III. CONCLUSION

For the reasons stated above, we will vacate the Decision and dismiss the applications for rehearing of Corrected D.08-04-039, as moot.

THEREFORE, IT IS ORDERED that:

1. Corrected D.08-04-039 is hereby vacated.

2. The Energy Division shall cease any efforts to review and approve utility advice letters filed in connection with Corrected D.08-04-039.

3. The applications for rehearing of Corrected D.08-04-039 are dismissed as moot.

4. This proceeding, Rulemaking (R.) 07-09-008, is closed.

This order is effective today.

Dated November 21, 2008, at San Francisco, California.

MICHAEL R. PEEVEY

President

DIAN M. GRUENEICH

JOHN A. BOHN

RACHELLE B. CHONG

TIMOTHY ALAN SIMON

Commissioners

Commissioner Grueneich reserves the

right to file a concurrence.

/s/ DIAN M. GRUENEICH

Commissioner

Concurrence of Commissioner Dian M. Grueneich

I concur with the proposed Order to the extent that the Order vacates Decision 08-04-037, establishing the California Climate Institute for Climate Solutions (CICS Decision), and dismisses the Applications for Rehearing of that Decision.

However, I strongly disagree with including in this Order the three sentence analysis and conclusion regarding this Commission's interpretation of Section 27(b) in AB 1338:

". . .[W]e 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." (Order, p. 5)

First, this statement is unnecessary to the resolution of the applications for rehearing of the CICS Decision. We vacate the CICS Decision, rendering the applications moot. The question of whether this Commission had the authority in the past to create the CICS is not relevant to our future actions. As the Order points out in the next paragraph, state law now prohibits this Commission from taking similar action unless it has Legislative authorization. There is no policy or other purpose served by dicta "rejecting" the Legislature's interpretation of its own laws.

Second, I am not prepared to adopt the conclusion that the Commission has authority in a legal sense to "disagree" with the Legislature's interpretation of its own statutes. There is no explanation of what step this Commission is actually taking when it "disagrees" with a statute. This Commission does not have the authority to ignore, reject or refuse to comply with laws applicable to it and it is of no legal effect to make a statement of "disagreement."

Third, parties to this proceeding have argued that this Commission does not have the legal authority to establish an independent entity and cede control over ratepayer funds to that entity. These parties point out that the Commission previously attempted to create an independent entity, the California Board for Energy Efficiency, just ten years ago. This Commission abandoned this effort due to serious concerns regarding the Commission's legal authority. In that case, the Commission sponsored legislation to give it the authority to establish the entity which was vetoed.

As stated in the Concurrence of Commissioner Bohn to the CICS Decision, which I joined, "This decision pushes the boundaries of our duty and our jurisdiction almost to the breaking point." In an April 28, 2008 letter, the Office of Legislative Counsel concluded that this Commission did not have the authority to adopt the CICS. The Office of Legislative Counsel found that while this Commission has broad authority over rates and services provided to ratepayers, this authority does not extend broadly to any matter that has some bearing upon regulated utilities. While there can be legitimate disagreement over whether decisions like the CICS falls within the scope of our authority, there can be no argument that our authority does have limits.

I thus disagree with including in our Order the above referenced sentences. The statements are a broad brush and entirely unnecessary interpretation of Section 27(b) of AB 1338. I support the result of the Order but do not support inclusion of this paragraph in the Order.

Dated November 21, 2008, at San Francisco, California.

/s/ DIAN M. GRUENEICH

Dian M. Grueneich Commissioner