Proposed amendment would require the CPUC to consider affordability when setting utility rates

A proposal that would allow voters to dramatically reshape the California Public Utilities Commission by amending the state’s constitution has made it halfway through the legislative process in Sacramento.

Assembly Constitutional Amendment 9, introduced by Assemblymember Tasha Boerner, D-Encinitas, calls for expanding the number of commissioners at the utilities commission from five voting members to nine.

ACA 9 would also formally require the commission, also known as the CPUC, to consider the affordability of utility rates when making its decisions.

“The CPUC has many safeguards to ensure that our public utilities and energy companies are profitable,” Boerner said. “But there’s no constitutional requirement for affordability.” Doing so, she believes, will make the commission “do a better job of balancing profitability of the (investor-owned utilities) with affordability for customers.”

As chair of the Assembly’s Communications and Conveyance Committee, Boerner said the caseload the CPUC’s five commissioners have to handle is too burdensome and expanding the roster to nine will improve things.

“They are stretched thin,” she said. “They’ve admitted that in committee hearings.”

The proposed amendment passed the Assembly on a 67-1 floor vote on May 18, with 12 members not voting. It now moves on to the Senate Rules Committee, where Boerner predicts it will receive an initial hearing next week.

Critically, since the legislation involves a potential change to the state constitution, ACA 9 would not be subject to approval or veto from the Governor’s Office. However, it would need to pass with a two-thirds majority if and when it gets to the Senate floor in order to go before voters.

Under existing rules, the governor appoints all five CPUC commissioners, who are then confirmed by the state senate. Commissioners serve staggered six-year terms.

If passed, ACA 9 would allow the speaker of the Assembly to appoint two commissioners and the Senate Rules Committee to appoint another pair.

Boerner is on a tight timeline - she aims to get the proposal through the Legislature by June 25 so it can go onto the ballot in time for the general election in November.

“I think this is a unique way to restructure the incentives of the CPUC, to get more commissioner eyes on projects,” she told the Union-Tribune in a phone interview.

The Union-Tribune sent emails to the CPUC, asking if it favored or opposed ACA 9, but did not receive a response by 5 p.m. Tuesday.

The proposed amendment comes as high utility rates across the state have become a major issue.

According to the most recent electric rates report by the California Public Advocates Office, the average per-kilowatt residential rate has increased 98% in San Diego Gas & Electric’s service territory in the past 10 years. Southern California Edison customers have seen a 101% increase over the same time frame, with Pacific Gas & Electric average residential rates climbing 69%.

The CPUC is best-known for overseeing investor-owned electric and natural gas utilities in the state, and focusing on power system safety, reliability and advancing California’s renewable energy goals.

But the commission’s responsibilities also extend to broadband and telecommunications, passenger transportation companies such as Uber and Lyft, as well as the nascent autonomous vehicle industry and even regulating privately owned water utilities and rail transit.

Edward Randolph is an expert on the workings of the CPUC, having served as deputy executive director of the commission's Energy Division from 2011 to 2021.

Though he would prefer to keep the commission at five voting members, he said CPUC commissioners have too much on their plates.

“In my view, it makes it really challenging for them to focus on the bread and butter energy issues that I think most Californians hope they focus on,” said Randolph, referring to general rate cases - the highly contested, multibillion-dollar proceedings where the CPUC determines how much it will cost to maintain and upgrade the power system for each investor-owned utility in California over a four-year period, and how much customers pay.

But Randolph added that he was not averse to ACA 9, provided it was “accompanied by other changes” so that the nine members coordinate and work together.

“We do need to lower or stop the increased growth in rates,” said Randolph, now a partner at Caliber Strategies, an energy/climate regulatory lobbying firm based in Sacramento. “But I think it’s just as important that we make sure what is being spent (by utilities) is actually on smart, long-term investments that meet customer needs.”

In addition to expanding the number of commissioners and adding “affordability” language, ACA 9 also intends to create an office of telecommunications, broadband and digital equity that would be separate from the CPUC, and go into effect by Jan. 1, 2028.

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