IX Ex Parte Communications

This proceeding is subject to Rule 7(d) of the Commission's Rules of Practice and Procedure, which specifies standards for engaging in ex parte communications and the reporting of such communications in quasi-legislative proceedings.

ORDER

Therefore, IT IS ORDERED that:

1. A rulemaking is instituted on the Commission's own motion to examine the Commission's process and practice for determining the need for new transmission facilities that require a CPCN as defined in General Order 131-D.

2. Pacific Gas and Electric Company (PG&E), Southern California Edison Company (Edison), and San Diego Gas & Electric Company (SDG&E) are Respondents to this proceeding.

3. The Executive Director shall cause this Order Instituting Rulemaking (OIR) to be mailed to Respondents, the California Energy Commission, the California Power Authority, the California Independent System Operator, and to the service lists for the following Commission proceedings: I.00-11-001, R.01-10-024 and I.83-04-03.

4. Within 20 days from the date of mailing of this order, any person or representative of an entity interested in monitoring or participating in this rulemaking should send a letter to the Commission's Process Office, 505 Van Ness Avenue, San Francisco, California 94102, or ALJ_Process@cpuc.ca.gov asking that his or her name be placed on the service list.

5. The category of this rulemaking is preliminarily determined to be "quasi-legislative" as that term is defined in Rule 5 (d) of the Commission's Rules of Practice and Procedure.

6. Any person who objects to the preliminary categorization of this rulemaking or to its preliminary hearing designation shall include such objection in its comments filed pursuant to this order.

7. The ISO will file and serve its proposed standard for determining whether a transmission project is required to maintain or enhance system reliability and comment on the proposed revision to G.O. 131-D within 25 days from the date of mailing.

8. Parties shall file and serve comments within 45 days from the date of mailing on the ISO's proposed standard for determining whether a transmission project is required to maintain or enhance reliability and the proposed revision to G.O. 131-D (or alternative approach). Parties shall file and serve responses to comments 25 days thereafter. Once comments are received, the Assigned Commissioner will provide guidance with regard to the next steps.

9. The scope and schedule set forth in this order may be modified by the Assigned Commissioner or Administrative Law Judge, as necessary.

This order is effective today.

Dated January 22, 2004, at San Francisco, California.

I reserve the right to file an explanation of my abstention.

/s/ LORETTA M. LYNCH
Commissioner

I will file a dissent.

/s/ CARL WOOD
Commissioner

APPENDIX A

ELECTRONIC SERVICE PROTOCOLS

(Page 1)

Party Status in Commission Proceedings

These electronic service protocols are applicable to all "appearances, interested parties," And other members of the service list. In accordance with Commission practice, by entering an appearance at a prehearing conference or by other appropriate means, an interested party or protestant gains "party" status. A party to a Commission proceeding has certain rights that non-parties (those in "state service" and "information only" service categories) do not have. For example, a party has the right to participate in evidentiary hearings, file comments on a proposed decision, and appeal a final decision. A party also has the ability to consent to waive or reduce a comment period, and to challenge the assignment of an Administrative Law Judge (ALJ). Non-parties do not have these rights, even though they are included on the service list for the proceeding and receive copies of some or all documents.

Service of Documents by Electronic Mail

For the purposes of this proceeding, all appearances shall serve documents by electronic mail, and in turn, shall accept service by electronic mail.

Usual Commission practice requires appearances to serve documents not only on all other appearances but also on all non-parties in the state service category of the service list. For the purposes of this proceeding, appearances shall serve the information only category electronically as well since electronic service minimizes the financial burden that broader service might otherwise entail.

APPENDIX A

ELECTRONIC SERVICE PROTOCOLS

(Page 2)

Filing of Documents

These electronic service protocols govern service of documents only, and do not change the rules regarding the tendering of documents for filing. Documents for filing must be tendered in paper form, as described in Rule 2, et seq., of the Commission's Rules of Practice and Procedure. Moreover, all filings shall be served in hard copy (as well as e-mail) on the assigned Commissioner's office and the assigned ALJ. All e-mails shall be sent by 5:00 pm on the due date.

Electronic Service Standards

As an aid to review of documents served electronically, appearances should follow these procedures:


· Merge into a single electronic file the entire document to be served (e.g. title page, table of contents, text, attachments, service list).


· Attach the document file to an electronic note.


· In the subject line of the note, identify the proceeding number; the party sending the document; and the abbreviated title of the document.


· Within the body of the note, identify the word processing program used to create the document. (Commission experience indicates that most recipients can open readily documents sent in Microsoft Word or PDF formats).

If the electronic mail is returned to the sender, or the recipient informs the sender of an inability to open the document, the sender shall immediately arrange for alternative service (paper mail shall be the default, unless another means is mutually agreed upon).

