Commentary on constitutional public utilities provisions

The following provides commentary regarding the specific provisions of Article XII of the California Constitution, which deal with public utilities in this state.

SECTION 1.
The Public Utilities Commission consists of 5 members appointed by the Governor and approved by the Senate, a majority of the membership concurring, for staggered 6-year terms. A vacancy is filled for the remainder of the term. The Legislature may remove a member for incompetence, neglect of duty, or corruption, two thirds of the membership of each house concurring.

            Commentary: This section sets forth the composition of the PUC, including their appointment and confirmation. There are three bases for the Legislature to remove a PUC commissioner.

SEC. 2.
Subject to statute and due process, the commission may establish its own procedures. Any commissioner as designated by the commission may hold a hearing or investigation or issue an order subject to commission approval.        

Commentary: The PUC sets forth its procedures, in addition to applicable statutes enacted by the Legislature. The five individual commissioners can hold hearings and investigations.

SEC. 3.
Private corporations and persons that own, operate, control, or manage a line, plant, or system for the transportation of people or property, the transmission of telephone and telegraph messages, or the production, generation, transmission, or furnishing of heat, light, water, power, storage, or wharfage directly or indirectly to or for the public, and common carriers, are public utilities subject to control by the Legislature. The Legislature may prescribe that additional classes of private corporations or other persons are public utilities.

            Commentary: This section sets forth what are public utilities that are subject to control by the Legislature, which enacts statutes governing the regulation of public utilities, and can add other businesses as regulated public utilities.

SEC. 4.
The commission may fix rates and establish rules for the transportation of passengers and property by transportation companies, prohibit discrimination, and award reparation for the exaction of unreasonable, excessive, or discriminatory charges. A transportation company may not raise a rate or incidental charge except after a showing to and a decision by the commission that the increase is justified, and this decision shall not be subject to judicial review except as to whether confiscation of property will result.
            Commentary: The PUC determines procedures regulating transportation companies, including the payments charged, which must be justified. Those determinations are subject to limited judicial review.

SEC. 5.
The Legislature has plenary power, unlimited by the other provisions of this constitution but consistent with this article, to confer additional authority and jurisdiction upon the commission, to establish the manner and scope of review of commission action in a court of record, and to enable it to fix just compensation for utility property taken by eminent domain.

            Commentary: This provision grants exclusive authority to the Legislature to enact laws related to the regulation of public utilities in this state, including court appeals and eminent domain actions.

SEC. 6.
The commission may fix rates, establish rules, examine records, issue subpenas, administer oaths, take testimony, punish for contempt, and prescribe a uniform system of accounts for all public utilities subject to its jurisdiction.

            Commentary: The PUC regulates all aspects of public utilities subject to PUC jurisdiction.

SEC. 7.
A transportation company may not grant free passes or discounts to anyone holding an office in this State; and the acceptance of a pass or discount by a public officer, other than a Public Utilities Commissioner, shall work a forfeiture of that office. A Public Utilities Commissioner may not hold an official relation to nor have a financial interest in a person or corporation subject to regulation by the commission.

            Commentary: Any transportation company cannot give any elected local, state, or federal elected officials any free passes or discounts. An elected official who accepts a free pass or discount will forfeit his or her office. The five PUC Commissioners cannot have any financial interest in those subject to PUC regulation.

SEC. 8.
A city, county, or other public body may not regulate matters over which the Legislature grants regulatory power to the Commission. This section does not affect power over public utilities relating to the making and enforcement of police, sanitary, and other regulations concerning municipal affairs pursuant to a city charter existing on October 10, 1911, unless that power has been revoked by the city’s electors, or the right of any city to grant franchises for public utilities or other businesses on terms, conditions, and in the manner prescribed by law.

            Commentary: Local governments in this state are prohibited from regulating matters under the jurisdiction of the PUC.