10. Other Issues
10.1. Does the Federal decision to fund a portion of the costs of the HECA studies rely on ratepayer's participation in funding?
SCE argues that
... the DOE has a history of favoring clean coal projects with strong public support. In fact, since 1996, the DOE has awarded clean coal grants or tax credits to IGCC projects of over $100 million each to six projects, and each of the six projects involves regulated utility rate-based funding support.127
HEI notes that DOE's National Energy Technology Laboratory selected HEI for a $308 million award. HEI states that it is its position
... that project applications for federal incentives, whether they are tax credits or grant funding, are selected based on their technical merit as well as whether the projects enjoy broad public support, local regulatory support and permitting support, and satisfy cost-sharing requirements. It is inarguable that participation by a State, as represented by the approval of the participation of its ratepayers in co-funding a project study, is a strong indication of support that improves the likelihood of federal incentives being awarded to the HECA Project.128
TURN takes a very different approach to this matter. TURN argues that "there is no specific provision in the federal economic stimulus legislation from either late 2008 or early 2009 that would distinguish between utility shareholders or ratepayers as the source of funding."129 TURN notes further that
There is no clear evidence that the DOE cared one way or the other about whether the cofunding in support of an application for CCPI-3 funds came from utility ratepayers rather than utility shareholders (or any other non-federal source).130
Under § 454(a), the Commission's obligation is to determine "upon a showing before the commission and a finding by the commission that the new rate is justified."131 The evidence in the record of the proceeding is sufficient to support a finding that the new rate is justified because the benefits accruing to SCE ratepayers are sufficient to warrant the commitment of $30 million of ratepayer funding to this project.
For this reason, there is no need to address the question of whether state support for the HECA project was a critical factor in the DOE's decision to award it a $308 million grant.
10.2. Warm-line and confidentiality issue?
TURN, citing D.09-03-025, argues that SCE has failed to meet its burden of proving by a preponderance of the evidence that granting its request is reasonable. TURN also argues:
In addition to these general rules of burden and standard of proof, there are two additional more specific principles that apply to SCE's showing in this proceeding. First, consistent with the Commission's treatment of a similar issue in the recent Warm Line complaint case, a party that makes a specific claim needs to prove the related facts, particularly where the information necessary to prove the related facts is largely within control of that party.
And on this point, TURN concludes:
SCE and HEI made general assertions that using ratepayer funds, rather than shareholder funds, as a contribution to the co-funding would demonstrate a greater level of support for the HECA project and, by extension, make it more likely the project would receive an award of DOE funds through the CCPI-3 solicitation. But when pushed for a specific citation to any provision of the Emergency Economic Stabilization Act of 2008 or the American Recovery and Reinvestment Act of 2009 that supports such an assertion, SCE and HEI conceded "there are no specific provisions in the economic stimulus bills regarding the source of funding."
TURN also raises another, but related, legal issue:
The unusual circumstances of this proceeding implicate a second rule regarding burden and standard of proof that arises where, as here, a party chooses not to provide information due to claims of confidentiality. Even if it assumes such claims are valid, the Commission has previously recognized that the onus of such claims falls on the party making them. That is, the party claiming confidentiality must meet its burden of proof with other material or risk denial of its requested relief. ... As TURN will describe in greater detail below, the broad claims of confidentiality left such a scant evidentiary record on the reasonableness of rate recovery issue that the Commission cannot grant the application.
In response, SCE argues that "Warm Line is inapposite."132 SCE states that it has "never contended that there are specific statutory provisions that require ratepayer funding as a precondition for federal funding."133 SCE states that instead, it has argued that "it is reasonable to conclude that ratepayer funding (as opposed to shareholder funding) enhances the opportunity for the HECA feasibility study to receive federal funding."134
Concerning TURN's objection to HEI's confidentiality claims, SCE responds:
SCE has provided sufficient HECA feasibility cost data, and intervenors do not need to review confidential details. Indeed, resolution E-4227A required SCE to provide a detailed budget "so that when SCE files its application for cost recovery SCE can demonstrate that its portion of the co-funding was less than 50% of the total study costs." SCE has fulfilled this requirement.135
As our discussion in above made clear, our assessment of the reasonableness of the funding of 20 percent of the cost of feasibility studies by ratepayers does not require us to determine that ratepayer funding was critical to DOE's decision to award $308 million to this project. Since this is the case, the Warm Line argument, which pertains to whether SCE has demonstrated that the DOE action depended upon ratepayer funding, is not relevant.
Similarly, since the SCE budget provided in the record of this proceeding and the testimony of Cortez demonstrated that the costs were reasonable and far less than 50% of the total costs of the studies, we do not need access to the additional data under DOE's confidentiality protections to make a determination that the costs are reasonable.
We found above that SCE has met its burden of demonstrating by a preponderance of the evidence that the costs it incurs in participating in the funding of the HECA project are reasonable. Based on the more than adequate data provided in its budgetary showing, SCE has shown that the costs are reasonable and less than 50% of total costs for the HECA studies.
127 SCE Opening Brief at 32.
128 HEI Opening Brief at 25-26.
129 TURN Opening Brief at 30.
130 Id.
131 § 454(a).
132 SCE Reply Brief at 30.
133 Id.
134 Id. at 31.
135 Id. at 35.
