5. Eight Specific Issues Identified in Scoping Memo

The Scoping Memo identifies eight specific issues upon which parties were asked to comment. We address each one in order.

5.1. Implementation

Parties offer a range of recommendations. PG&E proposes that logbook requirements be implemented through a Commission decision. SDG&E suggests they be implemented through the certification process for the maintenance program. Reliant advocates use of enforcement capability from FERC. DENA recommends generators prepare a compliance document. WCP and Elk Hills suggest using CAISO tariffs. Mirant recommends flexibility to recognize a range of existing record-keeping systems. CPSD proposes development of a GO. We adopt several of these recommendations.

5.1.1. Compliance Document

We adopt PG&E's recommendation to accomplish implementation and enforcement through this decision. No party proposes the specific form and wording of a GO. We may in a companion or subsequent decision adopt a GO to implement and enforce some or all of the Committee's adopted Standards, but decline to develop or adopt one for this decision.

We also adopt DENA's proposal to use a compliance document, and Mirant's proposal to permit reasonable flexibility. Parties report there are many ways to establish and maintain logbooks, along with the information specified in the Logbook Standards. Further, parties report that they do not necessarily use the same methods at present. We accept Mirant's assertion that it would be unreasonably burdensome to impose new rules requiring companies to immediately make substantial changes to current procedures and systems, or duplicate existing systems by recording data in a Control Operator Log that is currently captured and maintained elsewhere. Use of a compliance document minimizes the burden on electricity generators, while ensuring that we may fulfill our responsibilities to implement the law.

As a result, our focus at this time is on whether the information is kept and is available, not the particular format. The compliance document should show where data required by the Logbook Standards is recorded and maintained for each facility. For example, DENA says that dispatch instructions from the CAISO are recorded in the CAISO-required Data Processing Gateway unit and the unit operator manually records material deviations. The compliance document would identify or "map" the location of this data.

As well as identifying the location of the data, the compliance document should show how the information is recorded and maintained (e.g., electronic format or hard copy). That is, information may not only be recorded in different places at different facilities, it might be recorded in electronic form at some units, but manually at other units. As users of the compliance document (e.g., Commission staff or other authorized personnel) go from unit to unit, this information will assist in locating and understanding the data. The compliance document should also state any other format or presentation protocols that must be understood to decipher the meaning of the data. Finally, the compliance document should state anything else reasonably necessary to fulfill or demonstrate compliance with Logbook Standards.

Mirant points out that Commission implementation and enforcement should recognize that not all facility operators have access to all the data specified in the Logbook Standards. For example, many plant Control Operators do not communicate with the CAISO because the CAISO communicates with the scheduling coordinator responsible for plant dispatch. To the extent the communication is not with the Control Operator, we conclude that the Operator need only log that the data is unavailable.

SDG&E recommends that utilities have the discretion to seek Commission approval of their Logbook Standards implementation approach as part of the certification process for their Maintenance Standards. We may solicit further suggestions from parties on the details of whether and how to implement such an approach. Another approach is needed now, however. We will use the compliance document. We address other immediate implementation issues below as part of enforcement.

5.1.2. Use of FERC or CAISO Tariffs

Reliant, WCP, and Elk Hills recommended that we implement Logbook Standards through FERC and/or CAISO tariffs.25 As discussed above, we shall seek a coordinated and collaborative state and federal enforcement of these standards. The Legislature directed that the Committee adopt standards, and that those standards be implemented and enforced by the Commission. We generally endorse the recommendation of Elk Hills and others that Committee-adopted standards be implemented in ways that "minimize the potential for federal/state jurisdictional conflicts with respect to the implementation and enforcement of Section 761.3 of the Public Utilities Code." (Elk Hills Reply Comments, April 14, 003, page 2.) Toward this end, we shall forward the standards that we adopt in this Decision, and in all related current and future decisions that implement generator maintenance and operation standards, to the ISO with a request that the ISO submit these adopted standards to FERC for approval as amendments to the ISO's tariff. However, we take this action solely in a spirit of cooperation and comity. As we noted above, it is desirable for all concerned that there not be conflicting sets of rules that serve different regulatory purposes, but that may address closely related subjects, in this case, those relating to generator maintenance and operation activities. We emphasize, however, that by this action, we do not, nor do we intend to, concede or limit any authority of the State of California, either directly or indirectly.

