Report 2022-115 Recommendation 4 Responses

Report 2022-115: Electricity and Natural Gas Rates: The California Public Utilities Commission and Cal Advocates Can Better Ensure That Rate Increases Are Necessary (Release Date: August 2023)

Recommendation #4 To: Public Utilities Commission

To ensure the appropriateness of the activities that utilities include in their cost recovery applications and to reduce the risk of utilities' attempting recovery of costs for work they did not complete, the CPUC should by the beginning of February 2024 develop a process to include an audit procedure that requires, on a sample basis, verification that work was completed as claimed in the utility's cost recovery application. Such verification could involve, for example, site visits, photographic evidence of work completed, or satellite imagery.

60-Day Agency Response

Since the CSA audit report was issued, UAB has included the additional audit procedure in three more audits (Alisal Water Company Balance Accounts - completed audit, Bear Valley Electric Balancing Accounts - audit in progress, and PG&E Balancing Accounts - audit in progress). UAB will continue to include a procedure that requires verification of work completed/performed, on a sample basis, and if appropriate for the type of expenditure/activity claimed.

California State Auditor's Assessment of 60-Day Status: Fully Implemented

All Recommendations in 2022-115

Agency responses received are posted verbatim.