Governor Brown Signs Bill Creating More Oversight of Investor Owned Utilities

SACRAMENTO ­– Yesterday, Governor Jerry Brown signed Senate Bill 549 into law. Senator Steven Bradford (D-Gardena) introduced SB 549 to ensure that the California Public Utilities Commission (CPUC) is made aware in a timely fashion when Investor Owned Utilities (IOUs) redirect funds intended for safety-related project

“California’s utility companies need to do a gut-check before they divert money away from critical safety improvements,” said Senator Bradford. “SB 549 is intended to help prevent tragedies, such as the 2010, gas pipeline explosion in San Bruno, which killed eight and destroyed 38 homes.  It should be the duty of our utility companies to notify the public when money earmarked for safety and maintenance is used for other purposes, which may compromise the safety of our communities.”

Investor Owned Utilities (IOU) such as Pacific Gas & Electric and Southern California Edison negotiate rates with the CPUC once every three years in a General Rate Case (GRC) proceeding. As part of this, they agree to fund a certain amount of safety improvement projects to their existing infrastructure — which is vast, and in many cases, desperately in need of repair. The problem is, after the GRC is established, an IOU can redirect those public safety funds. Since the GRC is a 3-year process, the CPUC may not be informed of redirected funds for more than three years later.  SB 549 closes this loophole by requiring IOUs to annually report to the CPUC when they divert funds they agreed to spend on safety improvement projects.

“Plain and simple, it is imperative that all Californians and the CPUC know when our utility companies are not funding safety projects as they promised they would,” said Senator Bradford.  “SB 549 makes the necessary change in current law to increase the transparency and oversight of our utility companies.”

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Senator Bradford represents the Los Angeles County communities of Carson, Compton, Gardena, Harbor City, Hawthorne, Inglewood, Lawndale, Lennox, San Pedro, Watts, Willowbrook, and Wilmington.