6. Responses to Comments on General Rules

Parties were provided an opportunity to file comments and replies on the proposed General Rules and Industry Rules during the spring and summer of 2001. The following sections summarize the major issues that were raised in the comments and provide the Commission's responses. In Section 6.0, we address comments on the General Rules. In Sections 7.0 and 8.0, we address comments on the Energy and Water Industry Rules. In both cases, the responses are limited to portions of the rules that have not previously been adopted by the Commission.

6.1 Introduction

The General Rules have been recodified. We started with a comprehensive proposal for GO 96-B when the first draft decision was distributed on February 14, 2001. Subsequently, we adopted portions of the draft in the First, Second, and Third Interim Decisions.

The comprehensive General Rules now set forth in Appendix A contain both the provisions we have previously adopted and provisions that we adopt today (indicated in shaded text). In many cases, these latter provisions have been modified in response to comments and intervening changes in circumstances. For provisions adopted in the interim decisions, we do not repeat our analysis or further respond to comments.

6.2 "Overview of the General Order" (General Rules 1.1 to 1.5)

The rules in this section explain the overall purpose and structure of the General Rules and Industry Rules. Specific rules include "Structure; Purpose; Applicability" (General Rule 1.1), "Utilities Operating in Different Utility Industries" (General Rule 1.2), "Construction; Waiver or Variance" (General Rule 1.3), "Amendments" (General Rule 1.4), and "Computation of Time" (General Rule 1.5). The last provision, General Rule 1.5, was previously adopted in the Third Interim Decision.

The only General Rule receiving comment was General Rule 1.3, "Construction; Waiver or Variance." One party commented that existing Commission practice does not allow the Industry Division Director to shorten a time period or waive the procedural requirement of a rule. To do so here, the comment indicated, will create regulatory uncertainty.

We believe that flexibility in appropriate circumstances is a desirable component of regulation. The Industry Division Director's ability to shorten the protest and reply period, for "good cause" shown, provides that flexibility. In the revised GO, however, we have eliminated the Director's ability to waive or vary a "procedural requirement" because of the vagueness of that term.

Although it did not receive comment, we have also modified General Rule 1.4 to clarify the procedure for Industry Divisions to propose Industry Rule amendments to the Commission. These amendments are the principal means by which we intend to ensure that GO 96-B keeps pace with changes to our regulatory programs.

6.3 "Code of Ethics" (General Rule 2)

General Rule 2, the only rule in this section, was adopted in the Third Interim Decision.

6.4 "Definitions" (General Rules 3.1 to 3.16)

In the First, Second, and Third Interim Decisions, we adopted several definitions for terms commonly used in the General Rules and Industry Rules including definitions for "Advice Letter" (General Rule 3.1), "Day; Business Day" (General Rule 3.3), "Industry Division" (General Rule 3.8), "Information-only Filing" (General Rule 3.9), "Protest" (General Rule 3.11), "Response" (portions of General Rule 3.13), and "Utility" (General Rule 3.16).

In this decision, we approve rules providing definitions for other terms used in the General Rules and Industry Rules. These definitions include "Daily Calendar; Date of Filing" (General Rule 3.2), "Deviation" (General Rule 3.4), "Disposition" (General Rule 3.5), "Effective Pending Disposition" (General Rule 3.6), "Formal; Informal" (General Rule 3.7), "Person" (General Rule 3.10), "Reply" (General Rule 3.12), "Response" (portions of General Rule 3.13), "Service" (General Rules 3.14), and "Tariffs" (General Rule 3.15).

Comments were received on only two of these definitions. Concerning General Rule 3.13, "Response," parties indicated that the filing of responses should be discouraged and should not delay the consideration of an advice letter.

The original version of the rule has already been modified with the addition of a second sentence to the definition in the Third Interim Decision. We believe the opportunity of filing a response provides third parties with a useful means of communicating with the Commission without engaging in litigation with the utility submitting the advice letter.

Other comments were directed to "Tariffs," General Rule 3.15, and suggested that the use of "publish" in the definition was unclear ('Tariffs' refer collectively to the sheets that a utility must file, maintain, and publish . . . ."). We have not changed the rule. These concerns have been addressed in the Appendix, Section 1, to the First Interim Decision where a detailed explanation of the publishing requirement is set forth.

