COM/MP1/RSK/acb Mailed May 27, 2005
Decision 05-05-048 May 26, 2005
BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA
Almond Tree Hulling Co.; Arakelian Farms; Baugher Ranch; Beretta Property Management; Campos Brothers Farms; Central California Almond Growers Association; Central Valley Almond Association, Inc.; CF Koehen & Sons, Inc.; Dairyland Hullers; Farmers Cooperative; Harriet Baldwin; Harris-Woolf Almond Huller; Hashem Naraghi; Hilltop Circle L. Ranch; James M. Paiva; James R. Lewis Orchards Inc.; John Wynn; Mintum Almond Coop, Inc.; North State Hulling Co-op, Inc.; Pacific Almond Co.; Paramount Farms, Inc.; Paramount Farming Company; Parreira Almond Processing Co.; Peter D. Peterson; Stewart and Jasper Orchards; South Valley Farms; Strain Orchards; The Hulling Company; TM Duche Nut Co. Inc.; Vernon Paddack; West Valley Hulling/Barry Baker; Xcel Shelling, LLC., Complainants, vs. Pacific Gas and Electric Company and DOES 1 through 100, Defendant. |
Case No. 04-01-020 (Filed January 21, 2004) |
Paul G. Kerkorian, Attorney at Law,
Utility Cost Management, Inc. for Complainants.
Daniel F. Cooley, Attorney at Law, for
Pacific Gas and Electric Company, Defendant
Introduction
In this case, we are called upon to decide whether a group of 32 almond hullers/shellers located within the service territory of defendant Pacific Gas and Electric Company (PG&E) are required to take electric service from PG&E under commercial rates, or are entitled to service at the lower agricultural rates PG&E offers pursuant to § 744 of the Public Utilities Code. This requires us to construe the eligibility criterion for PG&E's agricultural tariff, which states in pertinent part:
"A customer will be served under this schedule if 70 percent or more of the energy use is for agricultural end-uses. Agricultural end-uses include growing crops, raising livestock, pumping water for agricultural irrigation, or other uses which involve production for sale, and which do not change the form of the agricultural product." (Emphasis added.)
Since there is no real dispute that complainants satisfy the other eligibility conditions, the controlling issue in this case is whether the hulling and shelling process changes the form of the agricultural product-the almond. PG&E contends that the hulling and shelling process changes the form of the unhulled almond, which PG&E believes is the agricultural product. Complainants, on the other hand, contend that no change in form occurs, because the hulling and shelling process simply removes "extraneous plant material" while leaving the almond intact-thereby preserving its form.
On October 25, 2004, the Presiding Officer's Decision (POD), prepared by Administrative Law Judge Myra J. Prestidge, was mailed to parties. The POD denied the complainants request to be included under PG&E's agricultural tariff rates for their hulling/shelling operations. The POD found that the unhulled almond consists of three distinct agricultural products-the hull, the shell and the almond (or almond meat)-and that the removal of the hulls and shells constitutes a change in the form of the agricultural product making the hulling/shelling process ineligible for more favorable agricultural tariff rates. The POD was subsequently appealed by the complainants on the basis that hulls and shells are agricultural residues and their removal does not alter the agricultural product-the almond itself.
After careful consideration of this matter, we accept the complainants appeal. We conclude that (1) the agricultural product is the almond itself, and not the hull or shell, and (2) the removal of the hulls and shells from the almond does not constitute a "change of form" within the meaning of PG&E's eligibility statement. Thus, the complainants are entitled to service under PG&E's agricultural tariff.
As a consequence of this decision, complainants are entitled to a refund of the difference between what they have been billed for hulling/shelling under PG&E's commercial tariffs since the Fall of 2003 (when they first asked to be billed at agricultural rates) and what they would have been billed for the hulling/shelling under PG&E's agricultural tariffs.
