II. DISCUSSION
A. Summary Comparison of the Corrected D.08-04-039 and AB 1338
On April 24, 2008, we approved the Corrected D.08-04-039 authorizing establishment of the CICS. To fund the contemplated R&D grants, we approved ratepayer funding of $60 million per year for 10 years to be collected via a new surcharge on electric and gas utility customer bills.6 The CICS would also be required to obtain non-ratepayer matching funds beginning in Year 5.7 R&D grant proposals without discernable ratepayer benefit, consistent with a Commission approved CICS Strategic Plan and Ratepayer Benefit Index, would not receive ratepayer funding.8
Our Decision provides surcharge exemptions for gas-fired electricity generators (gas charge exemption), and customers whose rates are capped under AB 1X and customers eligible for California's Alternative Rates for Energy ("CARE") program (from the electric and gas surcharge).9 Total commodity plus non-commodity residential electric rates for usage up to 130% of baseline would remain unchanged.10 We directed the utilities to allocate the additional revenues on an equal cents per kWh or cents per Therm basis,11 and to hold collected funds to be paid out directly to each grantee and the CICS hub.12
We also established specific requirements with respect to the CICS's structure and governance.13 We would have retained oversight and control of the CICS by retaining authority to approve: certain appointments to the Governing Board and Executive Committee; the Strategic Plan; the annual budget; the annual report and external financial audit; the biennial external performance review; and various policies and protocols.14
On September 30, 2008, the Governor approved AB 1338. In pertinent part, AB 1338 provides:
SEC. 27. (a) The Public Utilities Commission shall not execute an order, or collect any rate revenues, in Rulemaking 07-09-008 (Order Instituting Rulemaking to establish the California Climate Institute for Climate Solutions), and shall not adopt or execute any similar order or decision establishing a research program for climate change unless expressly authorized to do so by statute.
(b) This section does not constitute a change in, but is declaratory of, existing law.
B. Effect of AB 1338
Passage of AB 1338 requires that we reconsider the applicability and continued viability of our Decision. We believe that in the absence of such explicit legislation, our Decision was lawful and within our authority. However, we recognize that our inherent and broad authority is limited when the Legislature acts to impose a specific limit on that authority or otherwise provides explicit direction regarding a particular matter.15
For this reason, we conclude that in this instance, AB 1338 controls to prohibit our authorization of funds to support the CICS. Accordingly, we believe the reasonable course is to vacate the Decision. Due to the effect of AB 1338, the applications for rehearing of Corrected D.08-04-039 are rendered moot and will be dismissed.16
Notwithstanding the need to take these actions, we disagree with the statement in AB 1338 that it "does not constitute a change in, but is declaratory of, existing law." AB 1338 is not representative of the law at the time we originally authorized the CICS. Rather, it represents a new and explicit constraint on our authority to do so.
Our reading of the Legislative history for AB 1338 confirms our understanding that the Legislature intended only to require that we seek legislative approval prior to establishing any specific climate institute; it did not intend to preclude us for authorizing R&D funds that may be tangentially related to climate change in our management of various other programs.17
6 See Corrected D.08-04-039, at pp. 6, 18-28.
7 See Corrected D.08-04-039, at pp. 9-10, 23, 73 [Ordering Paragraph Number 10].
8 See Corrected D.08-04-039, at pp. 22-23, 58 [Finding of Fact Numbers 9, 10] & p. 65 [Conclusion of Law Number 5].
9 Corrected D.08-04-039, at pp. 71-72 [Ordering Paragraph Number 4].
10 Corrected D.08-04-039, at pp. 71-72 [Ordering Paragraph Number 4].
11 Corrected D.08-04-039, at p. 72 [Ordering Paragraph Number 5].
12 Corrected D.08-04-039, at pp. 71-72 [Ordering Paragraph Number 4].
13 Corrected D.08-04-039, at pp. 32-47 (including related attachments).
14 Corrected D.08-04-039, at p. 65 [Conclusion of Law Number 4].
15 See e.g., Southern California Edison Company v. Peevey ("Edison v. Peevey") (2003) 31 Cal.4th 781, 792; PG&E Corporation v. Public Utilities Commission ("PG&E v. PUC") (2004) 118 Cal.App.4th 1174, 1199-1200.
16 In conjunction with the applications for rehearing, the Joint Parties and CFC also filed a Motion to Stay D.08-04-039. The Motion sought to postpone any rate impacts from the Decision until disposition of the applications for rehearing. The Motion for Stay is also rendered moot by the dismissal of the applications for rehearing.
17 See e.g., Legislative History for AB 1338, which states:
Institute for Climate Solutions: Requires that the Public Utilities Commission (PUC) to obtain legislative approval prior to establishing the Institute for Climate Solutions.
(Sen. Rules Comm., Off. Of Sen. Floor Analyses, 3d reading of AB 1338 (2008-2009 Reg. Sess.) as amended Sept. 15, 2008, p. 2.)
