3. Legal Background
Under § 454(a) of the Public Utilities Code,
Except as provided in Section 455, no public utility shall change any rate or so alter any classification, contract, practice, or rule as to result in any new rate, except upon a showing before the commission and a finding by the commission that the new rate is justified.
Thus, the Commission must review utilities' projects that lead to changes in rates to ensure that they are just and reasonable. In addition, the burden of making a showing that the proposed rates are just and reasonable rests with the utility requesting the change in rates.
In this case, the responsibility for showing that the SCE's contribution of $30 million to the feasibility studies associated with the HECA project falls to SCE. Specifically, although Resolution E-4227A directed SCE to fund Phase I of the feasibility studies,15 the responsibility for showing the reasonableness of funding the feasibility studies remains with SCE.
Resolution E-4227A denied SCE's advice letter request for authorization of costs recorded in the HECAMA, but instead permitted SCE to seek recovery of these costs "by filing an application with the Commission requesting authority for recovery of the costs."16 In addition, Resolution E-4227A imposed specific requirements on any application to recover project costs:
10. In any future application for approval of costs related to the HECA study, SCE should include an explanation of how its proposal fits its overall procurement strategy, as directed by D.08-04-038. Further, SCE should include, in such an application, a plan to publicize detailed study results to the greatest extent possible.
11. In any future application for approval of costs related to the HECA study, SCE should provide notice to all parties to D.06-05-016 and D.07-12-052 any other relevant decisions or proceedings.
12. In any future application for approval of costs related to the HECA study, SCE should include a detailed budget for the HECA study.17
Furthermore, Resolution E-4227A states that:
Consistent with the findings in D.08-04-038, all information developed in Phase I and the detailed results of the study should be made publicly available to the greatest extent possible (with the limited exception of the intellectual property of the persons or entities hired to perform the studies). Such public disclosure is both desirable and necessary in order to advance development of this technology.18
Thus, an information disclosure plan remains key to the reasonableness of SCE's participation in the HECA project.
15 As noted earlier, the ordering paragraph directing SCE to contribute to the feasibility study was removed upon rehearing.
16 Resolution E-4227A at 1.
17 Resolution E-4227A, Findings at 17.
18 Resolution E-4227A at 14.