5.2. Common Format

No party but CPSD supports adoption of a common logbook format. No party makes a specific common format proposal that might now be adopted.

CPSD asserts that with more than 250 generating sites in California, a common logbook format will speed future staff analysis and audits. CPSD also states, however, that at this time it is more important for generators to keep logbooks than that they use the same format. CPSD proposes that the Commission postpone adoption of a common format until staff has had time to develop and propose a common format.

We adopt the unanimous recommendation that no common format be required at this time. We also agree with CPSD, however, that in the long run a common format will promote efficiency. We seek to have one proposed for our consideration.

In particular, a common format will assist us satisfy the findings and declarations expressed in the implementing legislation. For example, a common format will speed enforcement when necessary to determine whether events did or did not occur that jeopardize public health and safety. Also, a common format will promote consistent practices and procedures in the industry, which will ultimately promote public health and safety, effective and efficient operation and maintenance, and service reliability and adequacy.

Mirant and others contend that the Commission cannot impose a common format requirement when the Logbook Standards themselves do not impose formatting requirements, but allow facility owners flexibility (e.g., logbooks may be maintained in either hard copy or electronic format or both). To the contrary, the Commission's role is implementation and enforcement. (§ 761.3(a).) In that role, the Commission may consider whether or not to implement and enforce adopted standards in any particular or specific way. A common format is an element of implementation and will assist in enforcement. The Commission might, for example, adopt a common format for the data a generator keeps in hard copy form and a separate common format for the data that a generator keeps in electronic form.

Respondents, with staff assistance (to the extent staff resources permit), should develop a common logbook format proposal. The proposal should be filed and served as an application within 12 months of the date this decision is mailed.26 The proposal should include a cost-effectiveness assessment (of whether or not to adopt and implement a common format), a proposed common format (for Commission consideration), and an implementation schedule for a common format (if one is adopted).27 In this way, generators themselves can have the most input on whether and how to develop, implement and enforce a common format that promotes California's interests while minimizing the costs and burdens on both the Commission and generators. We encourage one respondent to take the lead to coordinate efforts, draft the application, make the filing and perform service. Respondents should file a motion for a ruling by the Administrative Law Judge (ALJ) handing Logbook Standards to select one respondent to take the lead if respondents are unable to select one among themselves.

If respondents are unable to develop a common format for all Logbook Standards data for all generators, respondents should propose a common format for as much data as reasonably possible for as many generators as possible. The application should also include a recommendation regarding any additional procedural steps that respondents believe may be required for satisfactory Commission consideration of the issue (e.g., if one or more respondents wish to file and serve an alternative cost-effectiveness analysis or common format proposal, the filing should propose this procedural step). Applicants should also include anything else reasonably necessary for the Commission to make an informed decision.

5.3. Electronic Copy Available in "Real Time"

No party recommends that an electronic copy of logbooks now be required to be available in real time on a remote basis (e.g., by password protected web site).28 We agree. Rather, the existing logbook requirement is sufficient: all logbook "information must be readily available to operators, California Public Utilities Commission staff, and other authorized personnel at all times." (Attachment A, page 2.)

5.4. Enforcement

Issue: How should the Commission enforce logbook requirements?

We will enforce Logbook Standards through the compliance document. DENA recommends that respondents be provided 90 days, at a minimum, to develop and submit this document. Mirant concurs, saying owners should be given at least 90 days before being required to submit data responses to the CAISO or Commission regarding logbook data. We agree with this approach, but reduce the number of days to 30.

The compliance document is to show how the data "required under the Logbook Standards is collected, recorded and maintained [by a generator] through the course of its ordinary business practices." (DENA Comments dated April 8, 2003, page 3.) Preparation of the compliance document should not involve the development of new data collection or business practices. Generators should be able to document existing data collection and maintenance within 30 days.29

As a result, each electric corporation and generation facility subject to § 761.3(a) should, within 30 days of the date this order is mailed, prepare a compliance document. The compliance document does not need to be filed with the Commission, but must be prepared and maintained by the facility. Not filing

the compliance document will reduce administrative burden on the facility and staff. Nonetheless, it must be available to staff upon request (e.g., an on-site inspection, oral request, written request).

