ALJ/JJJ/MOD-POD/tcg DRAFT Agenda ID #3003

Adjudicatory

12/4/03 Item 47

Decision ____________

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Order Instituting Investigation Into Southern California Edison Company's Electric Line Construction, Operation, and Maintenance Practices. Southern California Edison Company, Respondent.

Investigation 01-08-029 (Filed August 23, 2001)

(See Appendix A for Appearances.)

OPINION FINDING VIOLATIONS AND IMPOSING SANCTIONS

TABLE OF CONTENTS

Title Page

OPINION FINDING VIOLATIONS AND IMPOSING SANCTIONS........... 1

I. Summary 2

II. The Order Instituting Investigation 3

III. Underlying Policy Dispute Between the Parties 4

IV. Summary of Parties' Positions 4

A. CPSD 4

B. Edison 5

V. Procedural Background 7

VI. The General Orders 8

A. GO 95 8

B. GO 128 9

C. GO 165 9

VII. Edison is Required to Comply with Commission GOs; the Failure
to do so is a Violation 10

VIII. The Role of a Maintenance Priority System in This Investigation 12

IX. High Voltage Signs 16

X. Edison's Defenses 18

A. Nondelegable Duty 18

B. Employees' Violation of GOs 20

C. GO 165 Does not Shield Edison from GO 95 or 128 Violations 21

D. Inspection Intervals 22

E. Subjectivity of CPSD Inspectors 23

F. Former CPSD Staff's Interpretation of the GOs 24

G. Achievable Standards 24

XI. GO Violations 26

A. The 37 Accidents 26

B. Violations of GO 95 and 128 27

C. Violations of GO 165 27

1. Identification of Unsafe Conditions 27

2. Period Between Inspections 28

3. Scheduling and Performing Corrective Action 28

D. Alleged Rule 1 Violations 29

1. Lancaster 30

2. Newbury Park 31

XII. Sanctions 32

A. Summary 32

B. CPSD's Recommendations 33

TABLE OF CONTENTS

(Continued)

Title Page

C. Edison's Response 34

D. Discussion 34

1. Severity of the Offense 35

2. The Utility's Actions to Prevent, Detect, and Disclose
and Remedy a Violation 36

3. Need for Deterrence 37

4. Totality of the Circumstances in Furtherance of
the Public Interest 37

a) Mitigating Facts: 37

b) Exacerbating Facts: 38

5. The Role of Precedent 38

6. Constitutional Limitations on Excessive Fines 38

7. Penalty 39

XIII. Appeal of Presiding Officer's Decision 39

A. Summary of the Appeals 40

1. Edison 40

2. CPSD 41

3. PG&E and SDG&E 42

4. CCTA 42

B. Discussion 43

1. Jurisdiction 43

2. The Term "Violation" 43

3. New Construction Standards 44

4. Edison's Maintenance Priority System 46

5. Litigation Risk 48

6. GO 165 Inspection Intervals 49

7. Penalties 50

8. Due Process 52

9. Rulemaking 53

XIV. Assignment of Proceeding 54

Findings of Fact ........................................................................................... 54

Conclusions of Law ...................................................................................... 56

ORDER ...................................................................................................... 58

Appendix A

Appendix B

OPINION FINDING VIOLATIONS AND IMPOSING SANCTIONS

I. Summary

In this investigation, the Commission examined Southern California Edison Company (Edison) electric line construction, operation, and maintenance practices during 1998 through 2000. This decision fines Edison a total of $576,000, primarily for 25 violations of the Commission's General Order (GO) 95 and GO 128 specifying the requirements for the construction, operation, and maintenance of overhead and underground utility systems. The decision fines Edison $20,000 for each of these 25 violations that have a nexus with an accident involving death, injury, or property damage. It also fines Edison $1,000 for each of 56 violations of GO 165 for Edison's failure to identify unsafe conditions, and $20,000 for exceeding GO 165's inspection intervals.

This decision does not fine Edison for 4,721 observed violations of the GOs that Edison remedied promptly once the Commission's Consumer Protection and Safety Division (CPSD) brought the violations to Edison's attention. Both Edison and CPSD agree that it is impossible for a utility to keep its distribution system in perfect compliance with the safety GOs, and that at any given time, there will be multiple violations on a utility's system. The penalties we assess are intended to encourage Edison to focus its immediate resources and efforts on finding and curing GO violations that have the most potential for causing death, injury or property damage.

Thus, for GO violations that have a nexus to an accident involving injury or property damage, we have assessed the maximum penalty of $20,000, as provided by Pub. Util. Code § 2107. We also assess $1,000 for each violation concerning Edison's failure to identify safety GO violations in its detailed inspection, and $20,000 for exceeding GO 165's inspection intervals because of the potential for harm. We have not assessed penalties for the remaining GO violations because Edison had a maintenance priority system in effect during the relevant period and promptly remedied the GO violations as required by CPSD; moreover, CPSD did not demonstrate that the cumulative effect of Edison's GO violations compromised the system's safety or put the violations in any context. Had CPSD made such a demonstration, these facts could weigh in favor of imposing penalties for all of the violations, regardless of whether the violations caused injury.