C. Commission Jurisdiction

Our enforcement jurisdiction under section 761.3 has been the most controversial aspect of this proceeding. The breadth of the legislation extends our authority to many electric generators who have consistently maintained that they are not otherwise subject to our regulation. Most of the jurisdictional questions have been addressed in our companion decision issued today on Thermal Logbook Standards.⁷ Rather than repeat our commentary and conclusions on jurisdictional questions, we incorporate by reference our more detailed discussion set forth in that decision.

One jurisdictional question does require further discussion here, that is, our authority to enforce these standards on hydroelectric Generating Assets owned by investor-owned utilities.

Two California-based utilities, Southern California Edison (SCE) and Pacific Gas & Electric Co (PG&E), own hydroelectric facilities. SCE owns thirty-six hydroelectric generating plants consisting of seventy-nine generating units. SCE indicates that most of these operate under FERC licenses. PG&E reports owning sixty-six hydroelectric powerhouses that are licensed by FERC and three non-FERC facilities.

Since they are owned by SCE and PG&E, and we have broad authority over traditional utilities (see, e.g., Pub. Util. Code § 451, 701), we have undisputed authority to impose these standards on non-FERC hydroelectric facilities owned by these utilities and located within California. Under section 761.3, we have jurisdiction over any non-FERC hydroelectric facilities owned by other nongovernmental entities. The more difficult question is whether we have the authority to impose the standards on FERC-licensed hydroelectric facilities.

With some exceptions, FERC has authority over the construction, operation, and maintenance of hydroelectric generation facilities. These facilities on navigable waterways are licensed by FERC under section 4 of the Federal Water Power Act.⁸ The licenses are issued on the condition that specific maintenance and operation requirements be performed,⁹ and FERC has issued rules on maintenance and operation requirements.¹⁰

These licenses are also issued on the further condition, set forth in section 19 of the Federal Water Power Act, that the licensee "shall abide by such reasonable regulation of the services to be rendered to customers or consumers of power . . . as may from time to time be prescribed by any duly constituted agency of the State in which the service is rendered . . . ."¹¹ This section is part of an overall federal statutory scheme that embodies substantial deference to state authority. FERC, formerly the Federal Power Commission, regulates hydroelectric services and sales to consumers only if a state commission has not been established. Under section 20,¹² the federal agency regulates the interstate movement of hydroelectric power only when the states directly concerned fail to agree through a properly constituted joint authority (such as an interstate compact commission) on the services to be rendered or the rates to be charged. As the U.S. Court of Appeals has indicated, under the Federal Water Power Act, regulation of hydroelectric power "is to be encompassed through state authority and not through the power of the Federal government unless the state has failed to set up a regulatory commission. Only in the event of such failure does the Federal Power Commission possess jurisdiction to regulate rates and services."¹³

This statutory framework authorizes the Standards Committee to apply, as it has done, its General Duty and Maintenance Standards to hydroelectric facilities within California, whether or not they are licensed by FERC. Since these standards are designed to ensure electric system reliability and adequacy, they affect the electrical service to be provided to California consumers. Given this purpose, California's strong local interest outweighs any minor or indirect interference with interstate commerce.¹⁴

While section 19 also provides us with authority to enforce these General Duty and Maintenance Standards, we are aware that FERC has an ongoing and beneficial maintenance and safety program for federally licensed hydroelectric facilities. Since the State of California has not previously regulated the operations and maintenance at California-based hydroelectric facilities, we do not now seek to displace FERC's activities at these facilities, as is contemplated by section 19 of the Federal Water Power Act. Rather, we invite a cooperative relationship with FERC, based on intergovernmental comity, allowing the joint expertise of both commissions to be utilized in securing the safe, efficient, and reliable operation of these facilities. For the moment, we have exempted FERC-licensed hydroelectric Generating Assets from sections 7.0, 9.0, 10.3, 10.4, and 15.1 of the GO. Hydroelectric Generating Assets not licensed by FERC, however, are subject to all applicable provisions of the GO.

Based on the foregoing analysis, as well as the analysis set forth in our decision on Thermal Logbook Standards, we use the term "Generating Asset" in this decision and the accompanying GO to refer to those generating facilities over which we assert our jurisdiction pursuant to Pub. Util. Code § 761.3. In addition to the FERC-licensed hydroelectric facilities discussed above, we have exempted generating facilities smaller than one megawatt from the requirements of the GO (except for cooperation and information disclosure) because we believe these plants have, at present, a relatively minor impact on the reliability of the grid, which includes tens of thousands of megawatts of generation. However, changes in regulation, technology, or the number of small plants could make the grid (or certain parts of the grid) more sensitive to the reliable operation of even these small facilities. The Commission will adopt regulations regarding the maintenance and operation of these plants if changed circumstances so require. So that the Commission can monitor the need for additional regulation, the GO still requires the owners and operators of these small facilities to cooperate with the Commission and its staff in investigations, inspections, or audits if so required.

Also, we have exempted facilities where the total nameplate rating generating capacity at that plant or location is less than 50 megawatts (MW) from certain requirements of the GO.

Several of the comments suggest a procedure for generators to learn from the Commission whether the GO covers them. Our jurisdictional discussion, both in this decision and the Thermal Logbook decision, identifies the major categories of Generating Assets that are subject to the GO. That discussion, section 761.3, and the GO itself all adequately explain jurisdiction and the facilities that are covered. No party proposes the specifics of such an advisory function, and we are not persuaded to assume the additional administrative burden of developing and implementing a procedure for unit- or case-specific determinations.