Governor Jerry Brown’s proposed 2013-14 budget earmarks $192 million for various proposals, financed by a surcharge on investor-owned utility electricity bills.
The independent Legislative Analyst’s Office (LAO) said in a recent review of the budget that it might not be a good idea to count on that money because the Public Utilities Commission (CPUC) never received authorization from the Legislature to collect the surcharge, which it has been diligently doing since January 2012.
The analyst’s office offered up that tidbit of information by way of recommending that the Bureau of State Audits conduct a full review of the commission’s activities because, “These findings raise questions about CPUC’s ability to effectively audit the records and accounts of the utilities that it regulates.”
It wasn’t just the surcharge that caught the analyst’s eye. Back in December, the Office of State Audits and Evaluations (OSAE) in the Department of Finance did its own audit of the CPUC’s practices and procedures, and identified “significant weaknesses” that prevent the commission from preparing “reliable and accurate budget information.”
That audit found “fiscal mismanagement,” inaccurate reconciliations of funds, inexplicable conflicts between the commission’s budget forecasting and actual results, and a lousy organizational structure that allows it all to happen. In particular, the audit found “records that did not include certain fund transactions that ranged from roughly $40,000 to $275 million.”
The so-called “balanced accounts” that were reviewed are used to track revenues and expenditures for specific programs, like energy efficiency. If a particular program brings in more money to a utility than is authorized by law, money is supposed to be refunded to ratepayers. There are no refunds without proper accounting, which the CPUC is supposed to do every three years.
–Ken Broder
To Learn More:
Analyst Recommends Audit for CPUC Accounts (Associated Press)
The 2013-14 Budget: Resources and Environmental Protection (Legislative Analyst’s Office)