4. Discussion
Existing § 13 of GO 167 provides Commission process for formal and informal enforcement. Subsection 13.3 ("Imposition of Fines for Specified Violations") delegates authority to CPSD to assess a scheduled fine for a specified violation, and states the process to be used by a GAO for accepting or contesting a fine. Appendix F lists the five specified violations along with the applicable scheduled fine.
CPSD recommends changes to § 13.3 and Appendix F. In particular, CPSD proposes that § 13.3 clarify and expand upon who may assess the fine; change "contest" to "appeal"; and include new sections related to default, form and content of citations, service of citations, procedures for appeal, and prohibition of ex parte communication. CPSD also proposes the fourth specified violation in Appendix F be modified to eliminate the requirement that the violation be the result of negligence. (See Attachment A for a version that shows the proposed changes in strike-out and underline form.)
We adopt all of CPSD's proposals. (See Attachment B for the final version without strike-out and underline.) These changes provide exactly the type of procedural detail that we found desirable and necessary.11 The modifications benefit all stakeholders by providing clarity in, and streamlining of, the administrative process. They provide desirable consistency with other citation programs.12 As discussed below, the objections and concerns raised by Coalition and SCE are not persuasive.
4.1. Nature of Program
Coalition argues that CPSD's proposed modifications fundamentally change the nature of the citation program from one where the GAO must (a) agree to the fine to (b) defend itself in a formal matter appealing the fine. This exceeds the Commission's instructions, according to Coalition, to "further detail the procedural steps to be followed in implementing the program," which the Coalition points out we said might include specifying "the form and content" of the notice to a GAO.13
We disagree. The proposed changes essentially do nothing more than streamline the administrative process for hearing contested matters consistent with other citation programs. For example, GO 167 now provides that staff may "proceed to any remedy otherwise available to the Commission." (Existing GO 167, § 13.3.4.) The proposed changes state with greater specificity the remedy we expect CPSD to use. The changes clarify and streamline the procedures and processes that apply to the remedy.
Moreover, in determining "that there should be supplemental proceedings to refine the program," we did not limit CPSD to the form and content of notice requirements. This was an example, not a strict limitation. We intended a somewhat broader examination "to refine the program," including examination of the relationship with "other citation programs that the Commission has implemented."14 CPSD's proposal accomplishes this broader examination.
Coalition complains that the proposed process shifts the burden to the GAO.15 Coalition is incorrect. The proposal clearly states that CPSD bears the burden.16
Coalition is concerned that the proposal requires the GAO to state its grounds for appeal. Coalition reasons that this suggests the existence of some sort of appeal screening process that is not presently in GO 167. Coalition's concern is misplaced. Requiring a clear, written statement of the GAO's position provides an additional opportunity for CPSD to "withdraw the citation where facts and circumstances warrant such action."17 This promotes efficiency.
Further, the requirement to state the grounds for appeal simply results in the provision of relevant information to the Administrative Law Judge (ALJ) in a timely manner so that the fundamental positions are clear. This provides cost savings and efficiency by, for example, potentially eliminating or streamlining an otherwise costly and time-consuming prehearing conference. It is not a screening tool to minimize or eliminate any party's rights. Unless the GAO declines, the GAO will have a hearing before an ALJ, no matter the stated grounds for appeal.18
Coalition is concerned that the CPSD proposal improperly delegates powers to CPSD, and thereby resurrects "the delegation issue the Commission has twice addressed."19 To the contrary, the proposal does not increase the authority delegated to CPSD. Both in GO 167 now and with the proposed change, the fine is payable only if the GAO accepts the fine, or the fine is levied by the Commission. The proposal simply provides specificity and efficiency for Commission consideration of the matter when a GAO does not accept the fine. For a contested fine, that includes a hearing before an ALJ, followed by an order placed on a Commission agenda.20 It also includes efficient process if the GAO fails to respond within a reasonable amount of time (i.e., default). This does not improperly delegate powers or shift burden. Rather, it provides reasonable procedure that protects the rights of each party.
