IV. Discussion

We preface our discussion with the caveat that our analysis does not focus on whether or not the December 7, 2000 letter from Tenby to SoCalGas created a contract for service. Although the contract formation issues were raised in the lawsuit and in the applications, they are not dispositive of what the Commission needs to examine. Our focus is on whether or not the Resolution should be modified or clarified, and if so, whether the intention of the Resolution was to preclude all transfers into core subscription or core service on and after December 21, 2000.

The first issue to address before reaching the issue of whether the Commission should modify or clarify Resolution G-3304, is whether the requests of Tenby and SoCalGas amount to requests for declaratory relief or an advisory opinion. As noted in the March 7, 2002 ALJ ruling and the February 7, 2003 scoping memo and ruling, the Commission generally disfavors issuing a decision that provides declaratory relief (D.97-10-087 [76 CPUC2d 287, 325,-326]; D.97-09-058 [75 CPUC2d 624, 625]; D.91-11-045 [abstracted at 42 CPUC2d 9]), or which is advisory in nature (D.97-09-058 [75 CPUC2d 624, 625]).

Tenby's lawsuit against SoCalGas and Sempra involves, among other things, Tenby having to purchase natural gas in January 2001 due to SoCalGas' alleged breach of contract to provide Tenby with GN-10 service during that month. Although the Resolution was not mentioned in Tenby's complaint in the lawsuit, SoCalGas demurred to the complaint on the grounds that the Superior Court lacks subject matter jurisdiction over the issues raised in Tenby's civil complaint, and that the court cannot review the Resolution. (Tenby Response to March 7, 2002 Ruling, Exh. 2)

Both Tenby and SoCalGas stipulated to stay the lawsuit until the Commission addresses their respective applications to modify or clarify the Resolution. Tenby requests that the Commission clarify or modify the Resolution to state that anyone who elected to take core subscription or core service from SoCalGas prior to the effective date of the Resolution is not barred from taking such service. SoCalGas requests an interpretation that would prevent a non-core customer who elected core subscription or core service before the effective date of the Resolution from transferring to core or core subscription service beginning on January 1, 2001.

SoCalGas contends that it is not asking the Commission to adjudicate the specific rights of any party, or to adjudicate the pending civil suit. SoCalGas states that it is "not seeking a declaratory order from the Commission, but instead is requesting modification/clarification of Resolution G-3304." (SoCalGas 3/25/02 Response, p. 2) However, it is clear that the applications of both SoCalGas and Tenby are requesting that the Commission interpret the Resolution in a way that will affect the pending Superior Court action involving Tenby's purchase of natural gas from an entity other than SoCalGas in January 2001.¹⁰ Thus, we conclude that the applications of Tenby and SoCalGas to clarify or modify Resolution G-3304 are requests for declaratory relief.

Although the Commission generally disfavors issuing a decision in response to a request for declaratory relief or an advisory opinion, the Commission has made some exceptions. The Commission has issued decisions which provide declaratory relief or are advisory in nature when extraordinary circumstances exist, or if the matter is of widespread public interest. (D.97-09-058 [75 CPUC2d 624, 626]; D.95-01-014 [58 CPUC2d 470, 476]; D.93-08-030 [50 CPUC2d 518, 521]; D.91-11-045 [42 CPUC2d 9]; D.87-12-017 [26 CPUC2d 125, 130])

Even if their applications are deemed to be requests for declaratory relief, SoCalGas states in its response to the March 7, 2002 ruling, and Tenby's reply of April 8, 2002 agrees, that there are legal and policy reasons for issuing a decision in response to a request for declaratory relief. Thus, the next issue we address is whether the legal and policy reasons cited by SoCalGas are sufficient to justify issuing a decision which provides declaratory relief or which is advisory in nature.