In the First, Second, and Third Interim Decisions, we adopted several provisions concerning "Customer Notices" (General Rule 4.2), "Service Lists" (General Rule 4.3) and "Service by the Internet" (General Rule 4.4).

A version of General Rule 4.2 was adopted in the First Interim Decision for the Telecommunications Industry. We now extend its application to all utilities. General Rule 4.2 is quite narrow:

Unless no notice or a shorter notice period is authorized by statute or Industry Rule or other Commission order, a utility shall give affected customers at least 30 days notice before the effective date of an advice letter requesting higher rates or charges, or more restrictive terms or conditions, than those currently in effect. . . .

By allowing the Industry Rules to provide a shorter notice period or no notice, the General Rule accommodates distinctions between services and industries. We adopt General Rule 4.2 as proposed. We decline to generally authorize newspaper notice as it rarely if ever results in actual notice and should be used only in restrictive circumstances, which we address in the Industry Rules.

Additionally, we now adopt rules expressing our general intent to provide public and customer access to filings related to advice letters ("Commission Policies" (General Rule 4.1)). We also specify the format and procedures for filing documents pursuant to the General Rules and Industry Rules ("Filing Format" (General Rule 4.5)).

Concerning General Rule 4.1, "Commission Policies," several comments suggested that advice letter and information-only filings should be published in the Daily Calendar within one day of filing. We agree with the suggestion that these filings should be promptly noticed, but we believe our contemporaneous efforts to effectuate electronic service will result in prompt notice to interested persons. Consequently, we have not modified the rule.

Several comments suggested that General Rule 4.5, "Filing Format," be amended to allow the possibility of electronic filing of advice letters. In the Third Interim Decision, we indicated, in what is now General Rule 7.1, that "[a]ny provision the Commission may make, now or in the future, for electronic notice of, and access to, the Commission's public records shall apply to such documents." We agree that electronic filing of advice letters should proceed when an Industry Division determines it has the capacity to receive and process advice letters in this fashion. General Rule 4.5 has been amended accordingly. Also, text concerning deadlines falling on days other than business days has been added to General Rule 3.3; and the reference to our Rules of Practice and Procedure has been updated.

The rules in this section explain the use, filing, and service of advice letters. We have previously adopted requirements concerning "Cover Sheet" (General Rule 5.4) and advice letter "Form and Content" (General Rule 5.5).

We now adopt other rules to complete this section. These rules include "Matters Appropriate to Advice Letters" (General Rule 5.1), "Matters Appropriate to Formal Proceedings" (General Rule 5.2), and "Withdrawal; Rejection Without Prejudice" (General Rule 5.3).

In the comments to this series of General Rules, some parties suggested that the proposed language in the rules narrows the purposes for which advice letters can be used, perhaps denying their use for rate increases or new services. General Rule 5.1, "Matters Appropriate to Advice Letters," describes the common purposes for which an advice letter may be used. So long as the utility's action is otherwise authorized by statute or Commission order, the utility may use the advice letter procedure. See Appendix, Section 1, of Third Interim Decision.

General Rule 5.2, "Matters Appropriate to Formal Proceedings," has been changed to track the language of Pub. Util. Code § 454(a).

With reference to General Rule 5.3, "Withdrawal; Rejection Without Prejudice," several comments argued that advice letters are withdrawn for a variety of purposes and that a utility should not be required to later submit a withdrawn advice letter as a formal application. We did not intend to require the resubmittal by application of withdrawn advice letters in all cases, and the text of this rule has been modified accordingly. However, when a utility has withdrawn an advice letter based on an Industry Division's notification that the subject matter of an advice letter must be addressed in a formal proceeding, the utility either must modify its advice letter to address the Industry Division's concern or make its request by application.

General Rule 5.5, "Form and Content," has been modified to authorize an Industry Division to modify the contents of an advice letter as appropriate for that industry and to promulgate sample cover sheet formats. (General Rules 5.4 and 5.5 have been renumbered as explained in Section 9 of this Decision.)

These rules explain how information-only filings (required utility submissions unrelated to a pending request for Commission approval, authorization, or relief) will be filed with the Commission (Filing, Access, Service" (General Rule 6.1)) and processed by staff (Review" (General Rule 6.2)). No comments were received on these rules.