Each electric corporation and generation facility subject to § 761.3(a) should, however, within 30 days of the date this order is mailed, file a verified statement. The statement should confirm that:

The filing should be made with the CPSD Director, not the Docket Office. Unless otherwise ordered in a particular case, the verified statement will not be accepted for filing by the Commission's Docket Office, and will not be retained in the formal files for this proceeding. Rather, filing of the verified statement will be part of the ongoing administrative and regulatory responsibilities of CPSD. Only one original verified statement needs to be filed with the CPSD Director. No copies need to be served on the service list, and, as a result, no certificate of service is required.30

The verified statement needs to be filed only once. A sample verified statement is contained in Attachment B.

Further, we limit preparation of thermal logbooks, preparation of the compliance document, and the filing of a verified statement to thermal facilities that are 50 megawatts (MW) and larger. We do this because we seek to focus on the largest and most important facilities serving California load as the program is initially implemented and enforced. This limit reasonably balances the administrative burden on facilities, the industry and the Commission against the need to ensure public health, public safety, service reliability and adequacy. Changes to this limit, if any, may be considered in the future by decision, resolution or other appropriate means.

No party proposes a specific enforcement mechanism for our consideration at this time regarding Thermal Logbook Standards (e.g., schedule of fines, GO language). As a result, we rely on existing enforcement authority (e.g., §§ 2100 et seq.). Since this order includes EWGs, our enforcement extends to EWGs. (See, for example, §§ 2110, 2111, 2112, 2113, 2114.) While we decline to adopt any program-specific mechanisms at this time, parties may recommend more specific mechanisms in comments on the proposed GO.31

We must briefly address two other recommended enforcement approaches. First, as noted above, Reliant, WCP, and others recommended that we would rely exclusively on FERC and CAISO tariffs to enforce the stamndards adopted by the Committee. As already noted above, in order to encourage a collaborate state-federal approach to dealing with our complementary respective regulatory purposes, we shall forward the standards that we adopt in this Decision, and in all related current and future decisions that implement generator maintenance and operation standards, to the ISO with a request that the ISO submit these adopted standards to FERC for approval as amendments to the ISO's tariff. However, our determination to seek to implement a collaborative enforcement approach with the ISO and FERC does not mean that we should exclusively rely upon them for the enforcement of the Committee-adopted standards.

Finally, we decline to adopt SDG&E's recommendation to allow utilities the opportunity to employ Performance Based Ratemaking (PBR) to implement and enforce compliance with Logbook Standards. Only SDG&E recommends use of PBR. According to SDG&E, however, it does not own any generation facilities or powerplants now subject to Committee-adopted Standards. Other utilities, such as PG&E and SCE, do not request the option to apply for PBR. The use of PBR for this purpose is, therefore, essentially moot, at least for now.

5.5. Public Utility Status

We generally agree with Mirant and others that Logbook Standards should be applied on a uniform, fair and nondiscriminatory manner to all thermal facilities subject to § 761.3. For the reasons stated above, we apply Logbook Standards to all "facilities for the generation of electric energy owned by an electrical corporation or located in the state to ensure their reliable operation." (§ 761.3(a).) Covered plants include those owned by EWGs. Plants that are not covered are limited and specific (e.g., nuclear, QFs, self-generation, publicly owned, incidental to water provision or wastewater treatment, owned by a city and county public utility). (§§ 761.3(d) and (h).) Moreover, Logbook Standards apply on a nondiscriminatory basis to all facilities covered by the law, whether or not the owner or operator is named as a respondent in this proceeding.

5.6. Changes

We agree with the recommendations of PG&E, DENA, and others, that changes should be handled in a fair and open process, after notice and opportunity for comment, with a reasonable period for implementation and enforcement of adopted changes. Depending upon the change and when it occurs, this may or may not require the opening (or reopening) of a formal proceeding. We decline, for the reasons stated above, to adopt the recommendation of WCP and others to implement changes through modifications to CAISO tariffs.

