4. Comments on Draft Decision
On May 3, 2001, the draft decision of Assigned Commissioner and Presiding Officer Wood on this matter was filed and served on parties in accordance with Section 311(g)(3) of the Pub. Util. Code and Rule 77.7 of the Rules of Practice and Procedure. Comments were filed on May 14, 2001, and reply comments were filed on May 18, 2001.1 We modify the draft decision as appropriate based on our review of comments and reply comments.
SDG&E states that there may be circumstances in which a municipal or other government agency or authority requests circuit exemption from rotating outage based on public health and safety. SDG&E says, for example, that local police may order that power not be curtailed, or be restored, where thousands of people are gathered, or during a riot or other civil emergency. According to
SDG&E, the utility should be permitted to override whatever status the customer's circuit already has upon order of the local police. SDG&E asks that the Commission explicitly recognize respondent utility's ability to comply with directives from local authorities, such as police or fire, to exempt a circuit.
We generally agree. Respondent utilities should comply with valid orders of responsible police or fire authorities, and other authorities with emergency powers, to exempt a circuit from outage, or order a circuit re-energized, based on public health and safety. To the extent such orders are implemented, however, they must be executed to the extent reasonable and necessary in coordination with, and with the agreement and approval of, the California Independent System Operator (CAISO). The CAISO must be involved as necessary so that such action will not jeopardize a widespread system collapse.
Respondent utility must coordinate as needed with the CAISO since a local emergency official cannot be expected to know and consider the status of the entire statewide electrical system. When properly coordinated and approved with the CAISO as needed, however, respondent utility should comply with valid orders of responsible local emergency officials.
Application of this exception must be further clarified. We do not at this time authorize general exemption of all water agencies, sewer utilities, skilled nursing facilities (SNFs), transit agencies, or several others requesting exemption. We decline to allow respondent utilities to override our decisions, or prejudice future decisions, regarding these public entities by responding to a request for exemption from a local agency or authority (e.g., a request from an official of a local water district, health department, transit agency). On the other hand, we agree with SDG&E to the extent that respondent utilities may implement a valid order from responsible police, fire, or similar authority with emergency powers, for immediate protection of public health and safety when jeopardy or danger is imminent, to the extent properly coordinated with the CAISO, as needed.
While we make this clarification at SDG&E's request, we decline to modify the list of essential customers. SDG&E does not allege that it lacks the authority to respond to a proper order of responsible local authority with emergency powers, and we are not convinced that respondent utilities lack that authority. To prevent any possible confusion, we clarify that respondent utilities may do so when properly coordinated with the CAISO. We are not convinced, however, that this must be explicitly stated in an amendment to the list of essential customers in the Priority System for Rotating Outages.
The CEC recommends that the entire infrastructure used to produce gasoline, diesel, and aviation fuels be exempt from rotating outages. The CEC says that without such exemption the public health and safety is jeopardized, citing D.01-01-056 in support. The EPUC similarly supports exemption of operations within the entire fuel production chain. At a minimum, refineries must be exempt, according to both CEC and EPUC.
We decline to order general exemption of the entire fossil fuel infrastructure, or a limited exemption for refineries. Rather, we expect to address the fossil fuel infrastructure, with particular focus on refineries, in a subsequent order.
Further, CEC recommends essential customer status be granted to any customer (e.g., industrial, agricultural) able to make a compelling showing of economic damage as a result of exposure to rotating outages. That is, CEC urges adoption of an economic standard for evaluating customers for essential customer status.
We decline to add an explicit economic damage test, or establish a category of essential customer based on economic damage. We have already taken economic factors into account in determining categories of essential customers.
Moreover, we agree with PG&E that the Commission and utilities would be overwhelmed with requests for essential customer status if economic effects permit a customer to qualify as an essential customer. With very limited exceptions (if any), every customer suffers economic damage when exposed to a rotating outage. Damage to any customer affects the local community, and the state.