In our Third Interim Opinion, we adopted rules allowing for advice letters to become effective if they have not been protested or suspended by the Industry Division during the 30-day initial review period. Specifically, we adopted the following rules: "Filing Advice Letters and Related Documents" (General Rule 7.1; with the exception of electronic filing provisions which we adopt today), Serving Advice Letters and Related Documents" (General Rule 7.2), "Filing of Protest" (General Rule 7.4.1), "Grounds for Protest" (General Rule 7.4.2), "Replies" (General Rule 7.4.3), "Late-Filed Protest or Response" (General Rule 7.4.4), "Additional Information; Supplements" (General Rule 7.5.1), "Initial Review Period; Suspension; Status Report" (General Rule 7.5.2), "Industry Division Disposition of Advice Letters" (General Rule 7.6.1), "Disposition by Resolution" (General Rule 7.6.2), "Review of Industry Division Disposition" (General Rule 7.7.1), "Application for Rehearing of Resolution" (General Rule 7.7.2), and "Petition for Modification; Request for Extension" (General Rule 7.8).

The rules we approve today all pertain to the effective date of advice letters. These rules provide for a different effective date based on statute or Commission order, the utility's request, or the date set by the Commission when the advice letter is approved by resolution. Under these rules, some advice letters may be effective pending disposition by the reviewing Industry Division.

General Rule 7.3.1, "Effective Date Provided by Statute or Commission Order Other Than This General Order," indicates that the effective date of an advice letter can be set by statute or a Commission order other than this GO 96-B. One comment indicated that this rule creates confusion about the effective date of advice letters in the event there are conflicting requirements set forth in other Commission decisions. The rule does not create or resolve the type of conflicting requirements suggested by the comment. The rule only indicates that statutory requirements, Industry Rules, and specific Commission orders may provide effective dates besides those contemplated by the GO.

General Rule 7.3.2, "Later Effective Date Requested by Utility," received no comment. The rule provides that a utility may request that an advice letter become effective on a date later than the one otherwise provided by the GO.

General Rule 7.3.3, "Effective Pending Disposition," provides immediate effectiveness for advice letters properly submitted as Tier 1 filings.

General Rule 7.3.4, "Effective Date of Advice Letter Submitted for Industry Division Disposition," provides that when a utility submits an advice letter for Industry Division disposition, the advice letter becomes effective in 30 days, unless it has been protested or is suspended by an Industry Division. If the advice letter has been protested or suspended, the advice letter becomes effective upon Industry Division approval or upon Commission adoption of an approving resolution. Another provision, General Rule 7.5.2 limits Industry Division consideration of an advice letter to 120 days, beyond the initial review period, by which time the division must approve or disapprove the advice letter or prepare a resolution for the Commission's consideration.

General Rule 7.3.5, "Effective Date of Advice Letter Submitted for Disposition by Resolution," indicates that an advice letter approved by Commission resolution becomes effective upon Commission adoption of the resolution, unless the reviewing Industry Division otherwise properly approves the advice letter. Comments to this General Rule have become moot in light of the effective date rules adopted in our Third Interim Opinion.

One of the main features of today's decision is to allow certain types of advice letters to become effective upon filing, pending Industry Division disposition.21 General Rule 7.5.3, "Advice Letters Effective Pending Disposition," gives more definition to this process by indicating when such advice letters can be amended and when implementation must stop based on Industry Division rejection of the advice letter.

One comment suggests a new provision providing for a stay pending resolution upon a showing of irreparable consumer harm, hazard to public safety, or a risk to system or network reliability. Other comments oppose this recommendation. On a separate issue, several comments oppose having to submit a separate advice letter outlining a remedial plan when correcting actions already undertaken under an earlier advice letter effective pending disposition.

We have not modified the rule. We believe the Industry Divisions have sufficient authority to suspend an advice letter in the case of exigent circumstances. Creating a remedial plan set forth in a separate advice letter is not required in all circumstances but is an appropriate planning document when many or complex corrective actions must be undertaken.

The set of rules addresses the content, format, and publication of tariffs. In our First Interim Opinion, we adopted several of these rules including "Publishing Tariffs" (General Rule 8.1.1), "Internet Publication" (General Rule 8.1.2), "Other Publication" (General Rule 8.1.3), "Consistency With Tariffs" (General Rule 8.2.1), and "Service Options and Alternatives" (General Rule 8.2.2).