Finally, Coalition asserts that changing the terminology from that wherein the GAO may "contest" a fine to one in which the GAO is obligated to "appeal" suggests a different framework and expectation. Further, Coalition says referring to the GAO as "respondent" confuses matters since a respondent "usually refers to the party that is the defender of an appealed decision."21 We are not persuaded. Existing citation programs refer to the process as an "appeal" with a "respondent."22 The proposal conforms GO 167 to other citation programs. It does not change either the framework or expectation. Most importantly, it does not change the fundamental rights or responsibilities of any participant. Rather, it provides clarity and efficiency in a parallel manner to other similar programs.
In summary, the proposal is not a fundamental change in the nature of the existing program. Rather, our adoption of the proposal is responsible government implementing efficiencies for all stakeholders.
4.2. Confusion and Unnecessary Details
Coalition asserts that CPSD's proposed revisions "create confusion regarding how the process would work in practice."23 Coalition's concern is unsupported and without merit. CPSD has modeled the proposed process on other Commission citation programs that function well. Coalition offers no evidence that the other programs cause confusion among their participants. Coalition offers no compelling reason why an analogous program would create confusion when applied to GAOs.
Coalition claims that the proposed changes foster further confusion because they include provisions which are unnecessary or redundant of existing rules. In support, Coalition cites a proposal which states that the ALJ may continue hearings, but Coalition points out that an ALJ already has that authority. Coalition also cites several other examples of proposed changes that are unnecessary or redundant, such as: hearings may be re-calendared, transcripts may be ordered, and the GAO must pay for its own attorney.
We think inclusion of these details is not unreasonable. First, it provides desirable consistency in a parallel structure to the rules in other enforcement programs wherein these provisions are stated. Second, it summarizes relevant matters in one place for a GAO who may not have as much experience with Commission process as may other regulated entities or more frequent practitioners before the Commission.
Coalition is concerned that there are conflicts between the Commission's Rules of Practice and Procedure and the proposed changes to GO 167. In support, Coalition notes that proposed § 13.3.8.7 states:
Formal rules of evidence do not necessarily apply, and all relevant and reliable evidence may be received in the discretion of the Administrative Law Judge.
In contrast, Coalition says Rule 13.6(a) places greater emphasis on fairness to the parties by that ruling stating:
Although technical rules of evidence ordinarily need not be applied in hearings before the Commission, substantial rights of the parties shall be preserved.
We find no conflict. First, the proposed language provides desirable consistency in a parallel structure to the language used in other enforcement programs.24 Second, the absence of saying "substantial rights of the parties shall be preserved" does not vacate either the principle or those rights. Appeal of a Commission order may be taken if the Commission commits legal error. Failure to provide a party its substantial rights would be grounds to allege legal error.
Coalition believes needless confusion is created by a possible difference in treatment of submission. According to Coalition, proposed § 13.3.8.8 provides: "ordinarily, the case will be submitted at the close of hearing" while existing Rule 13.14 provides: "a proceeding shall stand submitted for decision by the Commission after the taking of evidence, the filing of briefs, and the presentation of oral argument as may have been prescribed." Coalition wonders if this means that under the proposed program there will be no opportunity for briefs or oral argument.
There is no confusion. The proposed rule is consistent with treatment of submission in other citation programs. These programs seek to minimize cost and burden on each respondent and the Commission. To accomplish this, the proceeding will normally be submitted at the close of hearing. As with other citation programs, proposed § 13.3.8.8 continues:
The Administrative Law Judge, upon a showing of good cause, may keep the record open for a reasonable period to permit a party to submit additional evidence or argument.
Thus, the taking of briefs, or the hearing of oral argument, will occur when appropriate. In the interest of designing a program that is not unnecessarily burdensome on stakeholders, however, briefs or oral argument will not necessarily take place in all cases. This slight difference in approach to submission is efficient and reasonable while maintaining the rights of all parties.
CPSD proposes that ex parte communications be banned from the date the citation is issued until after the final order is issued. Coalition and SCE contend that CPSD's proposed ex parte rule is unnecessary since current rules cover ex parte communication. They also assert that the proposed rule may conflict with the Commission's existing ex parte rules because under current rules not all ex parte communications are prohibited. Coalition and SCE conclude that the proposed rule should be deleted. Again, we are not persuaded.
