VI. Discussion of Settlements
A. Standard for Approval of a Settlement
Rule 51.1(a)4 provides:
Parties to a Commission proceeding may stipulate to the resolution of any issue of law or fact material to the proceeding, or may settle on a mutually acceptable outcome to the proceeding, with or without resolving material issues. Resolution shall be limited to the issues in that proceeding and shall not extend to substantive issues which may come before the Commission in other or future proceedings.
Rule 51.1(e) has, as a further requirement:
The Commission will not approve stipulations or settlements, whether contested or uncontested, unless the stipulation or settlement is reasonable in light of the whole record, consistent with law, and in the public interest. (Emphasis added.)
In short, we must find the settlement comports with Rule 51.1(e) which requires a settlement to be "reasonable in light of the whole record, consistent with law, and in the public interest." We address below whether the settlements meet these three requirements.
B. Reasonable in Light of the Whole Record
We have reviewed the evidence in the record, considered the scope and thoroughness of the review by all active parties, especially DRA, TURN, and FEA (for SDG&E's interests). In particular, DRA, TURN, and FEA conducted detailed examinations. Having reviewed the prepared testimony of all parties, we find that the proposed settlements are both within the range of reasonable findings if the applications had been fully litigated. Therefore we can find the settlements to be reasonable in light of the whole record. The items contested between PG&E and Fielder are considered separately in this decision: however, absent Fielder's objections, the settlement by PG&E with DRA and TURN is otherwise reasonable in light of the whole record.
C. Consistent With Law
Nothing in either settlement is inconsistent with the law, and the settlement process was consistent with Rules 51 et seq. Therefore we can find the settlements to be consistent with applicable law.
D. In the Public Interest
There was no guarantee that litigation of the issues raised by the parties would have resulted in any adjustment to the decommissioning revenue requirements as significant as proposed in the two settlements which are acceptable to all parties. The settlements saved time and resources, and achieved results within the range of reasonable litigation outcomes. The need for decommissioning funding was not at issue in this proceeding-that was determined when the funds were established in compliance with state and federal requirements. Therefore, since there is an uncontested need for funding future decommissioning costs and the funding in the settlements is consistent with the record, we find the settlements for decommissioning funding to be in the public interest. Similarly, the need for actual decommissioning activities for SONGS Unit 1 and Humboldt Unit 3 were uncontested. The settlements on the reasonableness of actual costs are consistent with the record; therefore we find the settlements for decommissioning funding to be in the public interest.
E. Uncontested Settlement
A further standard is articulated in San Diego Gas & Electric 46 CPUC 2d 538 (1992), and applies to all-party settlements. As a precondition to approving such a settlement, the Commission must be satisfied that:
1. The proposed all-party settlement commands the unanimous sponsorship of all active parties to the proceeding.
2. The sponsoring parties are fairly representative of the affected interests.
3. No settlement term contravenes statutory provisions or prior Commission decisions.
4. Settlement documentation provides the Commission with sufficient information to permit it to discharge its future regulatory obligations with respect to the parties and their interests.
We can answer all four requirements in the affirmative for Edison and SDG&E's ratemaking settlement. Questions 2 through 4 are true for PG&E's contested settlement.
4 The Commission adopted a revised Rule 51, as Rule 12, effective September 13, 2006, which does not materially differ from the substance of the old rule. Parties settled under then-applicable Rule 51, which we cite herein.
