Application of Recent Precedent
In order to stay true to our word, we should deny this Application. PG&E and CalPeak entered into a license agreement under GO 69-C, and pursuant to that agreement, PG&E allowed CalPeak to begin grading and other construction activities on utility property. The intent behind the transaction, and the work begun by CalPeak, indicate a permanent (or at least longer term) commitment than that anticipated by GO 69-C. This is not an appropriate use of GO 69-C. Now, after entering into a transaction that the parties intended to be long-term, and after acting consistently with that intent by authorizing construction, PG&E wishes to gain Section 851 approval.
Nevertheless, we will grant the Application. In the two decisions in which we so unequivocally stated our intention to deny applications such as this one, the intent was to create a disincentive for this type of behavior. In essence, we were warning utilities that they would not be rewarded for failure to comply with all applicable authorities, but instead they would be punished by having their applications (which presumably they desired) denied. In this case, that approach has not succeeded, for despite the clarity of our previous decisions, PG&E did not file this Application until June 25, 2001. More significantly, denial of the Application would not really punish PG&E, but rather would most directly harm CalPeak, and secondarily harm the residents of California who may benefit from the operation of the CalPeak facilities. In short, our duty to the utility customers of California indicates that we should grant, rather than deny the Application.
At the same time, however, ensuring compliance with Section 851 and other laws and regulations is also part of our duty to uphold the public interest. Accordingly, we are issuing an Order to Show Cause to PG&E as to why it should not be found to have violated Section 851 (and related Commission decisions), Rule 1, and GO 69-C, and why corresponding sanctions should not be imposed. PG&E will provide to ALJ Allen the documents identified in Appendix A within two weeks of the date of this order. A hearing, to be held not less than two weeks from the date of this order, will be scheduled by separate ALJ Ruling. The hearing will be held in conjunction with a similar hearing to be ordered in A.01-07-031. In order to ensure full development of the record, a representative from CalPeak with knowledge of the transactions shall attend the hearing.
This is an uncontested matter in which the decision grants the relief requested. Accordingly, pursuant to Section 311(g)(2) of the Public Utilities Code, the otherwise applicable 30-day period for public review and comment is being waived.14
1. California is currently experiencing an electricity crisis, and the Governor has declared a State of Emergency.
2. The Governor has issued Executive Order D-26-01, dated February 8, 2001, which determined that the energy supply emergency poses a threat to public health, safety, and welfare, and requires the siting of new powerplants that can be on-line to avoid electricity supply shortages this summer and next, and ordered State agencies to act expeditiously to accelerate the availability of new generation sources to the State.
3. Granting PG&E's Application would make additional electric generation sources available to the State.
4. PG&E has requested an exemption from the requirements of Public Utilities Code Section 851 pursuant to Public Utilities Code Section 853(b).
5. The scope of the exemption from Public Utilities Code Section 851 requested by PG&E is narrow, consisting of leases of designated land at three PG&E facilities to CalPeak.
6. CalPeak seeks to install a 49 megawatt combustion turbine peaking generation unit at each site.
7. Review and approval of the Application under Section 853(b) can be accomplished more quickly than review and approval of the Application under Section 851.
8. The Application was not protested.
9. PG&E permitted CalPeak to perform construction on PG&E property prior to approval of the Application.
1. Public Utilities Code Section 853(b) provides for the Commission to exempt a public utility from the requirements of Public Utilities Section 851, and to place terms, conditions, rules and/or requirements upon any such exemption.
2. Exempting the Application from the requirements of Public Utilities Code Section 851 is in the public interest.
3. By virtue of the exemption from approval under Section 853(b), CEQA is not applicable to this Application.
4. Construction on utility property as occurred here exceeds the scope of authority granted by GO 69-C.
5. It cannot be determined with certainty from the record whether or to what extent PG&E violated state law or Commission authorities.
6. Further proceedings are appropriate to determine if PG&E has violated state law or Commission authorities, and, if so, whether PG&E should be sanctioned.
7. This order should be effective immediately to allow for expeditious installation of new generation.
IT IS ORDERED that:
1. Pacific Gas & Electric Company's (PG&E) request for an exemption from the requirements of Public Utilities Code Section 851 is granted.
2. The scope of the exemption from Public Utilities Code Section 851 is limited to the utility sites, leasehold interests, and purposes described in the Application, as discussed above.
3. The Commission retains its authority over PG&E, PG&E property, and ratemaking treatment of the leases, as discussed above.
4. PG&E will provide the information requested in Appendix A to Administrative Law Judge (ALJ) Allen within two weeks of the date of this order.
5. PG&E will show cause why it should not be subject to sanctions for violation of Public Utilities Code Section 851, General Order 69-C, Rule 1, and the Commission decisions cited above.
6. A hearing on sanctions, in conjunction with a similar hearing in Application 01-07-031, will be scheduled (by separate ALJ Ruling) not less than two weeks from the date of this order.
7. This proceeding remains open.
This order is effective immediately.
Dated August 23, 2001, at San Francisco, California.
LORETTA M. LYNCH
President
HENRY M. DUQUE
CARL W. WOOD
GEOFFREY F. BROWN
Commissioners
I dissent.
/s/ Richard A. Bilas
Commissioner
APPENDIX A
The following information and documents are to be provided to ALJ Allen as directed in the attached decision:
1. All written correspondence, including electronic correspondence, between PG&E and CalPeak relating to the leases or facilities discussed in the attached decision. "CalPeak" is to be interpreted broadly, and include any affiliated, predecessor, subsidiary, or parent entity and its representatives.
2. All written correspondence, including electronic correspondence, between PG&E and any governmental agency or entity (other than the CPUC) relating to the leases or the CalPeak facilities discussed in the attached decision.
3. All notes or other documentation of meetings, telephone conversations, and other oral communications between PG&E and CalPeak relating to the leases or facilities discussed in the attached decision.
4. All notes or other documentation of meetings, telephone conversations, and other oral communications between PG&E and any governmental agency or entity (other than the CPUC) relating to the leases or the CalPeak facilities discussed in the attached decision.
5. All PG&E internal written correspondence, including notes, memos, and electronic correspondence relating to CalPeak, or the leases or the CalPeak facilities discussed in the attached decision.
6. All notes or other documentation of internal PG&E meetings, telephone conversations, and other oral communications relating to the leases or the CalPeak facilities discussed in the attached decision.
7. Any documents that would have been responsive to this request that have been destroyed shall be identified as completely as possible, and the document retention or destruction policy under which they were destroyed shall be provided.
8. Paper copies of electronic communications (such as e-mail) shall be provided.
(END OF APPENDIX A)
14 We could also reach the same result pursuant to Rule 77.7(f)(9) of the Commission's Rules of Practice and Procedure, based upon public necessity.
