IV. EQUITABLE ESTOPPEL
PG&E also maintains that the Commission is equitably estopped from refusing to use market valuation as a basis for PG&E's URG revenue requirement. According to PG&E, the we are bound by the "quid pro quo" of AB 1890, and our decisions implementing that statute, which allow PG&E to recover the market value of its generation assets. This argument fails because the standard for applying equitable estoppel against a government agency has not been met.
The standard for estoppel has been stated as follows:
Generally speaking, four elements must be present in order to apply the doctrine of equitable estoppel: (1) the party to be estopped must be apprised of the facts; (2) he must intend that his conduct shall be acted upon, or must so act that the party asserting the estoppel had a right to believe it was so intended; (3) the other party must be ignorant of the true state of facts; and (4) he must rely upon the conduct to his injury.
(Driscoll v. City of Los Angeles (1967) 67 Cal.2d 297, 305.) In the case of estoppel against a government agency the person asserting estoppel must also "demonstrate that the injury to his personal interest if the government is not estopped exceeds the injury to the public interest if the government is estopped." (Stewart v. City of Pismo Beach (1995) 35 Cal.App.4th 1600, 1607.)
PG&E's estoppel claim is unconvincing for a number of reasons. Most significantly, there is no injury to PG&E in the Commission's decision not to rely on market valuation in its determination of PG&E's prospective URG revenue requirement. The Commission has not foreclosed the possibility that PG&E will be able to recover its stranded costs in some manner. There is no support for PG&E's contention that the Commission is in any way estopped from refusing to adopt the particular mechanisms suggested by PG&E at this phase. Because the decision in question does not result in any injury to PG&E, the last two prongs of the estoppel test are not met.
Furthermore, during our earlier actions implementing AB 1890, we were not aware of the relevant "facts" leading to this Decision any more than PG&E was. We did not know that operating costs would exceed revenues during a portion of the rate freeze period, or that subsequent legislation would modify portions of AB 1890. For all of these reasons, we are not estopped from determining a prospective URG revenue requirement that is not based on market valuation or past undercollections.
No further discussion of PG&E's allegations is warranted.
THEREFORE, IT IS ORDERED that:
1. The Utility Reform Network's (TURN's) motion to accept its late-filed response is granted.
2. PG&E's application for rehearing of D.01-10-067 is hereby denied.
This order is effective today.
Dated February 7, 2002, at San Francisco, California.
LORETTA M. LYNCH
President
HENRY M. DUQUE
RICHARD A. BILAS
CARL W. WOOD
GEOFFREY F. BROWN
Commissioners