APPENDIX A

ELECTRONIC SERVICE PROTOCOLS

(Page 3)

Obtaining Up-to-Date Electronic Mail Addresses

The current service lists for active proceedings are available on the Commission's web page, www.cpuc.ca.gov. To obtain an up-to-date service list of e-mail addresses:


· Choose "Proceedings" then "Service Lists."


· Scroll through the "Index of Service Lists" to the number for this proceeding.


· To view and copy the electronic addresses for a service list, download the comma-delimited file, and copy the column containing the electronic addresses.

The Commission's Process Office periodically updates service lists to correct errors or to make changes at the request of parties and non-parties on the list. Appearances should copy the current service list from the web page (or obtain paper copy from the Process Office) before serving a document.

Pagination Discrepancies in Documents Served Electronically

Differences among word-processing software can cause pagination differences between documents served electronically and print outs of the original. (If documents are served electronically in PDF format, these differences do not occur.) For the purposes of reference and/or citation in cross-examination and briefing, all parties should use the pagination found in the original document.

(END OF APPENDIX A)

Transmission OIR Dissent of Carl Wood (Item 29, 1/22/04)

In numerous places, the order talks about "inefficiency and redundancy" in the current transmission review process without identifying the nature of the inefficiency or pointing to the redundancy. Without either proving the existence of duplication, or addressing the pluses or minuses of any duplication that might actually exist, the order presumes a problem and then declares the solution - the order declares that the Commission should defer to the ISO for some or all of the determination of the need for a particular transmission project. I would have supported an order that presented the Staff's findings and then offered the Staff proposal for comments. This order, however, skips to the conclusion and adopts the Staff's characterization of the "problem" without scrutiny.

The order adopts, without question, the prevailing folklore that there is something wrong about allowing a constitutionally-established economic regulatory agency to question the needs assessment of a non-profit transmission operating company. There is no discussion of the hundreds of millions of dollars at stake, or the tremendous environmental implications of approving unneeded new lines, and the fact that it is this agency, not the ISO, that is responsible to define and protect the public interest.

Is there something wrong about the present relationship between this Commission and the ISO? That would be an interesting issue for the Commission to explore. As written, however, this order does not waiver from its dedication to the principle that there is a problem with the current system and that it must be changed and that the Commission should defer to the ISO in some manner. I can imagine that just as the order cites the Energy Action Plan, the Commission in future decisions will be tempted to cite this order as proof that a problem exists. This type of bootstrap policymaking is not well-informed and can lead to dangerous results. I ask everyone to remember that the conclusions offered in this order are not supported by a record.

My second level of concern is more substantive. I disagree with the statement of the problem and I vigorously disagree with the characterization of the proposed solution.

It has not been established that there is any redundancy in the transmission review process. The ISO and utilities can propose transmission projects and both are obligated to develop such proposals in a responsible and thorough manner. This Commission can approve or reject utility participation in such projects. The ISO might conclude that a new line is needed, but it is our obligation to decide whether that conclusion of need passes legal scrutiny and whether such a need dictates utility ratepayer support for the project. Put simply, this Commission is the regulator, the ISO is the operator. Although there are multiple decisions involved in siting a new line, that fact does not make the decisions necessarily redundant. And a Commission decision denying an unproven transmission project is not a sign of institutional failure.

There is no reason for the analysis underlying our needs assessments to be either inefficient or duplicative. If a utility or the ISO prepares a thorough and credible analysis, there is no need for our staff to duplicate the effort. But analysis is different from oversight and review. Those are necessary parts of public accountability.

Even if the division of labor that comprises the ISO and Commission processes could be characterized as duplicative, it does not necessarily follow that such duplication would be unproductive or inefficient. The law envisions the roles that the ISO and this Commission each fulfill during the siting process. When the Legislature enacted AB 1890, it preserved this agency's transmission siting responsibilities in total, including the determination of project need.

Finally, I strongly disagree that the Commission should defer to the ISO on any aspect of our responsibilities under Section 1001 and its related provisions. I have seen no sufficient justification for further disaggregating the certification process. This, in itself, could create inefficiency, weaken accountability, and sacrifice legal protections. No matter what anyone might think or wish, the ISO is not a governmental agency. Its decisions in matters of this nature are not subject to appeal or court review. A deferral to the ISO could come at the expense of due process and the substantive rights of parties. The law does not allow us to assign the agency's obligations to others. We shouldn't do it, and we shouldn't even claim that we are doing it.

This Commission has no reason to apologize for fulfilling its obligations. The order reads like a confession when, in fact, there is no wrongdoing. I cannot support this order.

January 22, 2004

San Francisco, California

R0401025 Attachment B Electric Transmission CPCN Reform Rulemaking

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