6. Discussion

In November 1967, through D.73078, the Commission ordered certain electric and telephone utilities, including SCE, to adopt a uniform Rule 20 to implement practices with respect to undergrounding facilities. Rule 20 was based on the conversion rules of Pacific Gas and Electric Company (PG&E) and San Diego Gas & Electric Company (SDG&E).

SCE states that when it adopted Rule 20 in place of its Schedule U, it also implemented the policy of PG&E and SDG&E of not charging an applicant for the cost of removing existing overhead facilities. SCE has submitted declarations showing that both PG&E and SDG&E changed their policies and also began charging for pole removal costs in 1995.

The purpose of the Commission's order in D.73078 was to encourage the location and relocation of electric and telephone facilities underground. The Commission stated:

"[T]he time had long passed when we could continue to ignore the need for more emphasis on aesthetic values in those new areas where natural beauty has remained relatively unspoiled or in established areas which have been victimized by man's handiwork." (67 CPUC2d at 490.)

This policy of encouraging underground utility facilities continues today, although the Commission has made changes to require those seeking conversion to bear more of the cost. In Re Line Extension Rules, D.97-12-098, the Commission approved a change in Rule 20.B.2.c to require applicants to pay the costs of transformers, meters, and services instead of excluding those costs. The Commission stated the following reason for ordering this and other changes:

"The Commission modifies the existing line and service extension rules and practices for gas and electric utilities in several ways that will reduce the amounts by which ratepayers already connected to the utility systems subsidize the costs caused by new ratepayers requiring new line and service extensions."

Based on the Commission order in D.97-12-098, SCE filed and obtained Commission approval of Advice 1309-E to change Rule 20.B.2.c to shift transformer, meter, and service costs to applicants.

SCE has not filed an advice letter to reflect its change in practice in charging applicants for pole removal costs. It asserts that no such filing is required by the law or by Commission rules so long as the change in practice conforms to the tariff.

We disagree.

Pub. Util. Code § 454 states in pertinent part:

"[N]o public utility shall change any rate or so alter any classification, contract, practice, or rule as to result in any new rate except upon a showing before the commission and a finding by the commission that the new rate is justified." (Emphasis added.)

More specifically, General Order (G.O.) 96-A provides that:

"The tariff schedules of a utility may not be changed whereby any rate or charge is increased, or any condition or classification changed so as to result in an increase, or any change made which will result in a lesser service or more restrictive conditions at the same rate or charge, until a showing has been made before the Commission and a finding by the Commission that such increase is justified." (G.O. 96-A, § VI; emphasis added.)

SCE insists that its change in policy is consistent with the language of Rule 20. Certainly, when the tariff language is considered as a whole--including the Rule 20.B.3 provision specifically addressing removal of overhead facilities--that interpretation appears valid. When determining whether there is ambiguity in a tariff, we are required to consider tariff language as a whole. (Re Southern California Utility Power Pool (1995) 60 CPUC2d 462, 471.) On the other hand, Rule 20.B.2.c does not address pole removal costs and, given the Commission's intent in D.73078 to encourage conversion to underground facilities, it was not unreasonable for SCE for 30 years to assume that it should bear the removal costs. It is settled law that an ambiguity in a tariff must be construed against the utility and in favor of the customer. (Order Denying Rehearing (1992) 45 CPUC2d 645.) To conclude otherwise would allow a utility, in practical effect, to increase its charges without Commission authorization. This would contravene Pub. Util. Code § 454, G.O. 96-A, and the rule of construction just cited that a tariff must be construed in favor of the customer.

The issue here, however, is not whether SCE's pole removal practice conforms to its tariffs. The issue is whether the change in that practice required prior Commission approval. We conclude that it did.

SCE argues that seeking approval of a change in practice without a change in tariff language would be tantamount to seeking an advisory opinion. The Commission generally does not issue advisory opinions. (Re San Diego Gas and Electric Company (1991) 42 CPUC2d 9.) Moreover, SCE states that if it filed an advice letter every time it changed a practice, the Commission would be inundated with filings.

We believe those contentions overstate the effect of our decision today. Our order is confined to the facts of this case. It finds that Barratt American has stated a valid complaint under G.O. 96-A. SCE should have sought Commission approval before changing a practice that had been in place for 30 years and that eliminated a substantial credit to applicants for underground conversion. Rather than seek an advisory opinion, SCE could have sought a change in tariff language to make its new practice clear and put conversion customers on notice that they no longer would get credit for costs of pole removal.

Accordingly, we find for complainant and require that SCE refund to Barratt American the $33,700 that SCE had assessed for pole removal.

The scope of this proceeding is set forth in the complaint and answer; by agreement of the parties, a hearing is not needed. Our order today confirms that ALJ Walker is the presiding officer.