5. Changes to the General Rules

In addition to solidifying the details of internal administration for GO 96-B, we have developed several important refinements to the General Rules and the respective Industry Rules, as they were set forth in the order instituting this rulemaking. Sections 5.1 to 5.11 describe the principal additions and modifications to the General Rules.

We have changed General Rules 5.1, 5.2, and 7.2, as originally proposed, to clarify the provisions we made for advice letter requests to modify a Commission order. We need to distinguish those Commission orders that are subject to modification through an advice letter from those that are not. If the order in question was issued in a formal proceeding, then the request must also be made formally (typically, through a petition for modification or a new application). If, however, the order was a resolution disposing of a prior advice letter, we believe the resolution in general should be subject to modification through the same informal procedure, so long as proper notice is given.19 Thus, to make this distinction explicit, we clarify our General Rules on (1) matters appropriate to advice letters and matters appropriate to formal proceedings; and (2) requirements for serving advice letters.

The Industry Divisions all require that an advice letter have a cover sheet and specific contents. We conclude that these subjects deserve inclusion in the General Rules. Thus, we propose today to add General Rule 5.5, requiring a utility to submit and serve a cover sheet with its advice letter, and General Rule 5.6, setting forth broadly applicable content requirements.

The cover sheet will concisely summarize all critical information about a given advice letter, such as the designated tier, the affected product or service, the magnitude of any rate change, the legal authority on which the utility relies, referral to other pending advice letters that might affect the same tariffs, and information for contacting the utility. The cover sheet should be helpful to everyone concerned with advice letter procedure. The utility can use the cover sheet as a check list to help ensure that a given advice letter is complete and logically assembled. The Industry Division and other reviewers can use the cover sheet to identify issues, assign personnel, and set internal schedules and priorities. In essence, the cover sheet is the road map for a given advice letter, analogous to the "scoping memo" that we use in formal proceedings. Neither the cover sheet nor any of the information contained in the cover sheet may be treated as confidential under General Rule 9. (See also Section 5.9.)

Similarly, the content requirements eliminate guesswork for the utility preparing an advice letter, help ensure that the advice letter is complete and easy to review, and limit the need for information requests after the advice letter is submitted. Both the cover sheet and the content requirements are calculated to enable effective review of advice letters within the tight timeframes available.

We propose in General Rule 7.5.1 to allow a utility to modify its advice letter or accompanying tariff by submitting a supplement and serving the supplement on everyone that received the original advice letter. We also propose to abolish the alternative modification method referred to as a "slip sheet" or "substitute sheet."

Historically, a substitute sheet was used to make corrections purported to be nonsubstantive. Because the utility was not always required to serve a substitute sheet, people affected by the tariff change did not always receive the final text of the proposed new or revised tariff before its approval. Also, substitute sheets were often identified only by an asterisk, leading to confusion even after approval.

Because the language of a tariff controls the terms and conditions of service provided under the tariff, any confusion about the text of the tariff is intolerable. Indeed, one of the main goals of this proceeding is to ensure that everyone concerned (utility, customers, and Industry Division staff) can determine quickly and without mystery the text of any given tariff as in effect at any given time. Our historic practice regarding substitute sheets is inconsistent with that goal.

In contrast, advice letter supplements are both served and identified by letter suffix. Their exclusive use to modify advice letters will enhance the review process and better track the text of proposed and approved tariffs. Since we allow both advice letters and advice letter supplements to be served electronically, eliminating substitute sheets will not impose significant additional burden on utilities. Moreover, under proposed General Rule 7.5, revisions that are truly minor will not extend the protest period or delay the effective date of the advice letter, and in those situations where comment on the revision is appropriate, the scope of such comment will be confined to the substance of the revision.

How and when the reviewing Industry Division may obtain additional information from a utility about its advice letter is the subject of proposed new General Rule 7.5.2. To explain this proposal, we first discuss the role of supporting data and information gathering in the advice letter process.