The first reason that SoCalGas cites in support of the issuance of a Commission decision clarifying or modifying the Resolution is Public Utilities Code Section 1759. That code section provides in part that "[n]o court of this state, except the Supreme Court and the court of appeal ... shall have jurisdiction to review, reverse, correct, or annul any order or decision of the commission or to suspend or delay the execution or operation thereof, or to enjoin, restrain, or interfere with the commission in the performance of its official duties...." SoCalGas contends that this code section prevents the Superior Court from taking any action that would have the effect of overruling a Commission decision or Resolution. The basis for SoCalGas' demurrer to the civil action is that the Superior Court lacks subject matter jurisdiction to interpret the Resolution, and that several court cases have prevented the trial courts from hindering or frustrating the policies of the Commission.

SoCalGas also contends that when the Superior Court examines the Resolution, it may decide that the Resolution is ambiguous. Because of the potential ambiguity, SoCalGas contends the Commission should determine the meaning of its own decisions and Resolutions as a policy matter. SoCalGas states that since the Commission and the staff were directly involved with the Resolution, the Commission is in a far better position than the trial court to determine the meaning of the Resolution. If the Resolution is ambiguous, Tenby contends that a hearing should be held to properly determine the intent of the Resolution.

SoCalGas further contends that having the Commission interpret the Resolution will promote one of the purposes of the "primary jurisdiction doctrine," which is to ensure the uniform application of regulatory policy. SoCalGas also contends that the Commission should not establish the precedent of deferring to the civil court to interpret a Commission decision or Resolution.

The issue of whether the Commission needs to clarify or modify Resolution G-3304 depends on whether extraordinary circumstances exist, or if the matter is of widespread public interest. SoCalGas identified that numerous other non-core customers were requesting core or core subscription service because of a rapid rise in natural gas prices. Recognizing the potential impact of a transfer of many large non-core customers to core service, SoCalGas filed an advice letter to protect the interests of core customers. An after-the-fact interpretation of the Resolution which could potentially create a loophole for other non-core customers that were then-eligible for core procurement or core subscription service would invalidate the Resolution altogether and potentially increase costs for core customers, precisely the outcome the Resolution sought to avoid and an outcome that is far from the best interest to core customers. Adopting the modifications requested by Tenby would burden core customers while not providing the protection from increases in core costs the Commission had explicitly intended by imposing a temporary moratorium on transfers of non-core service to core service. Accordingly, we will clarify Resolution G-3304 in this particular circumstance.

There is no evidence provided in the text of the Resolution to support either the conclusion that the wording did not invalidate existing notices to switch, such as Tenby's, that were entered into prior to the effective date of the Resolution or that the Commission did not intend to invalidate the transfer of a non-core customer to core service if notice of the transfer was provided prior to the effective date of the Resolution. In contrast, Ordering Paragraph # 2 of the Resolution does not contain such a limitation on the order to suspend transfers, but instead directly ordered SoCalGas "to suspend transfers of customers to core subscription service, Schedule G-CS or applicable core service schedules except for those customers where their gas service provider is no longer offering service in California." (emphasis added) We note that no exception for transfers noticed prior to the Resolution was provided, but an exception was granted to customers without a gas service provider, thereby protecting such customers from losing service. As it turned out, Tenby was able to procure such service from its then-current provider, BP Energy. None of the non-core customers were receiving such core service as of December 21, 2000, even if their notices to SoCalGas to request core service as of January 1 had been previously made. The Commission also stated that it "should consider the temporary suspension of any customer's election to change service," (p. 9, emphasis added) thus indicating its policy to include any customer which elected to change service without reference to timing. The "existing notice to switch" was indeed provided by Tenby and was not "invalidated" by the Commission, but was superseded by the Resolution issued pursuant to General Order 96-A suspending such transfers to a different tariff service.