Parties also address whether or not the Commission may implement changes only if first initiated by the Committee. We need not identify, or limit, all the ways in which changes might occur, but we note three. First, all parties agree that changes might result from revisions adopted by the Committee and submitted by the Committee to the Commission for implementation and enforcement. Second, a party might file a petition for modification of a Commission decision. Third, the Commission might initiate a change in a Commission decision after notice and opportunity for comment. (§ 1708.)

We decline at this time to adopt SDG&E's proposal to implement changes in Logbook Standards through the biennial re-certification of the Maintenance Program, so as to not impose additional complications on Maintenance Program implementation and enforcement. Nonetheless, we welcome further suggestions from parties as implementation and enforcement of Maintenance Standards are more fully developed.

Some parties contend that Commission implementation and enforcement must cease when the Committee sunsets on December 31, 2004. (§ 761.3(b)(3).) We disagree. The law provides that specific things must be accomplished by December 31, 2004: (a) the Commission and the CAISO shall jointly establish the Committee; (b) the Committee shall adopt and may thereafter revise standards for operations and maintenance; and (c) the Commission and the CAISO shall support the Committee with a reasonable amount of staff time. (§§ 761.3(b)(1) and (2).) The provisions in "this subdivision [i.e., in § 761.3(b)] shall be operative only until January 1, 2005." (§ 761.3(b)(3).) No other provisions of § 761.3 sunset on December 31, 2004.

That is, nothing in the law states or requires that Committee-adopted operations and maintenance standards terminate on December 31, 2004, even if the Committee expires. Nothing terminates Commission implementation and enforcement (i.e., there is no sunset provision to § 761.3(a)).

Moreover, we note that once the Commission decides a matter, it becomes a Commission decision and is subject to the Commission's interpretation, implementation and enforcement. This applies to matters as potentially complex and enduring as a settlement (wherein one might argue that complicated items have been "decided" by parties at a point in time to last for the duration of the settlement with the matter to be implemented as intended by parties, not as interpreted as the Commission).32 It also applies to other matters decided by the Commission. No less than a settlement or other matters, this includes Commission adoption of Committee Standards for the purpose of implementation and enforcement.

A decision that is operative for many years may periodically need to be interpreted or amended. We expect parties to seek reasonably necessary clarifications of, or changes to, adopted standards by referring them back to the Committee during the life of the Committee.

We see no merit in the argument presented by Mirant and others, however, that "the only reasonable interpretation of the sunset requirement is that all Committee-adopted standards in effect at the time must cease to be effective [when the Committee sunsets on December 31, 2004]." (Comments on Draft Decision, November 18, 2003, page 13.) There is no compelling reason to believe the Legislature intended for the expenditure of limited resources by respondents, parties, the Committee, the CAISO, the Commission-and potentially the courts-to develop, implement and enforce reasonably complex operations and maintenance standards that would apply for a period of only about two years.33 While the Legislature did provide that some provisions sunset on December 31, 2004, those provisions involve the Committee but neither involve the standards themselves nor Commission implementation and enforcement.

Mirant and others correctly assert that the standards have the potential to become obsolete or unworkable over time. The State is not powerless to respond, however. The State need not simply abandon adopted standards. Nor must the State simply continue to implement and enforce unworkable standards. Rather, implementation and enforcement remains before the Commission. If standards become obsolete or unworkable, parties may propose that the Commission make reasonable changes, so that Commission implementation and enforcement remains reasonable. Most importantly, "to the extent the [matter] requires interpretation after it is adopted in a Commission decision, it is the Commission's interpretation that prevails." (D.88-12-083 (30 CPUC2d 189, 226.) This includes adopted standards as well as their implementation and enforcement.

Thus, no time limit controls two of the three methods for future changes to Commission implementation and enforcement: a party may submit a petition for modification, or the Commission might initiate its own change at any time. Similarly, depending upon the outcome of our Maintenance Program implementation and enforcement, we may or may not later adopt SDG&E's proposal to implement changes in Logbook Standards through Maintenance Program re-certifications.

