II. FACTUAL BACKGROUND

In 2002, the Legislature passed Senate Bill No. 39XX ("SB 39XX") in response to the 2000-2001 energy crisis. (Stats. 2002, 2^nd Ex. Sess., Ch 19.) In enacting SB 39XX, the Legislature declared that electric generating facilities and powerplants in California "are essential facilities for maintaining and protecting the public health and safety of California residents and businesses." (SB 39XX, § 1(a).) The Legislature further declared that it is in the public interest "to ensure that electric generating facilities and powerplants are effectively and appropriately maintained and efficiently operated." (SB 39XX, § 1(b).) SB 39XX added section 761.3 to the Public Utilities Code.

Public Utilities section 761.3 (a) requires the Commission to implement and enforce standards for the maintenance and operation of electric generating facilities to ensure reliability, notwithstanding Public Utilities Code section 216(g), which declares that exempt wholesale generators ("EWGs") are not public utilities. Section 761.3 further provides that the Commission shall enforce protocols of the California Independent System Operator ("CAISO" or "ISO") for the scheduling of powerplant outages.

Section 761.3(b)(1) provides that the Commission and the ISO shall jointly establish the California Electricity Generation Facilities Standards Committee ("Committee"), and that the Committee shall consist of three members: one member of the Commission, one member of the ISO, and one individual with expertise regarding electric generation facilities. Section 761.3(b)(1) requires that the Committee, within 90 days of the effective date of the legislation, adopt and thereafter revise standards for the maintenance and operation of generation facilities. Section 761.3(b)(2) provides for staff support for the Committee. Section 761.3(b)(3) states that "[t]his subdivision shall be operative only until January 1, 2005."

Section 761.3(c) provides that nothing in section 761.3 authorizes the Commission to establish rates for wholesale sales in interstate commerce or to approve the sale or transfer of control of facilities that have been certified as EWGs by the Federal Energy Regulatory Commission. ("FERC").

In D.04-05-017 and D.04-05-018, the Commission adopted standards for electric generating facilities and powerplants located in California pursuant to Public Utilities Code section 761.3. In D.04-05-017, the Commission adopted Logbook Standards for thermal powerplants. In D.04-05-018, the Commission adopted GO 167, which contains rules for the implementation and enforcement of General Duty Standards and Maintenance Standards, and which provides for the enforcement of the Outage Coordination Protocol adopted by the CAISO.

Mirant, WPTF, and Elk Hills filed timely applications for rehearing of both decisions. In their rehearing applications, Mirant and WPTF allege, among other things, that various aspects of the decisions exceed the authority of the Commission under state law, violate state and federal constitutional provisions, and are preempted by federal law. Elk Hills alleges that the General Duty Standards are impermissibly vague and that the Commission erred in failing to adopt certain modifications to GO 167. No responses to the rehearing applications were filed.