Public Utilities Code § 1757(a) lists as proper subjects for judicial review of a Commission decision an inquiry into whether the findings in a decision "are not supported by substantial evidence in light of the whole record" and whether "the decision of the commission is not supported by the findings." Courts defer to the findings of the Commission as they would jury findings, but examine whether the Commission has properly exercised its authority by reviewing findings of fact and conclusions of law to ensure that the Commission has not acted arbitrarily. (See TURN v. CPUC (1978), 22 Cal.3d 529, 537-538) As discussed below, substantial evidence supports the conclusion that the Commission ordered SoCalGas to suspend any transfers to switch to core service, including already-noticed requests to switch. In interpreting statutes or contracts, reviewing courts and agencies rely on the plain, commonsense meaning of every word in a statute or contract, and only rely on extrinsic evidence of intent if ambiguity exists. (See, e.g., Hughes v. Board of Architectural Examiners (1998), 17 Cal4th 763 at 775-776; D.01-10-002, 2001 LEXIS 946 at * 14 - * 15; D.90-09-088, 37 CPUC2d 488 at 522) Applying this standard for reviewing the Resolution, only to the extent that the Resolution is ambiguous after examining every word for its commonsense meaning is objective evidence of the intent of the Commission relevant to determine the meaning of a statute or proposition. However, even assuming arguendo that the Resolution is ambiguous as to whether it applies to customers requesting core service prior to the effective date of the Resolution, no extrinsic evidence of intent supports the conclusion that the Commission intended not to apply the ban on transfers to core service to non-core customers who had already provided notice to switch.

An interpretation that Resolution G-3304 only applies to prospective requests to transfer runs counter to the numerous statements in the Resolution condemning the effect of any transfers on core customers, and ignores the Commission's powers under General Order 96-A to modify and interpret contracts entered into by public utilities for tariff services such as the service Tenby wished to obtain, a condition of which Tenby was on notice in its tariffs.¹¹ Nothing in the Resolution suggests that allowing the massive transfer of customers already noticed is in the public interest, as compared to only preventing future transfer of customers. Instead, the Resolution noted the extreme consequence on customers currently taking core service of allowing a large amount of switches to take place on January 1, 2001 (see p.2 of the Resolution), a consequence which applies to all the already-proposed transfers, including Tenby's, which were to take effect on January 1. The Resolution at page 8 mentioned the consequences to gas consumers of suspending transfers but noted that "it leaves them in the same markets as defined and accepted for their customer classes last year or the year before." The Resolution pointedly noted that the "ability to transfer service was never envisioned to accommodate all eligible customers or a significant portion all at one time," (p. 8, emphasis added) which indeed would have been the case if all the transfers already noticed by the effective date of the Resolution were allowed to take place. The Resolution notes that "such a large-scale switch to the incumbent utility only increases SoCalGas' potential to exercise market power," and if the Resolution were interpreted to not apply to customers who had already requested a switch, such a large-scale switch would have occurred. On its face, the Resolution contains ample evidence to support an interpretation that it does apply to proposed transfers noticed prior to the effective date, but which would not take effect until January 1, after the effective date.

While the wording of the Resolution did not explicitly state it was applicable to transfers already noticed, that hardly means that the Commission did not suspend such transfers. The portions of the Resolution noted above indicate that the Commission stated that the suspension should apply to any current transfer, such that the Commission likely did not find it necessary to specify what subset(s) of transfers to which it applied. One reason the Resolution did not explicitly state it applied to transfers already noticed is because it can easily be inferred from numerous statements in the Resolution that directed SoCalGas to "suspend transfers of customers to core subscription service," and such transfers to the new service had not yet occurred because service under the new rate schedules was not to commence until January 1, 2001.

Moreover, the Commission clearly possesses the authority to prevent transfers that otherwise would have gone into effect upon a customer's notice to change service. General Order 96-A, Article X provides a procedure under which no utility can deviate from tariff schedules "on file and in effect at the time, unless it first obtain the authorization of the Commission to carry out the terms of such contract, arrangement or deviation." (emphasis added) This was precisely what SoCalGas did in submitting the advice letter requesting that the Commission approve different service levels than those under which Tenby was requesting to receive service. The Commission ultimately rejected that request, but ordered SoCalGas to suspend transfers into core service and core subscription service, unless customers were without any service from their providers if they did not receive service from SoCalGas.

