COM/SK1/ham DRAFT Agenda ID #3411

Adjudicatory

4/22/04

Decision PROPOSED ORDER OF COMMISSIONER KENNEDY DIFFERENT
FROM PRESIDING OFFICER'S DECISION
(Mailed 4/5/04)

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

OPINION FINDING VIOLATIONS AND IMPOSING SANCTIONS 2

I. Summary 2

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

VIII. The Role of a Maintenance Priority System in This Investigation 22

IX. High Voltage Signs 25

X. Edison's Defenses 27

A. Nondelegable Duty 27

B. Employees' Violation of GOs 29

C. GO 165 Does not Shield Edison from GO 95 or 128 Violations 30

D. Inspection Intervals 31

E. Subjectivity of CPSD Inspectors 32

F. Former CPSD Staff's Interpretation of the GOs 33

G. Achievable Standards 34

XI. GO Violations 35

A. The 37 Violations Involving Accidents 35

C. Violations of GO 165 35

1. Identification of Unsafe Conditions 35

2. Period Between Inspections 37

3. Scheduling and Performing Corrective Action 37

B. Alleged Rule 1 Violations 38

1. Lancaster 39

2. Newbury Park 39

CI. Sanctions 41

A. Summary 41

B. CPSD's Recommendations 42

C. Edison's Response 42

D. Discussion 42

1. Severity of the Offense 43

2. The Utility's Actions to Prevent, Detect, and Disclose and Remedy a Violation 44

3. Need for Deterrence 45

4. Totality of the Circumstances in Furtherance of the Public Interest 45

a) Mitigating Facts: 46

b) Exacerbating Facts: 46

5. The Role of Precedent 46

6. Constitutional Limitations on Excessive Fines 47

7. Penalty 47

CII. Appeal of Presiding Officer's Decision 47

A. Summary of the Appeals 48

1. Edison 48

2. CPSD 49

3. PG&E and SDG&E 50

4. CCTA 51

B. Discussion 51

1. Jurisdiction 51

2. The Term "Violation" 51

3. New Construction Standards 53

4. Edison's Maintenance Priority System 54

5. Litigation Risk 56

6. GO 165 Inspection Intervals 57

7. Penalties 58

8. Due Process 60

9. Rulemaking 61

XIII. Assignment of Proceeding 61

Findings of Fact 62

Conclusions of Law 63

ORDER 66

A. Accidents for Which Edison Alleges No Nonconformance 1

B. Accidents for Which Edison Alleges Nonconformance But No Causation 14

C. Accidents for Which Edison Admits a Violation, Causation, and a Failure to Detect/Remedy the Violation 32

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 $676,000 primarily for 30 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 violations. In each of these cases, we conclude that Edison either knew or should have known of the violation and failed to cure it in a timely fashion. 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 in a timely fashion and with regard to the potential harm associated with failure to cure.

Thus, for each GO violation involving serious potential harm that Edison failed to cure in a timely fashion we have assessed the maximum penalty of $20,000, as provided by Pub. Util. Code § 2107. In assessing whether a particular violation involved potential serious harm, we have looked in most cases to harm that actually occurred. 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

II. The Order Instituting Investigation (OII)

The OII alleges that Edison violated three Commission GOs that specify the requirements for the construction, operation, and maintenance of overhead and underground utility systems, including (1) GO 95 (rules for overhead electric line construction); (2) GO 128 (rules for construction of underground electric supply and communications systems); and (3) GO 165 (inspection cycles for electric distribution facilities.)

Based on routine CPSD inspections of Edison's facilities, the OII alleges 4,044 violations of GO 95 requirements on electric poles in Edison's service territory and 677 violations of GO 128 requirements in Edison-owned underground and pad-mounted structures. Additionally, the OII alleges 37 accidents involving Edison's violations of these three GOs and two violations of Rule 1 for providing misleading information to the Commission.

CPSD has the burden of proving that Edison violated the GOs and Rule 1. See In re Qwest Communications Corporation (Qwest), Decision (D.)02-10-059 at 4; In Re Communication TeleSystems International (CTS), D.97-05-089, 72 CPUC2d 621, 642, Conclusion of Law 1. CPSD must prove its allegations by a preponderance of evidence. See Qwest at 4; CTS at 72 CPUC2d at 642, Conclusion of Law 2.