Report 2013-109 Recommendation 7 Responses

Report 2013-109: California Public Utilities Commission: Improved Monitoring of Balancing Accounts Would Better Ensure That Utility Rates Are Fair and Reasonable (Release Date: March 2014)

Recommendation #7 To: Ratepayer Advocates, Office of

To further its mission to obtain the lowest possible rates for reliable and safe utility service for ratepayers through its reviews of balancing accounts, Ratepayer Advocates should use the commission's list of balancing accounts to guide its selection of the number, size, and type of balancing accounts to review so that its review coverage is more proportional across all utilities.

Annual Follow-Up Agency Response From October 2016

When conducting an examination of balancing accounts, it is important to use the most recent and relevant information. ORA obtains the most recent data on balancing and other accounts directly from the investor-owned utilities (IOU). This information is often timelier than information provided by the IOUs to the Commission through their annual reporting requirements. Furthermore, AB 2168 (Chapter 805, Statutes of 2016) requires the Commission to adopt procedures to prioritize their review of balancing accounts, and that these procedures "do not apply to the Office of Ratepayer Advocates".

California State Auditor's Assessment of Annual Follow-Up Status: Will Not Implement


Annual Follow-Up Agency Response From September 2015

As described to the California State Auditor in our letter of February 11, 2014, ORA's process for reviewing balancing accounts is based on an assessment of the potential for finding disallowances. There is no requirement in state law that ORA audit monitor utility accounts. ORA performs audits to determine the potential for ORA to recommend disallowances and to help our overall litigation strategy. It would not be efficient for ORA to simply try to audit balancing accounts in a random or proportional basis. Since the task is not part of our mandate by state law, there is no ability for ORA to perform this recommendation or to request resources to carry out this recommendation. Targeted audit reviews, based on a potential for discovering disallowances that the commission will accept, is the reason ORA performs any audits. This is the approach ORA will continue to take when determining which accounts to review.

California State Auditor's Assessment of Annual Follow-Up Status: Will Not Implement


1-Year Agency Response

Ratepayer Advocates did not provide its one-year response to this recommendation. However, based on its previous responses to this recommendation, Ratepayer Advocates will not implement this recommendation.

  • Estimated Completion Date:
  • Response Date: April 2015

California State Auditor's Assessment of 1-Year Status: Will Not Implement

Ratepayer Advocates did not provide any documentation to support its latest response. As we noted in our report, during the audit Ratepayer Advocates was unable to provide us with any evidence of the approach it described—such as a written policy or methodology, or contemporaneous documentation of its reasons for determining which balancing accounts are most significant to its mission and that it will review.


6-Month Agency Response

Please see explanation from 60-Day Response.

  • Response Date: October 2014

California State Auditor's Assessment of 6-Month Status: Will Not Implement

As we noted in our report, during the audit Ratepayer Advocates was unable to provide us with any evidence of the approach it described—such as a written policy or methodology, or contemporaneous documentation of its reasons for determining which balancing accounts are most significant to its mission. Ratepayer Advocates did not provide any documentation to support its latest response. Lacking this documentation, we are unable to evaluate or verify Ratepayer Advocates' assertion of employing an approach based on an assessment of the potential for finding disallowances.


60-Day Agency Response

As described to the California State Auditor in our letter of February 11, 2014, ORAs process for reviewing balancing accounts is based on an assessment of the potential for finding disallowances. That assessment is a function of the type of account, a preliminary review of the potential for disallowances and an overall litigation strategy. It would not be efficient for ORA to simply try to cover balancing accounts in a random or proportional basis. Resources are always limited and therefore targeted audit reviews based on a potential for discovering disallowances that the commission will accept is the preferred approach. This is the approach ORA will continue to take when determine which accounts to review.

  • Response Date: May 2014

California State Auditor's Assessment of 60-Day Status: Will Not Implement

As we noted in our report, during the audit Ratepayer Advocates was unable to provide us with any evidence of the approach it described—such as a written policy or methodology, or contemporaneous documentation of its reasons for determining which balancing accounts are most significant to its mission. Ratepayer Advocates did not provide any documentation to support its latest response. Lacking this documentation, we are unable to evaluate or verify Ratepayer Advocates' assertion of employing an approach based on an assessment of the potential for finding disallowances.


All Recommendations in 2013-109

Agency responses received are posted verbatim.


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