UC/CSU assert that the challenge here is defining public health and safety. UC/CSU point out, for example, that at the UC Davis campus alone, over 1,800 research laboratories potentially use Class A toxic gases, hazardous chemicals, or other hazardous materials, including Level 3 pathogens. A rotating outage can shut down vital exhaust systems, and place students, employees, and others at great risk. UC/CSU ask that any additional categories be defined so as to allow campuses a reasonable opportunity to present these concerns to the Commission.
Campuses, and all non-residential customers, will have this reasonable opportunity to present their concerns by the process established in the May 21, 2001 Assigned Commissioner's Ruling (ACR). (See Appendix A.) We approve and confirm the ACR and the process therein. (Pub. Util. Code Section 310.) Customers will complete a petition to qualify for essential customer status based on public health and safety. A consultant will evaluate the petitions, and make a recommendation to the Commission. We will give careful consideration to the petitions, and the consultant's recommendations, when we make subsequent decisions exempting individual customers in this new
category. We will there seek a reasonable balance between the need to exempt some customers to protect public health and safety, and the need to maintain as large a pool for rotating outages as possible in the best interest of the state as a whole.
CAHF argues that SNFs now meet the public health and safety standard, and should be classified as essential customers. CAHF states that SNFs should be directly included in the essential customer list, either with hospitals, or as a separate, stand alone category.
We decline to adopt CAHF's recommendation. Rather, we adopt the process in the May 21, 2001 ACR. CAHF should separately petition on behalf of each SNF customer, or each SNF customer should petition on its own, for inclusion in the new essential customer category based on jeopardy or imminent danger to public health and safety. We are convinced that the best opportunity to optimize the overall public health and safety is to consider individual petitions. We are not able to grant additional categorical exemptions for entire classes or subclasses of customers given the need to maintain as large a pool of customers as possible for rotating outages. Rather, we balance individual and statewide competing needs and interests to reach the most reasonable solution possible. We do this while, at the same time, we get ever closer to the minimum percentage we must retain of candidate customers for outages to protect the entire state from widespread or total electrical system collapse, and the devastating effects that could result from that collapse.
ACWA and a host of water companies recommend that the proposed exemption be expanded to consider public welfare, operational considerations, and potential effects on other essential services. Further, ACWA says availability of backup generation should not itself be the basis of denying exemption.
To the extent these recommendations would exempt water and sewage treatment facilities, we agree with PG&E that the proposals should not be adopted. Rather, as PG&E points out, over a thousand additional circuits in PG&E's service territory alone would be affected. We are convinced the more reasonable approach is to adopt the amendment to the essential customer list as we do herein, and consider individual requests by the process established in the May 21, 2001 ACR.
1. Many customers continue to press for exemption from rotating outages for Summer 2001.
2. The extraordinary circumstance of alleviating unacceptable jeopardy or imminent danger to the general public health and safety during the summer of 2001 from any rotating outages justifies the expedited contracting for consultant or advisory services.
3. Exemption of customers from rotating outages reduces the pool of candidate customers for rotating outages, and increases the potential frequency and duration of rotating outages experienced by the remaining customers in the candidate pool.
4. Maintenance of a reasonable pool of customers available for rotating outages is vital to have rotating outages as a tool in protecting the state from widespread system collapse when demand otherwise exceeds supply.
5. The existing Priority System for Rotating Outages takes several factors into account, including, but not limited to, the most important public benefits; greatest public need; economic, social and other effects of a temporary discontinuance of electrical service; and allocation rules, orders and regulations of the federal government.
6. The existing Priority System for Rotating Outages largely results in eligibility for essential customer status based on public health and safety.
7. Notice of an amendment to D.01-04-006 was provided by the filing and service of a Draft Decision with the proposed amendment, upon which parties were invited to file and serve comments and reply comments.
8. The public interest in quickly amending D.01-04-006 so that consideration may be given to exemption of additional customers for Summer 2001 outweighs the public interest in a full 30-day public review and comment of the proposed amendment.
9. Local emergency officials cannot be expected to know and consider the status of the entire statewide electrical system.
10. Every customer, with few if any exceptions, suffers economic damage when exposed to a rotating outage, and that damage affects the local community and the state.