Additionally, tariff schedule GN-10, Special Condition No. 4 requires that customers sign a required natural gas service agreement. Per General Order 96-A, Article IX, all such agreements "shall contain substantially the following provision:

`This contract shall at all times be subject to such changes or modifications by the Public Utilities Commission of the State of California as said Commission may, from time to time, direct in the exercise of its jurisdiction.'"

Tenby's Master Services Contract with SoCalGas as of the time it desired to switch contains substantially such language. Tariff schedule No. GT-1, the tariff schedule under which Tenby was receiving service prior to requesting a switch, stated "[a]ll contracts, rates and conditions are subject to revision and modification as a result of Commission order." Thus, Tenby was at all times on notice that its request to switch service to a different tariff schedule and receive service via contract was subject to this Commission's authority, both by the tariff language in the schedule under which it was receiving service prior to requesting a switch, and the required language in any written contract it was required to sign before receiving service under the tariff into which it requested to switch.¹²

Tenby never discusses the explicit provisions in the Resolution mentioned above that directed SoCalGas to suspend "any" transfers to core service, nor offers any contrary interpretation of these provisions. In arguing that the Resolution did not invalidate Tenby's December 7, 2000, notice to switch regardless of whether the effective date of the new service was prior to or after the effective date of the Resolution, Tenby accepts that as of December 21, 2000, Tenby was not yet receiving its new, GN-10 service, which was to commence on January 1, 2001. A "notice to switch" is not equivalent to a switch itself. Instead, Tenby seems to assume that the Commission had to state explicitly that the Resolution applied to already-noticed transfers, and that by not making such an affirmative statement, the Commission intended not to do so. Such sophistry assumes that the Commission had to go out of its way to specify that it has the power to modify current tariffs, and that by ordering the suspension of any transfers the Commission had to specify that "any transfers" included transfers already noticed. As the Commission's General Order 96-A Article IX shows, the Commission possesses the authority to exercise its jurisdiction to direct changes to contracts and to issue conditions for eligibility of customers to particular tariff schedules. Tenby's interpretation of the Resolution unnecessarily restricts the Commission's powers to act in an emergency situation by requiring uncommonly specific language for such powers to be exercised.

Finally, Tenby does not lack a remedy against its natural gas service provider for any excessive charges Tenby incurred in procuring gas service in January, 2001. The circumstances that led to the extreme increase in the border price of gas in Southern California in late 2000 and early 2001 were already the subject of a complaint filed by this Commission at the Federal Energy Regulatory Commission ("FERC") against El Paso Natural Gas Co., FERC Docket RP00-241, in April, 2000. The Commission and numerous other parties, including representatives of all gas customers in California, have reached a settlement now pending at the FERC that resolves numerous claims against El Paso for illegally manipulating gas supplies in order to raise gas prices at the California border. In a recently-issued Order Instituting Rulemaking, R.03-07-008, the Commission notes that El Paso is providing more than $1.5 billion to resolve such litigation, and that non-core natural gas customers have the opportunity to participate in the claims process taking place in the United States District Court for the Central District of California "to establish their harm and receive a fair share of the consideration." (R.03-07-008, p. 4, 8)¹³

For these reasons, we deny the request to modify Resolution G-3304.

The last item of discussion is Tenby's request that the Commission address Tenby's data request to SoCalGas. Since today's decision denies both applications to clarify or modify Resolution G-3304, Tenby's data request to SoCalGas is moot.

¹³ Indeed, if this Commission were now to rule that Tenby was eligible to receive core service in January, 2001, it would slightly alter the throughput figures broken down by class that were utilized in reaching the proposed allocations in the settlement with El Paso.