Some comments on compiling and publishing tariffs (General Rule 8.1.1) are now moot since most have been addressed in the First Interim Opinion. One comment raised the issue of the cost of maps requested by a ratepayer or member of the public. We believe this issue is adequately addressed in Section 8.5.4 regarding the description of service areas.

In this decision, we adopt the remaining rules in Section 8.

General Rule 8.2.3, "Emergency Service; Service to Government Agencies," authorizes telecommunications utilities to deviate from existing tariffs, so as to provide free or reduced cost service in times of war or natural disasters. The rule also allows utilities other than telecommunications firms to provide free or reduced cost service to government agencies at any time. Although not raised by the comments, we have added formally recognized Indian tribes to the list of government agencies eligible for free or reduced-cost services.

General Rule 8.3, "Notice to Correct Tariffs," authorizes an Industry Division to issue a notice to a utility directing it to correct any tariff that violates a statute or Commission order. Several comments argued that the rule is an impermissible delegation of authority to staff. Another comment disagreed with this analysis and supported the rule. A third comment suggested that we provide an impartial appeal in the event of a dispute with staff. We believe the proposed rule presents no impermissible delegation of authority. If the utility disagrees with the notice, the Commission itself must determine whether a tariff is unlawful and, if so, approve any refund or other remedy. Except for minor changes to clarify the meaning, we have not changed the proposed rule except to allow substitute sheets.

General Rule 8.4, "Tariff Format and Sheet Numbering," sets forth specific requirements for preparing and numbering tariff sheets. Most of these requirements are in existing GO 96-A.

Many comments on the rule pointed to the burden and cost of reformatting existing tariff sheets and suggested that these requirements be imposed prospectively. We believe that the tariff sheet numbering system in the proposed rule (which uses Federal Communications Commission format) will afford many benefits in more easily used tariffs. The proposed rule also allows the Industry Divisions to establish compliance schedules for utilities whose tariffs do not conform to the new requirements. This provision will allow utilities a reasonable period to bring their tariff sheets into compliance.

One comment suggested additional language to the content of the footer of tariff sheets, specifically allowing the utility to enter the effective date and providing the resolution number for a Tier 3 resolution under the Industry Rules. We reject this suggestion because it is inconsistent with existing practices of the Industry Divisions.

One comment suggested that the Industry Divisions be authorized to allow a font size smaller than 10 point if appropriate for the information presented. We adhere to the minimum 10 point requirement since we believe this size helps ensure the readability of tariffs. Similarly, the comment suggested that handwritten text or marks should be allowed in some circumstances. With the availability of sophisticated computer-based graphics programs, we do not believe handwritten text or marks are necessary or desirable.

In comments on the Energy Industry Rules, one entity recommended specific authorization for energy companies, in satisfaction of this rule, to file tariffs in a Federal Energy Regulatory Commission (FERC) format. Rather than modify just the Energy Industry Rules to incorporate this suggestion, a more general change has been made to the last sentence of General Rule 8.4 allowing the Industry Divisions to allow such variances. We do not believe the General or Industry Rules need be burdened with the detailed differences in federal agency and Commission tariff format and numbering requirements.

General Rule 8.5.1, "Title Page," specifies the content of the tariff title page. One comment urged that the title page should identify the utility by the name shown on its Certificate of Public Convenience and Necessity. While such identification would be legally correct, the CPCN name may be so different from the names under which the utility commonly does business as to be misleading to customers and ratepayers. We believe the most commonly used business name also should be used, and we have changed the rule to require both.

General Rule 8.5.2, "Table of Contents," describes the required table of contents and check sheet at the beginning of each volume of a utility's tariffs. Some comments said "volume" was unclear, but the concept was used in
GO 96-A and refers to a group of tariff sheets bound or attached together for the convenience of the user. Other comments were that the check sheet would duplicate the table of contents and would be unnecessary with automated tariff update systems. We have modified the rule to require up-to-date check sheets only for tariffs that are not continuously and reliably updated by an automated system.

General Rule 8.5.3, "Preliminary Statement and Explanation of Symbols," describes the preliminary statement used in tariffs and the symbols used to indicate types of changes in tariffs. One comment said that, if memorandum accounts are not authorized, they should not be listed in the preliminary statement; accordingly, a slight wording change has been made. Another comment urged that utilities be allowed more flexibility in determining where technical terms should be defined. We have decided to delete the definition requirement here because General Rule 8.5.7(1) requires that utilities define the terms used in their tariffs. Otherwise, the text, drawn from GO 96-A and reflecting current practice, received no comment.

