4. Discussion
The issue to be resolved in this proceeding is strictly one of statutory interpretation. The Commission must determine whether § 366.1(b) requires Cerritos to serve all retail end-use customers in its jurisdiction on an opt-in or opt-out basis and whether Cerritos had been granted a complete exemption from the suspension of direct access service, thus warranting removal of the ILL from the AB 80 Agreement.
Under the rules of statutory construction, the Commission must
look to the statute's words and give them their usual and ordinary meaning. The statute's plain meaning controls the court's interpretation unless its words are ambiguous. If the statutory language permits more than one reasonable interpretation, courts may consider other aids, such as the statute's purpose, legislative history, and public policy.
. . .
Where more than one statutory construction is arguably possible, our policy has long been to favor the construction that leads to the more reasonable result. This policy derives largely from the presumption that the Legislature intends reasonable results consistent with the apparent purpose of the legislation. Thus, our task is to select the construction that comports most closely with the Legislature's apparent intent, with a view to promoting rather than defeating the statutes' general purpose, and to avoid a construction that would lead to unreasonable, impractical, or arbitrary results.16
We find that the statutory language is clear that Cerritos has been authorized to offer service on an opt-in basis. Section 366.1(b) states that the authority granted to Cerritos is "notwithstanding" Water Code § 80110 and D.01-09-060. Both of these relate solely to the suspension of direct access service and this service is obtained by retail end-use customers on an opt-in basis. Further, as Cerritos notes, the term "community aggregator" was a term of art used in the context of direct access service. Additionally, at the time AB 80 was enacted, § 366, which concerned direct access service, stated:
If a public agency seeks to serve as a community aggregator on behalf of residential customers, it shall be obligated to offer the opportunity to purchase electricity to all residential customers within its jurisdiction.
By providing that residential customers be "offer[ed] the opportunity to purchase electricity" from the community aggregator, the Legislature signaled that customers would be able to affirmatively select this service. Affirmative selection may only be done on an opt-in, not opt-out, basis. In light of these considerations, AB 80 can only be interpreted as authorizing MPP participants to offer community aggregation service on an opt-in basis.
We find the statutory language ambiguous, however, on whether AB 80 granted Cerritos a complete exemption from the suspension of direct access service or an exemption only up to its entitlement share of generation power from MPP. Under § 366.1(b), MPP participants may serve as community aggregators "if the Magnolia Power Project has been constructed and is otherwise capable of beginning deliveries of electricity to the existing project participants." However, it is not clear whether construction of MPP is a condition precedent before Cerritos would be exempt from the direct access suspension or whether power delivered from MPP is exempt from the direct access suspension. Thus, we must look at the legislative history and interpret the statute in a manner that would give the more reasonable result.
A review of the legislative history of AB 80 reveals that the purpose of this bill was to ensure that MPP would be completed. The bill states it is the intent of the Legislature
to recognize contributions made in response to California's need for the expedited investment in and development of new environmentally superior electrical generation projects. [ ] It is further the intent of the Legislature to avoid the potential delay in adding new electrical generating capacity that might be caused if certain project participants are not allowed to utilize community aggregation to deliver their share of the project output to customers within their jurisdiction.17
Analyses by various state agencies further demonstrate that AB 80 was to address concerns that MPP would not be completed if the MPP participants were not able to sell power from the plant on a retail basis. For example, the Department of Water Resources states: "It is unclear whether [Cerritos and San Marcos], absent enactment of [AB 80], would be able to recoup their investment in MPP through other means such as sale of the power at wholesale."18 The California Energy Commission also notes that AB 80 would allow Cerritos "to serve as a power aggregator on behalf of all retail end-use customers within its jurisdiction for purposes of procuring electricity from the plant" and "would ensure that the current financing arrangements for the Magnolia Power Project remain valid."19 Further, if there was no assurance that Cerritos and San Marcos could sell power from MPP to retail end-use customers, "it is unknown whether or not they would continue with [MPP] and unclear whether or not [MPP] would go forward without the participation of Cerritos and San Marcos."20 Moreover, in a letter to Senator Bowen seeking her support for AB 80, Cerritos states:
AB 80 recognizes the importance of the timely development of the MPP, an environmentally superior electricity generating project that will positively contribute to the State's urgent need for more generating capacity to be brought on line in the next few years.21
Similarly, "withdrawal of [Cerritos and San Marcos from MPP] may cause a delay or suspension in the development of the project, thereby forestalling needed electrical generation within California."22 Finally, this Commission's analysis concludes that AB 80 "provides a limited exception to the direct access suspension in AB X1 1."23
None of the supporting documentation provided by Cerritos or SCE expresses any intent that Cerritos was to be granted a complete exemption from the suspension of direct access service. Rather, the documents demonstrate that the exemption was to ensure that MPP could be completed and provide needed generation capacity. Further, we agree with SCE that interpreting AB 80 as granting a complete exemption from the suspension of direct access service would put MPP participants in a better position than other electric service providers. It is unlikely that the Legislature would have intended such an outcome. Consequently, the more reasonable interpretation of AB 80 is that exemption from the suspension of direct access service is limited to energy provided from MPP. Accordingly, we deny Cerritos' request to eliminate the ILL from the AB 80 Agreement. However, we believe the load limit should be modified to reflect Cerritos' share of output from the MPP on an energy basis.