5.7. Specific Recommendations

The issues of a decision or GO, and specific language, are addressed above. Nothing further is proposed by parties, or needs to be addressed.

5.8. Other: Confidentiality

Reliant raises the issue of confidentiality, noting that Logbook Standards require the recording of individuals' names. This and other personal information is inappropriate for a public document, according to Reliant. Elk Hills agrees, recommending more generally that commercially sensitive information must be protected. Elk Hills proposes that the Commission adopt a presumption that logbook information is commercially sensitive and will not be disseminated unless expressly authorized by the party submitting the data.

This concern is largely made moot by our adopted approach. That is, the verified statement will contain no confidential information, and, in any event, need not be served.

Moreover, logbooks themselves need not be filed or served. Rather, they must be "readily available to ...Commission staff, and other authorized personnel at all times." (Attachment A, page 2.)

Similarly, no comments directly address or convince us that the compliance document will present this concern. That is, the compliance document will map where and how data is recorded and maintained; it will not reveal the data itself. Further, the compliance document need not be filed or served. Should Commission staff seek a copy of the logbooks or compliance document, respondents may submit some or all to staff with a request that some or all be treated confidentially, with citation to appropriate authority for the requested confidential treatment.

25 WCP says it uses the term "CAISO tariff" for simplicity, but the standards could also be incorporated into a protocol or appendix to each generator's Participating Generator Agreement enforced through FERC, rather than the CAISO tariff. 26 The Commission seeks to complete quasi-legislative proceedings within 18 months of their initiation. (SB 960, Section 13.) The goal is to complete this proceeding by May 21, 2004. (February 19, 2003 Scoping Memo, page 3.) We seek to have all major elements of implementation and enforcement in place by May 2004. Recent legislation provides that we must complete certain matters within 18 months of the date of the Scoping Memo, subject to limited extensions. (Assembly Bill 1735, adding § 1701.5(a).) If applicable to this proceeding, the goal would be to complete this matter by about August 19, 2004. In either event, we are confident that allowing respondents 12 months (i.e., until early 2005) to develop a common format proposal for our consideration is not unreasonable. We do not provide this amount of time with an expectation that the proposal necessarily be complex and detailed. Rather, we provide the 12 months in recognition of the fact that, while consideration of a common format is important, there are many important matters currently underway. We also wish to make clear that by ordering further consideration of the matter we are not prejudging the outcome. An application by a respondent is an efficient procedural vehicle for further consideration of this matter after R.02-11-039 is closed, and can (at the appropriate time after reasonable further consideration based on proposals and recommendations of parties) result in adoption or rejection of a common format. 27 An application must also comply with other standard Commission requirements (e.g., applicant must "state in the application the proposed category for the proceeding, the need for hearing, the issues to be considered, and a proposed schedule [for the proceeding]." (Rule 6(a)(1).) 28 We understand that real time remote access to some of the required logbook data is available to the CAISO staff. Some parties recommend that Commission staff consider seeking access to this data, if and when necessary, through the CAISO. 29 Those unable to comply within 30 days may request an extension of time by letter to the Executive Director. (Rule 48(b).) The letter must be received at least three business days before the date for compliance. The letter must state convincing reasons why the extension should be granted. Absent such reasons, the request may be denied. Further, unless there are particularly compelling reasons to the contrary, the letter should state that there will be compliance by day 30 for all data which can be identified and included in the compliance document, with the request for extension limited to the subset of data which cannot be identified in the compliance document by the 30th day. 30 This filing requirement is similar to the one for annual reports. (See, for example, GO 65-A.) 31 By Ruling dated October 2, 2003, a proposed GO was filed and served for comment. A draft decision with a revised GO was filed and served for comment on February 27, 2004. 32 See, for example, D.88-12-083 (30 CPUC2d 189, 225-226) regarding the Commission's approval of a settlement agreement regarding the Diablo Canyon nuclear powerplant. 33 Section 761.3 (SB 39xx) became effective on August 8, 2002. Under the interpretation advocated by some parties, if the Committee had adopted standards to be effective on January 1, 2003, and if the standards expire on December 31, 2004, they would be effective for no more than 24 months.

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