CPSD's proposed ex parte provision is consistent with that in other Commission citation programs.25 We see no reason to depart from applying a uniform approach. Furthermore, these matters are clearly adjudicatory in nature.
Finally, Coalition strongly encourages that we limit the provisions of GO 167 to only those strictly necessary to carry out the Commission's intent, and that we do not clutter GO 167 with what Coalition characterizes as unnecessary, redundant, conflicting and confusing provisions. We disagree in part, for the reasons stated above. At the same time, we agree in part, and, therefore, do not include other items in the GO that would unquestionably be unnecessary, redundant, conflicting or confusing.26
4.3. Cap on Fine
SCE argues that CPSD's proposed § 13.3.4 should be changed to limit the available remedies in the event of an appeal. Otherwise, SCE reasons that an appeal might lead to an even greater fine than specified in Appendix F, thereby effectively penalizing a GAO for exercising its right to an appeal. We are not persuaded.
The current language of § 13.3.4 provides:
If the matter proceeds to a more formal proceeding before the Commission, neither CPSD in its investigation nor the Commission will be limited to the specified Violations or the schedule of fines set forth in Appendix F to this General Order.
CPSD proposes that § 13.3.4 read:
In the event of an appeal, any remedy available may be imposed, and the remedy shall not be mandated or limited to the scheduled fine.
There is no substantive difference in the remedies available under either version of § 13.3.4. Nonetheless, the proposed language is a modest improvement. For example, facts learned during the appeal may mitigate the penalty.27 The new language makes clear that the fine is not mandated to be at the level of the scheduled fine.
On the other hand, facts learned at hearing might enhance the penalty. The proposed language, just as the existing language, makes clear that the Commission is not limited to the scheduled fine.
This does not punish a GAO for exercising its rights. It merely clarifies that the authority and process delegated to CPSD is somewhat constrained consistent with delegation of certain matters to staff. The same constraints do not apply to the Commission.
Moreover, it would be unreasonable for the Commission to limit itself before hearing the facts and considering the law in any particular case. Rather, CPSD and the GAO may present the facts and the law at hearing. The GAO may argue at the appropriate time that the penalty, if any, should not exceed the scheduled fine in order not to effectively penalize the GAO for undertaking the appeal. The Commission will consider that argument, if made, and all other facts and argument at the appropriate time. We decline to prejudge such arguments here.
4.4. Negligence as an Element in Fourth Specified Violation
Appendix F lists five specified violations and the related fines to be imposed. The fourth specified violation is: "Negligent submission of inaccurate information in response to an information request under Section 10.0 of the General Order." CPSD proposes to remove the word "negligent."
We adopt CPSD's proposed change. The purposes of GO 167 include ensuring vitally and critically important public health, public safety, electric system reliability and electric system adequacy.28 As we said in D.04-05-018:
The GO does require adherence to the standards or other obligations set forth therein, and this obligation exists whether or not the generator intended a violation or was negligent or reckless.29
This unconditioned requirement is reflected in the language of the other four specified violations, none of which require an inquiry into the intent, negligence, recklessness or reasonableness of a GAO's failure to comply with GO 167. In the first instance of applying a scheduled fine for a specific violation, a straightforward adherence to the standard is reasonable. This approach is as applicable for the fourth specified violation as the other violations.
Coalition objects. First, Coalition contends that this alteration expands the scope of the fourth specified violation. We disagree. As noted above, the removal of the word "negligent" is consistent with the purposes of GO 167, and is a parallel application with the other four violations.