The advice letter process is intentionally informal. Applications and other formal proceedings provide the forum for matters involving hearings, an evidentiary record, and disputed material facts. Advice letters, in contrast, should rarely involve extensive data gathering.20 Also, a utility should ensure that its advice letter includes all necessary supporting data when submitting the advice letter; otherwise, staff cannot be expected to complete review of the advice letter within the tight timeframes available.

On occasion, on the basis of staff's own review or of a protest, staff may find that narrowly defined additional information is needed for disposition of an advice letter. In that situation, staff should simply request the information from the utility rather than disapprove the advice letter.

New General Rule 7.5.2 will apply the policies outlined above. Instead of prescribing a detailed discovery process, we allow staff and the utility to work out particular arrangements for production of information. If a material fact remains in dispute after reasonable efforts to resolve it, General Rule 5.4 provides two options: Either the utility can withdraw the advice letter,21 or the reviewing Industry Division can reject it without prejudice to its refiling as a formal proceeding. If staff believes determination of all material facts can be made on the basis of information provided by the utility, staff will prepare a disposition pursuant to General Rule 7.6.1 or 7.6.2, as appropriate.

In our original rulemaking proposal, General Rule 7.5.3 ("Advice Letters Effective Pending Disposition") contained provisions for a penalty of $500 per day if a utility that submitted an advice letter effective pending disposition failed to correct or revise the advice letter after being notified by the reviewing Industry Division of a defect in the advice letter. After reviewing the comments, we have decided to modify this General Rule. The essential message we want to convey is that the utility conduct the General Rule describes is sanctionable by the Commission. Whether and what sanctions are imposed will depend on the facts of the particular case. The specificity in our original proposal has caused commenters to assume that the specified sanction will always be imposed, and that only this sanction will be imposed. Neither assumption is correct, and we have modified the sanction provision to make it more general and to better convey our essential message.

In our original rulemaking proposal, we said in General Rule 7.6.1 that the reviewing Industry Division did not need to make a written disposition in granting an unprotested advice letter-the disposition would simply be reported at the Commission's Internet site. In essence, this provision allowed an advice letter to be deemed approved in these circumstances. To make the provision explicit, and to clarify the timing of approval, we now propose to add a new paragraph to General Rule 7.6.1. We have also greatly expanded General Rule 7.3 from our original proposal. In this rule, we intend to cover all the permutations of how and when an advice letter may become effective.

In our original rulemaking proposal, General Rule 8.2 ("Serving Under Tariffs") said that utilities must serve their California customers only pursuant to tariff terms and conditions,22 and that ambiguities in a tariff would be construed against the utility. Both statements are boilerplate of public utility law, and are still sound. However, we propose to add provisions to General Rule 8.2 to better address contemporary conditions in the utility industries.

First, we will require utility representations, for example in ads regarding a tariffed service, to be consistent with the terms and conditions of the applicable tariff(s). Most consumers rely on the utility's service representative or advertising for information about service choices, and we suspect that few consumers, now or historically, read the underlying tariffs before arranging for service. Thus, consumer protection requires ensuring that utilities accurately describe their tariffed services in all their representations to the public. The utility must bear the duty of ensuring such accuracy, which naturally complements the utility's long-standing duty to ensure that the tariffs themselves are clear and unambiguous.

Second, we will require a utility's tariffs to identify optional features as such, to disclose alternative means (such as different rate plans) of obtaining a particular service, and in both cases to specify the means by which the customer chooses.23 Choices are good from the customer's perspective (in that they enable a better fit between the customer's needs and the services selected to meet those needs), but they complicate tariff drafting, as compared to traditional, "one-size-fits-all" service. For example, several different tariffs may have to be cross-referenced, depending on the range of choices the customer is offered. Our proposed requirement is intended to help ensure that tariffs fully and readily disclose information a customer would need in deciding between service options.

Some commenters have proposed standards for clarity of tariffs. We endorse the goal of writing tariffs that are understandable to consumers, but we think there are many problems in adopting a specific standard. Is the utility to assume an "average" consumer? Does such an assumption make sense in connection with a tariff for a technically complex business or industrial service? Is the utility required to render a complex legal requirement into language understandable to, say, an eighth grade reader? If a utility wants to write its new tariffs in plainer English, what should the utility do about its hundreds of pages of existing tariffs, which cannot be revised overnight? These are hard questions that go beyond the scope of this rulemaking. For present purposes, we affirm our historical approach to tariff content. That approach, as reflected in proposed General Rule 8.2, is to require that the utility provide comprehensive tariffs and bear the risk of any tariff ambiguity.

