Assignment of Proceeding
Loretta Lynch is the Assigned Commissioner and Myra Prestidge is the assigned Administrative Law Judge in this proceeding.
1. The Sheila Street facility is located in Commerce, California, in an urban, industrial area that is zoned for manufacturing and industrial uses, not for agriculture.
2. Zacky transports mature chickens, which are raised at Zacky's grow-out ranches, to the Sheila Street facility to be slaughtered and prepared for market.
3. Edison bills Zacky for electricity used at the Sheila Street facility at a commercial rate.
4. Edison bills Zacky for electricity used at the grow-out ranches at an agricultural rate.
5. At the Sheila Street facility, chickens are kept alive in a holding shed for approximately seven to twenty-four hours and are deprived of food and water during this period so that their digestive systems will be clear before slaughter. The chickens are then slaughtered, plucked, chilled, and boxed at the Sheila Street facility.
6. Zacky does not grow chickens for the purpose of increasing their size and weight at the Sheila Street facility.
7. Edison's Tariff Schedule TOU-PA-5 states that it applies when 70 percent or more of the customer's electrical usage is for general agricultural usage.
8. TOU-PA-5 does not define "agriculture" or "general agricultural usage".
9. Edison has determined eligibility for an agricultural rate under TOU-PA-5 by reference to its tariff Rule 1 definition of "agricultural power service" for many years.
10. Edison had the same Rule 1 definition of agricultural power service prior to l951, and the language of Edison's eligibility requirements for service under TOU-PA-5 has remained the same since the inception of this tariff in 1988.
11. Rule 1 defines "agricultural power service" as follows:
Agricultural power service is that portion of electric energy and service used by a person in connection with the production, harvesting, and preparation for market of agricultural and horticultural products, including poultry and livestock, on land owned and/or operated by such person for the production of agricultural products, but does not apply to the processing of products raised by others.
12. The Sheila Street facility is different from other agricultural operations at which chickens are slaughtered on the same premises at which they were grown because the Sheila Street facility is located in a highly commercial, industrial area and is zoned for manufacturing and industrial uses, not agriculture.
13. Zacky transports mature chickens approximately one hundred miles from its grow-out ranches to the Sheila Street facility for slaughter.
14. The holding shed at the Sheila Street facility is adjacent to the processing facility and occupies only 3.9 percent of the plant at the Sheila Street facility.
15. Zacky admitted that it is unaware of any poultry processing plant located on the same land on which the chickens were raised.
1. Like other administrative regulations, tariffs filed with the Commission are subject to the rules of statutory interpretation.
2. To interpret a tariff, the Commission should look first at its language, giving words their ordinary meaning and avoiding interpretations which make any language surplus.
3. The words in a tariff should be interpreted in context and in a reasonable, common-sense manner.
4. If the language of a tariff is clear, the Commission need not look further to interpret its meaning.
5. If the language of a tariff contains an ambiguity, the Commission may then look to sources beyond the tariff language, such as the regulatory history, and the principles of statutory construction, to interpret the tariff.
6. An ambiguity exists if the language in a tariff may reasonably be interpreted in more than one way.
7. If an ambiguity exists in a tariff, the tariff must be construed in favor of the customer.
8. The Commission has discretion to determine whether an interpretation of a tariff sought by a party is reasonable.
9. The plain language of Rule 1, as regards poultry, provides that agricultural power service refers to electricity used by a person in connection with the production, harvesting, and preparation for market of poultry, on land owned and/or operated by such person for the production of poultry.
10. Neither TOU-PA-5 nor Rule 1 defines "production."
11. The interpretation of similar words in other statutes related to agriculture is helpful in construing TOU-PA-5 and Rule 1.
12. Food and Agriculture Code Sections 25412 and 24953 both define "producer" as: Any person engaged in the business of growing any poultry, which is marketed as poultry meat, for a period of three weeks or more for the purpose of increasing the size and weight of such poultry.
13. Food and Agriculture Code Section 24953 defines "growing poultry" as "feeding and caring for poultry."
14. Food and Agriculture Code Section 18675 defines "prepared" as follows: "slaughtered, canned, salted, stuffed, rendered, boned, cut up, or otherwise manufactured or processed."
15. Applying the above definitions and interpreting the plain language of Rule 1 in a reasonable, common-sense way, Zacky is not engaged in the production of poultry at the Sheila Street facility.
16. Under the plain language of Rule 1, Zacky is not entitled to be billed for electrical service used at the Sheila Street facility at an agricultural rate because the preparation of the poultry for market at the facility does not occur on property owned or operated by Zacky, on which the chickens were grown.
17. Zacky's argument that it is entitled to be billed for electricity used at the Sheila Street facility at an agricultural rate because it is a vertically integrated poultry operation is without merit, because this interpretation would contradict Rule 1.
18. The testimony of Michael Boccadoro that the legislative intent behind the adoption of Section 744 was to assist vertically integrated agricultural operations, such as Zacky, is not determinative of legislative intent.
19. The previous Commission decisions cited by Zacky do not apply in this case because they involve interpretations of a PG&E tariff which has substantially different language from TOU-PA-5 and Rule 1 and substantially different factual situations.
20. The interpretation of a tariff is a question of law for the Commission to decide.
21. Section 453 prohibits undue discrimination by public utilities as to rates, charges, service, facilities, or in any other respect, as between different persons or corporations or different localities or classes of service. A party claiming discrimination under Public Utilities Code Section 453 must establish that it has suffered prejudice or disadvantage in relation to a comparable situation.
22. Zacky's claim that Edison's failure to apply TOU-PA-5 to the Sheila Street facility discriminates against Zacky in violation of Section 453 is without merit because Zacky has presented no evidence that it has suffered prejudice or disadvantage in relation to any other similarly situated agricultural business.
23. Although rate classifications in a tariff must be based on reasonable differentiations, rate classifications are not unreasonable or discriminatory because they are not drawn with mathematical precision or result in some inequality.
24. In view of the differences between the Sheila Street facility and other agricultural operations at which chickens are slaughtered on the premises at which the chickens were grown, Edison's interpretation of TOU-PA-5 and Rule 1 does not discriminate against vertically integrated agricultural producers in violation of Public Utilities Code Section 453.
25. Zacky is not entitled to be billed for electricity used at the Sheila Street facility at an agricultural rate pursuant to TOU-PA-5 and Rule 1 and is not entitled to retroactive adjustment of its electric bill.
26. Zacky's appeal of the POD is without merit and should be denied. Similarly, the request for review should be denied.
27. In order to remove uncertainty created by this litigation regarding eligibility for an agricultural rate under Edison's TOU-PA-5, this order should be made effective immediately.
ORDER
IT IS ORDERED that:
16. This complaint is denied.
17. The appeal of Zacky & Sons Poultry Co. and the request for review are denied.
18. This proceeding is closed.
This order is effective today.
Dated April 17, 2003, at San Francisco, California.
MICHAEL R. PEEVEY
President
CARL W. WOOD
LORETTA M. LYNCH
GEOFFREY F. BROWN
SUSAN P. KENNEDY
Commissioners