General Rule 8.5.4, "Service Area," requires the utility to provide a verbal description and map of its service area, unless the service area is state-wide. Several comments objected to the requirement of making maps and legal descriptions of the service area available on the utility's web site.

We retain the requirements because reasonably detailed service area information is important for informing existing and potential customers and Industry Division staff about the geographic extent of the utility's operations. The rule does not require legal or GIS descriptions if maps or verbal descriptions are sufficient for identifying service area boundaries (however, the Water Industry Rules do impose such requirements; see Section 8.8). As specified in our First Interim Opinion, only utilities with gross intrastate revenues in excess of $10 million are required to maintain this information on web sites. We believe that larger utilities will be able to adapt Internet-based mapping software, which is already being used for many business purposes, to meet this requirement. We have, however, modified the rule to allow adequate maps to substitute for a verbal description. We also provide for a transitional period.

Another comment was that the listing of zip codes to describe a utility's service area does not make sense in the case of oil pipeline companies not typically serving residents. The rule uses zip codes only as an example of a "reasonable means" to describe a service area. We have not changed this portion of the rule.

General Rule 8.5.5, "Rate Schedules," requiring utilities to set forth a schedule of their rates in tariffs, received no comment. The rule has not been changed.

General Rule 8.5.6, "List of Contracts and Other Deviations," requires a utility to compile and publish in its tariff a list of all contracts and other deviations under which it provides service or rates different from those described in its tariffs. A comment questioned how this requirement relates to the tier processing and review procedure described in some of the Industry Rules. The Industry Rules provide more specific requirements for those entities falling under those rules.

General Rule 8.5.7, "Tariff Rules," requires a utility to state those rules regarding its rates, charges, and services that are not otherwise set forth in the tariff rate schedule. These tariff rules, in fact, constitute many of the most important and broadly applicable provisions under which a utility serves its customers, e.g., applying for service or establishing credit, methods for serving notices, treatment of disputed bills, and discontinuance and restoration of service. No specific comment on General Rule 8.5.7 was received, but one comment broadly urged us to require utilities to improve the clarity of their tariffs. While some tariffs may require highly technical language, we believe that the tariff rules specified in General Rule 8.5.7 must be written in clear and readily understandable English. We have revised General Rule 8.5.7 to include this requirement.

General Rule 8.5.8, "Sample Forms," requires the utility to include in its tariffs those commonly used forms of concern to customers in connection with the utility's service. One comment said that the rule is unnecessary since most utility-customer transactions occur on the phone. We believe, however, that sample forms reproduced in the tariff provide customers with more information about the details of their transactions with the utility-even if they ultimately use the telephone to conduct the transaction. Also, to the extent a signature is required on a form, it is convenient for the customer to be able to print out forms from the utility's website.

Section 9 and its subdivisions have been substantially amended since the issuance of the 2001 Draft Decision. Since then, the Commission has adopted GO 167, Enforcement of Maintenance and Operation Standards for Electric Generating Facilities (see D.04-05-018, adopted May 6, 2004). Sections 10.2 and 15.4 of GO 167 provide the most recent comprehensive statement of the Commission's confidentiality policies, adopted pursuant to Pub. Util. Code § 583 for information provided to the Commission. The reasons for the GO's provisions are discussed at pages 38-40 of D.04-05-018. As explained in Section 9 of this decision, the confidentiality provisions have been amended to provide a procedural rule with reliance on Section 583, General Order 66-C (or its successor), and other decisions and statutes for substantive law.

Since GO 167, the Commission has also adopted an Interim Opinion Implementing Senate Bill No. 1488, Relating to Confidentiality of Electric Procurement Data Submitted to the Commission (see D.06-06-066, adopted June 29, 2006, in Rulemaking (R.) 05-06-040). This interim decision prescribes confidentiality treatment for electric procurement, resource adequacy, and Renewables Portfolio Standard data. As with other superseding statutes or Commission decisions, specific provisions of GO 167 may supersede the confidentiality provisions of GO 96-B in the context of operating and maintaining electric generating facilities and provisions of D.06-06-066 may supersede the confidentiality provisions of GO 96-B in the context of electric procurement and related data.

21 The qualifying types of advice letters are described in the Industry Rules and General Rule 8.2.3, "Emergency Service; Service to Government Agencies."

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