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Senator Hill - CPUC - Balancing Accounts

Senator Jerry Hill
Senator Jerry Hill

Sen. Jerry Hill, Citing State Auditor’s Report, Calls On CPUC To Strengthen Oversight Of Billions of Ratepayer Dollars Held By Utilities in “Balancing Accounts”


Auditor Takes Commission to Task For Failing To Keep Track of $37 Billion And Not Adequately Protecting Utility Customers From Unreasonable Rate Increases

SACRAMENTO -- A long-awaited report released today by the California State Auditor concluded the Public Utilities Commission (CPUC) reviewed only “58 percent of the value of large energy utilities' balancing accounts active during 2009 through 2011, leaving a value of $37.6 billion in other balancing accounts unreviewed.”

State law requires the commission to audit balancing accounts – on which utilities earn interest – to ensure utility customers pay only the amount of money required for service they receive.

“It’s alarming the auditor found the CPUC does not ensure balancing accounts are adequately reviewed to protect customers from unreasonable rate increases,” said state Senator Jerry Hill, D-San Mateo.

Currently, “the commission only reviews balancing accounts when a utility requests to incorporate the balance in that account into future rates as a surcharge or a credit,” according to the audit.

Among the auditor’s recommendations are that the CPUC audit all balancing accounts periodically, the frequency depending on the risk to ratepayers of utility mismanagement.

“The recommendations are so commonsense that it’s shocking the CPUC has not been performing this level of oversight to protect customers,” Hill said. “This is another example that under the leadership of President Michael Peevey the commission has been hamstrung by a culture of incompetence.”

The audit was conducted after the non-partisan Legislative Analyst's Office (LAO), in a report issued on Feb. 19, 2013, found the CPUC has been failing to complete basic audits of these accounts as required by state statute since 1976.

The LAO report was released on the heels of an audit by the Department of Finance, which found significant weaknesses in the CPUC’s budgetary operations in its own 14 special funds, including an $81-million dollar typo.


Report 2013-109

Improved Monitoring of Balancing Accounts Would Better Ensure That Utility Rates Are Fair and Reasonable

Fact Sheet   Summary   Full Report


Nate Solov

Office of Senator Jerry Hill



News Release - Office of Sen. Jerry Hill - www.senate.ca.gov/hill

CONTACT: Aurelio Rojas 916-747-3199 cell

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Chuck Zelnik March 05, 2014 at 11:24 PM
The CPUC has failed at all levels of oversite for the protection of rate payers dollars and safety. It is time to shut down the CPUC and reform the oversite program to better serve the people. Hill should start with a big broom.


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