IV. Summary of Parties' Positions

A. CPSD

CPSD believes that a utility violates a GO if it fails to comply with a GO's provisions. According to CPSD, Edison has been aware for a number of years of the GO provisions, since GO 95 has existed in some form since 1922 and GO 128 was issued in 1967. Therefore, Edison should not be able to develop its own interpretation, compliance standards, and corrective period for these GOs without Commission authorization. CPSD argues that the purpose of the GOs is to establish safety standards for utility distribution systems and that Edison should maintain its system to comply with these GOs.

CPSD alleges that Edison violated GO 95 on 4,044 occasions, GO 128 on 677 occasions, and GO 165 on 94 occasions. Additionally, CPSD alleges that Edison's violations of GO 95 and 128 were at least a factor in 37 accidents involving injury or property damage. CPSD also alleges that Edison committed two Rule 1 violations in presenting misleading statements regarding two accidents. CPSD believes it is not necessary to prove "intent to mislead" for the Commission to find a Rule 1 violation.

CPSD recommends the maximum penalty of $20,000 as provided for in Pub. Util. Code § 2107 for each of the GO 95, 128 and 165 violations, for each violation associated with each of the 37 accidents, and for two Rule 1 violations, for a total of $97,080,000. Although CPSD claims the violations are longstanding, it is willing to forgo seeking daily damages pursuant to Pub. Util. Code § 2108 because the exact period of noncompliance is difficult for CPSD to determine.

B. Edison

Edison argues it should not have to defend its electric line inspection and maintenance program before the Commission has had the opportunity to describe what it regards as reasonable conduct. Edison states that CPSD's proffered requirement that any noncompliance with the GOs is a violation that should be penalized is an unprecedented and counterproductive standard. Edison argues that this standard will not lead to a safer electric system but only to increased costs. Edison terms noncompliance with the GOs as a "nonconformance," and argues that a GO violation occurs only if Edison does not remedy the nonconformance during its prioritized maintenance program.

Edison states that it has taken a practical, cost-effective and safety-driven approach in compliance with the GOs. According to Edison, it prioritizes its financial and human resources to serve utility reliability and safety, and no system can, or should, be structured to prevent all nonconformances from occurring.

Edison believes that CPSD has juxtaposed incidents of Edison's GO nonconformance during the 37 accidents without proving that: (a) nonconformances existed; (b) the nonconformances caused the accident, or (c) a reasonable inspection program could have been expected to find and correct the problem before the accident happened. Edison also argues that CPSD's raw data of GO 95 and 128 nonconformances contained in its inspection reports did not demonstrate that the problems were excessive, nor did they shed light on the manner in which Edison manages its inspection and maintenance program. Edison charges that CPSD inspected the most vulnerable and problem-laden part of its system, and that the inspectors had inconsistent criteria and conservative definitions of GO compliance. Edison also disagrees with CPSD's interpretation of GO 165, believing that this GO only requires Edison to have specific intervals for various inspection categories and to report and track inspection results and resulting corrective action.

For the above reasons, Edison argues that penalties are not warranted. Alternatively, even if the Commission were to find a failure to comply with the GOs to be a violation, Edison does not believe penalties are in order because this would be a new Commission interpretation of the GOs of which Edison was unaware. Edison also argues that it did not violate Rule 1 because its personnel responded to CPSD's questions with the best available information at the time of the CPSD inquiries. According to Edison, CPSD must prove that Edison acted with intent, recklessness, or blameworthy conduct before the Commission can find a Rule 1 violation.

Edison argues that the OII raises legitimate issues that should be prospectively addressed through the rulemaking process. It recommends that the following issues be transferred either to the existing GO 95/128 Rulemaking (R.) 01-10-001, or another new generic proceeding:

· Development of a single set of GO 95 and 128 inspection methodologies;

· Standardization of CPSD and utility inspector training;

· Guidelines for establishing, evaluating and revising utility corrective action prioritization programs; and

· Criteria for prospectively determining when a utility may be penalized for failure to comply with its inspection and maintenance program requirements.