As discussed earlier, we have decided to make Internet publication of tariffs a requirement for utilities whose gross intrastate revenues exceed $10 million. At the same time, for any utility so publishing its tariffs, we are relaxing the requirement to maintain tariffs for public inspection at utility offices. For all utilities, a caller may obtain tariff information or order copies by telephone. (See General Rules 8.1 to 8.1.3.) Finally, we have added a statement explaining our purpose in requiring utilities to compile and publish the tariffs under which they serve their California customers. (See General Rule 8.1.1.)

The premise for all of these requirements is that public access to tariffs is vital as long as utility service continues to depend, generally or to any significant extent, on filed tariffs. Meaningful public access requires that an interested person be able to determine (1) the tariffs in effect, the tariffs that would be affected by pending advice letters, and the tariffs that are no longer in effect, and (2) the tariffs that govern (or formerly governed) the provision of a particular product or service at a particular time. We have crafted General Rules 8.1 to 8.1.3 with these public access goals in mind.

In our original rulemaking proposal, we provided in General Rule 9 for treatment of material asserted to be confidential. The rule said, in part, that an advice letter could not be effective pending disposition if the utility submitting the advice letter requested it to be treated as confidential in whole or part. We continue to be very concerned, for reasons discussed in Section 3.1, that advice letters effective pending disposition receive due scrutiny. However, after reviewing comments on General Rule 9, we believe our original proposal can be liberalized. Today we propose that a utility may request confidential treatment for parts of an advice letter effective pending disposition, but only if the utility concurrently provides access to the entire advice letter to those persons on the utility's advice letter service list who have executed a reasonable nondisclosure agreement for purposes of advice letter review.24

In lieu of individually negotiated contracts, a utility's tariffs systematically describe its services, products, and relationships with its customers. Any interested person, including a current, former, or potential customer, should be able to determine the applicable tariffs currently in effect, or in effect as of a particular date, for a particular utility. A logical system of tariff sheet numbering is helpful in making such determinations; however, the existing GO 96-A numbering system is incomplete. We propose several improvements to better accommodate revising existing sheets, inserting additional sheets, and keeping track of these changes.25

The crux of the numbering system was, and will continue to be, consecutive numbering, starting with tariff sheet 1.26 When a utility starts operations, consecutive numbering presents few difficulties, but this pristine condition does not last long. For example, the utility may need to revise the content of a particular sheet. Under GO 96-A, the utility may replace Original Sheet 5 with a differently numbered Revised Sheet; we propose, instead, that an Original Sheet 5 be replaced by a Revised Sheet bearing the same number, so that Original Sheet 5 is replaced by 1st Revised Sheet 5, and then by 2nd Revised Sheet 5, and so on.

Another confusion arises when a utility needs to add new sheets, especially when these new sheets relate to an existing service. GO 96-A does not clearly say how the utility is to insert and number new sheets when they should go between its current tariff sheets, so that all the sheets setting forth a given product or service are kept together in logical order. We propose that the utility maintain subject matter cohesion by inserting new sheets, using a decimal numbering system where appropriate. For example, the utility will insert Sheets 5.1, 5.2, and so on, following Sheet 5; and if need arises, Sheets 5.1.1, 5.1.2, and so on will be inserted following Sheet 5.1.27

GO 96-A requires only a Table of Contents covering all of a utility's tariffs; for many utilities, whose tariffs may run to several shelf feet, such a table is unwieldy. We propose, in addition, that a utility include a "check sheet" with each of the utility's tariff schedules, and each of its bound volumes. The check sheet would list all the effective tariff sheets, by page and revision number, for that schedule or bound volume.

