6. General Order 24-B

6.1. Parties Positions

In their Workshop Report, the Joint Energy Utilities suggest that reporting be on a quarterly instead of a monthly basis. The Joint Energy Utilities also state that, given the current banking system utilized by the major utilities, they should no longer be required to keep funds derived from the sale of securities in a separate bank account, but instead, maintain records and accounts that demonstrate the appropriate use of funds in compliance with Public Utilities (Pub. Util.) Code § 817. The Joint Energy Utilities reiterate this point in their Opening Comments to the Proposed Decision.

In their Pre-Workshop Statement, CWA and Class A water suggest that if GO 24-B is retained, then reporting should be on an annual basis, stating that since the water utilities issue debt on such an infrequent basis, there is no need to issue a report any more often, and such monthly or quarterly reports would be burdensome and costly for the water utilities to produce.

6.2. Discussion

Revisions to GO 24-B include: 1) the filing of a GO 24 report on a quarterly instead of a monthly basis for the first year of the Financing Rule. Commencing in the second year, reports will be filed semi-annually (June and December); and 2) revisions to the type of information provided in such reports;

We streamline and update the GO 24-B reporting process, requiring utilities to report on a quarterly basis in the first year after this decision and on a semi-annual basis (instead of a monthly) thereafter, unless Commission staff requests a report more often. If a utility has no reportable transactions for the applicable period (quarterly/semi-annually), it may state such as its report for that period. We adopt this revision to GO 24-B in order to save both utilities and Commission staff resources.

We also eliminate the requirement that a utility maintain a separate bank account to record money derived from the sale of securities, except as discussed below. Such an account was required to ensure that utilities used the proceeds from securities for proper purposes pursuant to Pub. Util. Code § 817. In their Workshop Report, the Joint Energy Utilities gave the Commission information on current banking practices, which provides the assurance the Commission requires to ensure funds are used for proper purposes and therefore a separate bank account is no longer required.

In instances where the Commission specifically designates what the proceeds can be used for, such as for a specific construction project, a separate bank account will make it easier for the Commission to track these funds, preserve a strong audit trail, and the additional record keeping is not burdensome. In addition, the California Department of Water Resources requires utility recipients of Safe Drinking Water State Revolving Fund loans, which are repaid via a surcharge, to maintain separate bank accounts for these funds.  Therefore, in instances where the Commission specifically designates what the proceeds can be used for, or in the instances where the loan will be repaid by surcharge, we continue to require those utilities to maintain a separate bank account for recording of the proceeds. 

We also adopt the updated list of information required in the GO 24-B report, given the manner in which securities transactions are now recorded by utilities as required by other regulatory entities, such as the Depository Trust Corporation.

We therefore adopt General Order 24-C incorporating these revisions, as shown in Attachment B to this decision.