing all balancing accounts periodically to ensure that the transactions recorded in the balancing accounts are for allowable purposes and are supported by appropriate documentation.(c) The commission shall maintain an inventory of the balancing accounts established pursuant to this section.(d) The commission shall require the public utility to record all related costs and revenues in the balancing account, unless those costs or revenues are specifically exempted by the commission.(e) The commission shall adopt balancing account review or audit procedures that prioritize the review of the following balancing accounts:(1) Balancing accounts with a quarter-end year-end balance with more than exceeding a 10-percent differential from the balancing accounts authorized revenue amount. amount, if applicable.(2) Balancing accounts with an authorized revenue amount amount, if applicable, that is in the top 25th percentile of all those balancing accounts.(3) Balancing accounts that have experienced volatile fluctuations in their quarterly annual balances over time.(4) Balancing accounts that have not been reviewed or audited in the previous three years.(f) The commission may forgo the review or audit of a balancing account pursuant to this section if the Public Advocates Office of the Public Utilities Commission or an independent auditor has reviewed or audited the balancing account in the previous three years or plans to review or audit the balancing account. The balancing account review or audit procedures adopted pursuant to subdivision (e) do not apply to the Public Advocates Office of the Public Utilities Commission, and the commission shall retain sole responsibility for the results of those reviews or audits conducted by the Public Advocates Office of the Public Utilities Commission or by independent auditors.
792.5. (a) Whenever the commission authorizes any change in rates reflecting and passing through to customers specific changes in costs, except rates set for common carriers, the commission shall require as a condition of the order that the public utility establish and maintain a balancing account reflecting the balance, whether positive or negative, between the related costs and revenues, and the commission shall take into account by appropriate adjustment or other action any positive or negative balance remaining in the balancing account at the time of any subsequent rate adjustment.(b) The commission shall develop a risk-based approach for reviewing or auditing all balancing accounts periodically to ensure that the transactions recorded in the balancing accounts are for allowable purposes and are supported by appropriate documentation.(c) The commission shall maintain an inventory of the balancing accounts established pursuant to this section.(d) The commission shall require the public utility to record all related costs and revenues in the balancing account, unless those costs or revenues are specifically exempted by the commission.(e) The commission shall adopt balancing account review or audit procedures that prioritize the review of the following balancing accounts:(1) Balancing accounts with a quarter-end year-end balance with more than exceeding a 10-percent differential from the balancing accounts authorized revenue amount. amount, if applicable.(2) Balancing accounts with an authorized revenue amount amount, if applicable, that is in the top 25th percentile of all those balancing accounts.(3) Balancing accounts that have experienced volatile fluctuations in their quarterly annual balances over time.(4) Balancing accounts that have not been reviewed or audited in the previous three years.(f) The commission may forgo the review or audit of a balancing account pursuant to this section if the Public Advocates Office of the Public Utilities Commission or an independent auditor has reviewed or audited the balancing account in the previous three years or plans to review or audit the balancing account. The balancing account review or audit procedures adopted pursuant to subdivision (e) do not apply to the Public Advocates Office of the Public Utilities Commission, and the commission shall retain sole responsibility for the results of those reviews or audits conducted by the Public Advocates Office of the Public Utilities Commission or by independent auditors.
792.5. (a) Whenever the commission authorizes any change in rates reflecting and passing through to customers specific changes in costs, except rates set for common carriers, the commission shall require as a condition of the order that the public utility establish and maintain a balancing account reflecting the balance, whether positive or negative, between the related costs and revenues, and the commission shall take into account by appropriate adjustment or other action any positive or negative balance remaining in the balancing account at the time of any subsequent rate adjustment.(b) The commission shall develop a risk-based approach for reviewing or auditing all balancing accounts periodically to ensure that the transactions recorded in the balancing accounts are for allowable purposes and are supported by appropriate documentation.(c) The commission shall maintain an inventory of the balancing accounts established pursuant to this section.(d) The commission shall require the public utility to record all related costs and revenues in the balancing account, unless those costs or revenues are specifically exempted by the commission.(e) The commission shall adopt balancing account review or audit procedures that prioritize the review of the following balancing accounts:(1) Balancing accounts with a quarter-end year-end balance with more than exceeding a 10-percent differential from the balancing accounts authorized revenue amount. amount, if applicable.(2) Balancing accounts with an authorized revenue amount amount, if applicable, that is in the top 25th percentile of all those balancing accounts.(3) Balancing accounts that have experienced volatile fluctuations in their quarterly annual balances over time.(4) Balancing accounts that have not been reviewed or audited in the previous three years.(f) The commission may forgo the review or audit of a balancing account pursuant to this section if the Public Advocates Office of the Public Utilities Commission or an independent auditor has reviewed or audited the balancing account in the previous three years or plans to review or audit the balancing account. The balancing account review or audit procedures adopted pursuant to subdivision (e) do not apply to the Public Advocates Office of the Public Utilities Commission, and the commission shall retain sole responsibility for the results of those reviews or audits conducted by the Public Advocates Office of the Public Utilities Commission or by independent auditors.
792.5. (a) Whenever the commission authorizes any change in rates reflecting and passing through to customers specific changes in costs, except rates set for common carriers, the commission shall require as a condition of the order that the public utility establish and maintain a balancing account reflecting the balance, whether positive or negative, between the related costs and revenues, and the commission shall take into account by appropriate adjustment or other action any positive or negative balance remaining in the balancing account at the time of any subsequent rate adjustment.
(b) The commission shall develop a risk-based approach for reviewing or auditing all balancing accounts periodically to ensure that the transactions recorded in the balancing accounts are for allowable purposes and are supported by appropriate documentation.
(c) The commission shall maintain an inventory of the balancing accounts established pursuant to this section.
(d) The commission shall require the public utility to record all related costs and revenues in the balancing account, unless those costs or revenues are specifically exempted by the commission.
(e) The commission shall adopt balancing account review or audit procedures that prioritize the review of the following balancing accounts:
(1) Balancing accounts with a quarter-end year-end balance with more than exceeding a 10-percent differential from the balancing accounts authorized revenue amount. amount, if applicable.
(2) Balancing accounts with an authorized revenue amount amount, if applicable, that is in the top 25th percentile of all those balancing accounts.
(3) Balancing accounts that have experienced volatile fluctuations in their quarterly annual balances over time.
(4) Balancing accounts that have not been reviewed or audited in the previous three years.
(f) The commission may forgo the review or audit of a balancing account pursuant to this section if the Public Advocates Office of the Public Utilities Commission or an independent auditor has reviewed or audited the balancing account in the previous three years or plans to review or audit the balancing account. The balancing account review or audit procedures adopted pursuant to subdivision (e) do not apply to the Public Advocates Office of the Public Utilities Commission, and the commission shall retain sole responsibility for the results of those reviews or audits conducted by the Public Advocates Office of the Public Utilities Commission or by independent auditors.