Cerritos has argued that § 366.1(b) is unambiguous and AB 80 provides for a complete exemption from the suspension of direct access service. This argument is based primarily on a Legislative Counsel opinion issued in connection with AB 1169. We find Cerritos' reliance misplaced. Among other things, AB 1169 had sought to clarify that § 366.1 did not require Cerritos to rely solely on power from MPP, and the Legislative Counsel opinion was to assist the Legislature in its consideration of that bill. The fact that AB 1169 sought this clarification would suggest that the language in § 366.1 was not as clear as Cerritos would like to believe. Further, AB 1169 was never enacted, and the Legislative Counsel opinion was not used to assist the Legislature in its consideration of AB 80.24 Thus, we do not find the Legislative Counsel's opinion persuasive in this case.
We also are not persuaded by Cerritos' arguments that the ILL should be eliminated because AB 80 is self-limiting or could prevent Cerritos from realizing the full economic benefit of its investment in MPP. As we discussed above, it would be unreasonable to interpret AB 80 as granting Cerritos a complete exemption from the suspension of direct access service. The fact that Cerritos' proposed interpretation of AB 80 would not result in a significant increase in the amount of load that could be served by Cerritos is not a compelling reason to adopt it.
Finally, we find Cerritos' claims of a lack of resource diversity unpersuasive. Under the AB 80 Agreement:
If Cerritos is required under law to participate as a retail seller in the renewable portfolio standard program, then upon the effective date of such requirement, the Initial Load Limit shall increase by the amount of renewable generation, qualified under Section 1078 of the California Public Utilities Code (the "P.U. Code"), that Cerritos is obligated to acquire under the renewable portfolio standard program. The Parties shall execute a written amendment to this Agreement to effectuate any such increase in the Initial Load Limit.25
The Scoping Memo issued by the assigned Commissioner and ALJ determined that prior Commission decisions require Cerritos to be subject to the renewables portfolio standard (RPS) requirements and to participate in the RPS program.26 We affirm that determination in this decision. Since Cerritos is required to procure electricity from renewable resources, there is no lack of resource diversity.
For these reasons, we believe the AB 80 Agreement should be amended to reflect that Cerritos' load limit is based on its share of output from MPP on an energy basis. Further, as discussed above, the ILL should include Cerritos' RPS obligations. Therefore, if SCE and Cerritos have not already increased the ILL pursuant to ¶ 4.a of the AB 80 Agreement, they should amend the Agreement within 90 days of this decision. The amended Agreement shall be submitted to the Commission's Energy Division through the filing of a Tier 2 Advice Letter.
16 Imperial Merchant Services, Inc. v. Hunt (2009) 47 Cal. 4th 381, 387-388.
17 Stats. 2001, Ch. 837, § 1.
18 Cerritos' Application, Exh. F at 2.
19 Cerritos' Application, Exh. G at 2.
20 Cerritos' Application, Exh. G at 4.
21 Cerritos' Application, Exh. A at 2.
22 SCE's Opening Comments, Exh. C.
23 SCE's Opening Comments, Exh. D at 2.
24 The legislative history of AB 1169 may be found at http://www.leginfo.ca.gov/pub/03-04/bill/asm/ab_1151-1200/ab_1169_bill_20041130_history.html. This bill's history also reveals that AB 1169 was subsequently amended to delete the proposed modifications to § 366.1.
25 D.05-01-009, Appendix A, AB 80 Agreement, ¶ 4.a.
26 Scoping Memo and Ruling of Assigned Commissioner and Administrative Law Judge, September 2, 2009, at 3.
