FERC Primacy Over Transmission-Related Ratemaking

What is distinctive about this case is that the USOA is being applied to transmission-related property that may be subject to FERC's jurisdiction-not to local utility property over which we unquestionably have jurisdiction. As this property is transmission-related, determinations we might make as to the allocation of proceeds from the sale of the assets might potentially interfere with FERC's transmission ratemaking authority and procedures. The converse is also true: FERC, through its adoption of the USOA, cannot prescribe accounting determinations that bind us in rate proceedings involving local utility operations.

If FERC does have jurisdiction over the "gain-on-sale" proceeds from transmission-related assets, ORA and other PG&E ratepayers would appear

to have some remedies before that agency to address these allocation issues. FERC requires that PG&E report the accounting treatment of such "gain-on-sale" proceeds, at least in gross numbers, in Form 1 (p. 117), Annual Report of Major Electric Utilities, Licensees and Others.²⁵ The FERC Chief Accountant may challenge PG&E's accounting treatment or the accounting may be taken up in a rate proceeding involving PG&E's transmission rates. A ratepayer or any third party may file a complaint against PG&E with FERC under Section 306 of the Federal Power Act.²⁶ In such FERC proceedings, ratepayers might argue that the "gain on sale" proceeds should be divided and assigned based on the time the property was within the rate base subject to our jurisdiction as compared to the time the property has been within the FERC-administered transmission rate base. The stipulated facts here, however, do not address this issue; and, as we have previously mentioned, we do not decide these jurisdictional and "gain-on-sale" allocation issues here. We do, however, encourage the reopening of this proceeding to apply the results of our anticipated rulemaking on Section 851 issues to the questions deferred in this proceeding.