Second, Coalition says deleting the word "negligent" greatly expands the scope of the fourth violation, potentially applying penalties to a much broader set of possible errors. Coalition cautions:
Negligence is a legal doctrine that is directly tied to a duty of care; if a party exercised reasonable care under the circumstances, there is no legal negligence. With CPSD's proposed deletion, submission of any inaccurate information, regardless of the reason for the inaccuracy, the efforts of the filer to ensure the accuracy of the information, or the immateriality of the error, would become a specified violation subject to substantial fines.30
We largely agree with Coalition in this regard, and adopt the CPSD proposal in part because of these concerns. We do not intend that our delegation to CPSD compel CPSD to make judgments requiring an application of the legal doctrine of negligence. The delegation is intended to be more direct, clear and straightforward. If the GAO disagrees with the citation (including the GAO's defense that it exercised reasonable care under the circumstances), the GAO may appeal the citation. The appeal involves a level of judgment properly before an ALJ and the Commission. That judgment may include whether or not the sanction should be applied, and whether or not a sanction, if applied, should be adjusted for mitigating factors.31
At the same time, this does not limit CPSD's ability to apply reasonable, if limited, judgment. For example, CPSD may "at its discretion...withdraw the citation where facts and circumstances warrant such action."32 CPSD may withdraw the citation if the GAO presents facts and circumstances that reasonably explain the situation and warrant such withdrawal.
Finally, Coalition says the proposed change is in excess of our direction to CPSD to provide detail on the procedural steps in the citation program. This argument is without merit. Whether the proposed change is procedural or substantive is of no matter. Whether or not D.06-01-047 directs CPSD to provide such proposals, we are not bound to reject constructive proposals. Moreover, we sought a refinement of the program, including consideration of other citation programs. This proposal is a reasonable refinement that considers other citation programs. For example, negligence is not a factor in the specified violations included in our resource adequacy citation program.33
4.5. Other Concerns
Coalition raises other concerns. Coalition recommends that we direct CPSD to initiate a meet and confer process with GAOs in order to address these concerns, and to develop the citation program further. We decline to do so. As discussed below, these concerns do not merit our ordering a meet and confer process.
First, a meet and confer session would use the limited time, money, and resources of all stakeholders, including GAOs, Coalition, and the Commission. It would further delay implementation of proposed changes which are reasonable, for the reasons discussed in previous sections of this decision. Moreover, Coalition and/or GAOs have had adequate time to seek a meeting with CPSD if they, in fact, believed a meeting would have been productive. We have no information that such meeting was sought and denied.34 We decline to order parties to meet and confer when we are not convinced that the extra costs would outweigh the benefits, if any.
Second, Coalition is concerned that, as proposed, the CPSD Director may designate an employee to assess the scheduled fine. Coalition says it is not clear how the CPSD Director will designate that person, or how GAOs will be made aware of this delegation. GAOs ask that the process be further clarified with GAO input. We are not convinced. There is no need for GAO input on the method used by the CPSD Director to designate or assign an employee to carry out CPSD's duties. The CPSD Director has the authority and responsibility to make such determinations and staff assignments. Industry input is not needed on internal personnel and management issues.
Regarding the GAO being made aware of the delegation, a GAO may assume that any CPSD employee who issues a citation is authorized to do so. A GAO may appeal the citation if there is reason to believe otherwise. The GAO should list this as one reason in its grounds for appeal, if appropriate. (Proposed § 13.3.8.1.) Absent compelling reason otherwise, we would expect the CPSD Director to withdraw the citation if it was issued by an employee who was not authorized to do so. (Proposed § 13.3.4.) If the matter moves to hearing, CPSD has the burden of proof. The required proof may include that the citation was issued by an employee delegated to do so. If CPSD does not meet its burden of proof that the employee was authorized to cite the GAO, absent compelling reason otherwise, we would expect the citation to be set aside.
Third, Coalition asserts it is crucial for the Commission to ensure that the GAO has actually received the citation, since default results in significant financial implications. Coalition proposes that the Commission replace the requirement of service by first class mail with a requirement that citations be served by both registered mail and electronic mail. We decline to adopt this suggestion. Service by first class mail is the standard in other citation programs. We are not aware of any complications related to service by first class mail in other programs that would caution us to adopt a different approach here.
In addition, because failure to receive notice might be grounds for appeal, CPSD has a strong incentive to ensure that service is perfected. We are confident that CPSD will take reasonable actions in order to establish, if challenged, that service was properly completed. In addition to first class mail, we encourage (but do not require) CPSD to use electronic mail in most, if not all cases. Further, CPSD may consider using registered mail in cases where that would help establish service was completed. We leave the details up to CPSD.
