4. Request for Adoption of the Settlement Agreement
This Settlement Agreement is submitted pursuant to Rule 12.1 et seq. of the Commission's Rules of Practice and Procedure (Rules). The Settling Parties assert that the Settlement Agreement is consistent with Commission decisions on settlements which express the strong public policy favoring settlement of disputes if they are fair and reasonable in light of the whole record.8 This policy supports many worthwhile goals, including reducing the expense of litigation, conserving scarce Commission resources, and allowing parties to reduce the risk that litigation will produce unacceptable results.9 As long as a settlement taken as a whole is reasonable in light of the record, consistent with law, and in the public interest it should be adopted.
The general criteria for approval of settlements are stated in Rule 12.1(d) as follows:
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.10
The Settlement Agreement meets the criteria for a settlement pursuant to Rule 12.1(d), as discussed below.
4.1. The Settlement Is Reasonable In Light of the Record
The prepared testimony, the Settlement Agreement itself, and the Settling Parties' motion contain the information necessary for the Commission to find the Settlement Agreement reasonable in light of the record. Prior to the settlement parties conducted discovery, and SCE served testimony on the issues related to system reliability. The prepared testimony and related exhibits will be made part of the Commission's record of this proceeding. While only SCE has served its testimony, the other parties have had the opportunity to review and assess SCE's litigation positions and their potential responses to SCE.
The prepared testimony of the parties, comprising the record for this proceeding, contains sufficient information for the Commission to judge the reasonableness of the Settlement Agreement. The Settlement Agreement represents a reasonable compromise of the parties' positions and is reasonable in light of the entire record of this proceeding.
4.2. The Settlement Agreement Is Consistent With Law
Upon review of the Settlement we conclude that the terms of the Settlement Agreement comply with all applicable statutes and prior Commission decisions, and reasonable interpretations thereof. In agreeing to the terms of the Settlement Agreement, the Settling Parties have explicitly considered the relevant statutes and Commission decisions and believe that the Commission can approve the Settlement Agreement without violating applicable statutes or prior Commission decisions. The December 18, 2008 settlement conference was properly noticed consistent with Rule 12.1.
4.3. The Settlement Agreement Is In the Public Interest
The Settlement Agreement is in the public interest and in the interest of SCE's customers. For example, as a result of the Settlement Agreement, SCE ratepayers will receive a $4 million credit applied to their rates as well as the benefit of avoiding another $2 million rate increase for which SCE may have been eligible. Additionally, SCE ratepayers are assured that they will not have to pay incentive amounts in rates for any future PBR incentive mechanism before the completion of SCE's 2015 GRC cycle. The Settlement Agreement avoids the cost of further litigation, and frees up Commission resources, as well as the resources of other parties. The prepared testimony and evidentiary record contain sufficient information for the Commission to judge the reasonableness of the Settlement Agreement and to discharge any future regulatory obligations with respect to it. We also remind the parties that, pursuant to Rule 12.5, this Settlement is not precedential. Rule 12.5 states:
(Rule 12.5) Adoption Binding, not Precedential
Commission adoption of a settlement is binding on all parties to the proceeding in which the settlement is proposed. Unless the Commission expressly provides otherwise, such adoption does not constitute approval of, or precedent regarding, any principle or issue in the proceeding or in any future proceeding.
8 See, e.g., D.88-12-083 (30 CPUC2d 189, 221-223) and D.91-05-029 (40 CPUC2d 301, 326).
9 D.92-12-019, 46 CPUC2d 538, 553.
10 See also, Re San Diego Gas & Electric Company, (D.90-08-068), 37 CPUC2d 346, 360: "[S]ettlements brought to this Commission for review are not simply the resolution of private disputes, such as those that may be taken to a civil court. The public interest and the interest of ratepayers must also be taken into account and the Commission's duty is to protect those interests."