All utilities starting operations after the effective date of GO 96-B must number their tariff sheets consistent with the improved system described above. Telecommunications utilities that file tariffs in compliance with the FCC system are already in compliance with the GO 96-B tariff sheet numbering system. For utilities not in compliance with that system as of the effective date of GO 96-B, we will delegate authority to the Industry Divisions to require renumbering in accordance with schedules that the respective divisions may adopt. Finally, the Industry Divisions may excuse compliance by small utilities and by a utility (such as oil pipelines) that must file tariffs in accordance with a federal tariff sheet numbering system that is incompatible with our system.

In addition to the major changes discussed above, we have clarified or modified many General Rules in response to comments or upon our own further reflection. All proposed changes to the General Rules are shown in Appendix A, with new language underlined and deleted language struck through.

Among the additional changes, the following are notable. We have clarified our use of "public utility," the interrelationship between General and Industry Rules, and the applicability of GO 96-B. (General Rule 1.1.) We have also clarified the distinction between "formal" and "informal" matters (General Rules 3.7, 5.1), and clarified the definition of "person" to include both natural persons and legal entities. (General Rule 3.10.) We have revised several General Rules by replacing "advice letter filer" with "utility." We have completely rewritten General Rule 7.5 to reflect the process of advice letter review as described in Sections 3-4.7 of today's decision. In General Rule 8.2.3, we essentially carry over the provisions in GO 96-A for deviation from tariffs in case of emergency or to serve government agencies; however, we liberalize the provisions applicable to telecommunications utilities so that, during emergencies, they may provide free or reduced rate service to the public, and not just to government agencies. We have revised General Rule 8.5.4 to better describe the utility's responsibility for delineating the boundaries of its service area through maps and verbal descriptions. Finally, we have deleted our proposal for a "Customer Request for Deviation" (General Rule 10 in the original rulemaking proposal); instead, consistent with current practice, the Industry Divisions may assist informally when a customer believes a utility is unreasonably rejecting the customer's request for a deviation.

19 Conceivably, a request to modify a resolution may raise issues whose disposition would require a formal proceeding. For example, a simple update to an existing utility program is more likely to be suitable for an advice letter than is a broad change to that program. The scope of requested relief is always key in determining the propriety of presenting a utility request by means of an advice letter. 20 If disposing of a matter requires extensive additional data to be generated, analyzed, and/or debated, the matter normally should be submitted as a formal proceeding rather than as an advice letter. However, the need for such additional data sometimes is not apparent until staff has reviewed the advice letter and any protests. 21 Such withdrawal is without prejudice to refiling as a formal proceeding. However, an advice letter that is effective pending disposition may not be withdrawn on or after the effective date. See General Rule 5.4. 22 General Rule 8.2 also recognizes that deviations from tariffs might be approved in particular circumstances, and that statute or Commission order might authorize general exceptions to the tariff requirement for particular types of services or utilities. 23 GO 96-A already has similar requirements, but they are obscurely located in a list of mandatory "tariff rules." We retain this list (see General Rule 8.5.7), while recodifying and clarifying these particular requirements. 24 Of course, confidential treatment may be requested only for information for which such treatment is authorized by statute or Commission order. General Rule 9 does not broaden the types of information that may be kept confidential. Also, neither the cover sheet of an advice letter nor any of the information in the cover sheet may be kept confidential. 25 Our improvements are based on the tariff numbering system adopted by the Federal Communications Commission (FCC) (see generally Title 47, Chapter 61 of the Code of Federal Regulations). By Resolution U-275 (March 25, 1947), we authorized telecommunications utilities to follow the FCC system in their California tariffs. 26 The FCC allows a utility, as an alternative, to number its tariff sheets to reflect the section number of the tariff as well as the page. For example, under the alternative, sheets in Section 1 would be numbered 1-1, 1-2, and so on. Provided that the utility uses only one page numbering system throughout its tariffs, this alternative is acceptable to us. 27 In this situation, the FCC allows an "alpha" suffix (for example, 5A, 5B, and so on) in lieu of the decimal system. Again, provided the utility is consistent throughout its tariffs, use of the "alpha" suffix is acceptable to us.

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