I. INTRODUCTION

On January 19, 2005, the Southern California Edison Company (SCE), Pacific Gas & Electric Company (PG&E), the San Diego Gas & Electric Company (SDG&E), and the Southern California Gas Company (SoCalGas), collectively the "Applicants," filed applications seeking rehearing of Decision (D.) 04-12-056. The Commission adopted D.04-12-056 on December 16, 2004. In D.04-12-056, the Commission (1) prohibited the use of "reverse auctions" in energy utility construction contract bidding procedures (wherein bidders compete for contracts by lowering their bids until the lowest bid is accepted), and (2) required utilities to ensure the payment of prevailing wages by their construction contractors in all construction.

The Applicants raise three issues. First, the Applicants allege that they were deprived of due process because they were not afforded an adequate opportunity to be heard. Second, Applicants contend that absent their input, the decision is not supported by the evidence and is therefore arbitrary and capricious. Third, the Applicants allege that the Commission's authority to impose the prevailing wage requirement is preempted by federal labor law. In addition, SDG&E and SoCalGas' application for rehearing alleges that D.04-12-056 wrongly attempts to compel a "sister agency" to enforce the prevailing wages mandated by the Commission. No party challenged D.04-12-056 as it relates to reverse auctions.

We have carefully considered all the arguments presented by Applicants, and while SDG&E and SoCalGas identify a misstatement in the decision, we are of the opinion that no legal error has been demonstrated concerning the decision's conclusions. We will therefore modify D.04-12-056 to correct the misstatement, and deny rehearing of D.04-12-056 as modified.