Finally, Coalition recommends that program modifications be designed to encourage settlements before CPSD issues a citation. In particular, Coalition suggests that a requirement be added for CPSD and the GAO to meet and confer on the possibility for settlement before CPSD issues a citation.
We consistently encourage open communication between GAOs and the Commission, but are not convinced that a meet and confer duty should be added. We expect GAOs to fully cooperate with all staff information requests, audits, inspections and investigations. We expect there will be opportunities for meeting and conferring during the pendency of those requests, audits, inspections and investigations. We do not believe it is necessary or desirable to require a specific meeting and conference. A GAO may request a meeting and conference at any time, including before or when the citation is issued. The GAO may also request a meeting when it files its Notice of Appeal. The Notice of Appeal may, in fact, ripen the issue to the point where a meeting and conference, if not held before, would be productive. We expect CPSD to agree to all reasonable requests for a meeting and conference. The hearing may be continued if both parties inform the ALJ that they desire time to meet and confer.
Thus, for all the reasons discussed above, we decline to direct GAOs and CPSD to meet and confer on further modifications to GO 167 before the petition is considered.
11 D.06-01-047, p. 13.
12 In addition to the two resolutions referenced in a previous footnote (i.e., Resolution UEB-001 and Resolution E-4017), also see Resolution ALJ-187 (September 22, 2005, regarding a citation program for certain violations committed by Household Goods Carriers, Charter Party Carriers, and Passenger Stage Corporations, administered by CPSD).
13 Coalition Comments, p. 4 and footnote 7, citing D.06-01-047. (See D.06-01-047, p. 13.)
14 D.06-01-047, p. 13.
15 The shift is, according to Coalition, from the GAO accepting a fine to the GAO defending itself in a formal appeal of a fine.
16 Proposed § 13.3.8.7 of GO 167.
17 Proposed § 13.3.4 of GO 167.
18 Proposed § 13.3.8.4 of GO 167.
19 Coalition Comments, p. 5.
20 Proposed § 13.3.8 of GO 167.
21 Coalition Comments, p. 6.
22 See, for example, Resolution UEB-001, Items 6-8 at pp. 3-6; Resolution E-4017, Item 2.7 at pp. 6-7; Resolution ALJ-187, Item 4 at pp. 2-3.
23 Coalition Comments, p. 7.
24 See, for example, Resolution E-4017, Item 2.7.7 at p. 7; Resolution ALJ-187, Item 4(h) at p. 3.
25 See, for example, Resolution ALJ-187, Item 4(k) at p. 3; Resolution UEB-001, Item 9 at p. 6; Resolution E-4017, Item 2.7.10 at p. 7.
26 For example, we do not include Commission rules regarding ethics, construction, signatures, service, amendments, corrections, filing, and computation of time. (See Article 1 of the Commission's Rules).
27 Whether or not the Commission imposes a sanction at all is govern by several factors. (See GO 167, § 14.1.) Sanctions may be mitigated or enhanced based on several factors. (See GO 167, §§ 14.2 and 14.3.) Consideration of these factors is not for CPSD, however, but is for the Commission, since GO 167 directs that these factors do not apply to specified violations and the schedule of fines set forth in GO 167, Appendix F, when administered by CPSD. (See GO 167, § 14.4.)
28 See, for example, GO 167, § 1.0, which says in relevant part: "The purpose of this General Order is to implement and enforce standards for the maintenance and operation of electric generating facilities and power plants so as to maintain and protect the public health and safety of California residents and businesses, to ensure that electric generating facilities are effectively and appropriately maintained and efficiently operated, and to ensure electrical service reliability and adequacy."
29 D.04-05-18, Attachment B, p. 12 (emphasis added).
30 Coalition Response, pp. 9-10.
31 GO 167, § 14.0.
32 Proposed § 13.3.4 of GO 167.
33 See, for example, Resolution E-4017, Appendix A.
34 Coalition does not support its request, for example, by showing that it sought a meeting with CPSD, but that CPSD denied the request.