11. The process for considering additional exemptions from rotating outages provided by the May 21, 2001 ACR permits a reasonable opportunity for non-residential customers to present public health and safety concerns to the Commission.
12. The best opportunity to optimize the overall public health and safety is to consider individual petitions for essential customer status based on imminent jeopardy or danger to public health and safety.
1. Pub. Util. Code Section 1708 permits the Commission to amend an order or decision upon notice to parties, with the opportunity for parties to be heard.
2. The Commission should be responsive to pending and new requests for exemption from rotating outages.
3. Public health and safety should be considered in assessing whether or not any other customers should be added to the list of essential customers.
4. Petitioners should be required to demonstrate that inclusion of the customer in a rotating outage presents unacceptable jeopardy, or imminent danger, to public health and safety beyond economic hardship or inconvenience to the customer.
5. In making these finding, we have determined than an extraordinary circumstance exists that justifies expedited contracting for consultant or advisory services, consistent with Public Utilities Code § 632.
6. The period for public review and comment on the proposed amendment to D.01-04-006 should be reduced, pursuant to Rule 77.7(f)(9).
7. Respondent utilities should comply with valid orders from responsible emergency officials when jeopardy or danger to public health and safety is imminent, including not curtailing, or restoring, a circuit that is scheduled to be, or has been, curtailed, when that action is coordinated with the CAISO to the extent necessary and reasonable.
8. The May 21, 2001, ACR should be approved and confirmed.
9. This order should be effective today so that any potential threat to public health and safety can be addressed immediately.
IT IS ORDERED that:
1. The May 21, 2001 Assigned Commissioner's Ruling, and the process and orders adopted therein, is approved and confirmed. The Ruling is contained in Appendix A.
2. The Priority System for Rotating Outages is amended by adding Item 1.M to the list of Essential Customers:
"M. Limited other customers as necessary to protect public health and safety, to the extent exempted by the Commission."
The amended Priority System for Rotating Outages is contained in Appendix B.
3. The period for public review and comment on the Draft Decision is reduced.
4. This rulemaking remains open.
This order is effective today.
Dated May 24, 2001, at San Francisco, California.
LORETTA M. LYNCH
President
CARL W. WOOD
GEOFFREY F. BROWN
Commissioners
I dissent.
/s/ Henry M. Duque
Commissioner
I dissent.
/s/ Richard A. Bilas
Commissioner
APPENDIX A
CXW/t94 5/21/2001
BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA
Order Instituting Rulemaking into the operation of interruptible load programs offered by Pacific Gas and Electric Company, San Diego Gas & Electric Company, and Southern California Edison Company and the effect of these programs on energy prices, other demand responsiveness programs, and the reliability of the electric system. |
Rulemaking 00-10-002 (Filed October 5, 2000) |
PRESIDING OFFICER AND ASSIGNED COMMISSIONER'S RULING
ON PROCESS FOR A CUSTOMER TO QUALIFY AS AN ESSENTIAL
CUSTOMER NORMALLY EXEMPT FROM ROTATING OUTAGES
ON THE BASIS OF PUBLIC HEALTH AND SAFETY
1 Comments were filed by Southern California Edison Company, San Diego Gas & Electric Company (SDG&E), California Energy Commission (CEC), Energy Producers and Users Coalition (EPUC), University of California and California State University (UC/CSU), Internal Services Department of the County of Los Angeles, and the California Association of Health Facilities (CAHF). Comments were also received from the Association of California Water Agencies (ACWA). Reply comments were filed by Pacific Gas & Electric Company (PG&E) and UC/CSU. In addition, letters were received from many water districts (e.g., Metropolitan Water District of Southern California, Humboldt Bay Municipal Water District, Santa Margarita Water District, Marina Coast Water District, Calleguas Municipal Water District, Northern California Water Association, Desert Water Agency, Yolo County Flood Control and Water Conservation District, Valley Center Municipal Water District, Eastern Municipal Water District, Lindsay-Strathmore Irrigation District, Bear Valley Community Services District, Placer County Water Agency, Kern County Water Agency, Newhall County Water District, Sonoma County Water Agency, Westside Water District).
