COM/CXW/BWM/tcg Mailed 12/17/2004

Decision 04-12-049 December 16, 2004

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Rulemaking to implement the provisions of Public Utilities Code § 761.3 enacted by Chapter 19 of the 2001-02 Second Extraordinary Legislative Session.

Rulemaking 02-11-039 (Filed November 21, 2002)

INTERIM OPINION REGARDING COMMISSION
IMPLEMENTATION AND ENFORCEMENT OF
GENERATOR OPERATION STANDARDS

(See Attachment 1 for List of Appearances.)

TABLE OF CONTENTS

Title Page

INTERIM OPINION REGARDING COMMISSION IMPLEMENTATION
AND ENFORCEMENT OF GENERATOR OPERATION STANDARDS 2

1. Summary 2

2. Background 3

2.1. Committee Process 5

2.2. Commission Process 7

3. Operation Standards and Parallel Changes to Maintenance Standards 9

3.1. Guidelines (GO § 8.1) 9

3.1.1. Inclusion Within Standards 9

3.1.2. Changes to Guidelines 11

3.1.3. Maintenance Standards 14

3.1.4. Matrix 14

3.2. Operation Plan (GO § 8.2) 15

3.2.1. Contents (GO § 8.2.1) 15

3.2.1.1 Contents Generally 15

3.2.1.2 Resolution of Conflicts and Use of Narrative 15

3.2.1.3 Corrective Action 16

3.2.1.4. Specific Contents 17

3.2.2. Availability (GO § 8.2.2) 18

3.2.3. Initial Certification (GO § 8.2.3) 18

3.2.4. Filing Dates (GO § 8.2.4) 19

3.3. Plan Summaries (New GO § 8.3) 20

3.3.1 Contents (GO § 8.3.1) 20

3.3.2. Filing (GO § 8.3.2 and Related Sections) 23

3.3.3 Updates (GO § 8.3.2.3) 24

3.4. Exemption (GO § 8.4) 25

3.5. Maintenance Standards 25

3.5.1. Consistency With Operation Standards 25

3.5.2. Matrix and Maintenance Plan Summary 26

3.6. Committee's Recommendation 27

3.7. GAO Compliance 28

4. Expiration of General Duty Standards for Operation and Maintenance 29

TABLE OF CONTENTS

(Cont'd)

Title Page

5. Effective Dates 29

5.1 Effective Date for Changes to GO (§ 15.12) 29

5.2. Active Service (§ 2.1) 29

6. Corrections and Other Minor Changes 30

7. Items Common to Operation and Maintenance 31

7.1. FERC Licensed Hydro 31

7.2. Multiple Violations 31

7.3. GAO Management of Employees 33

7.4. Independent Business Judgment 34

7.5. Confidential Information 35

8. Jurisdiction 36

8.1. Redundant Regulations 36

8.2. CAISO Tariff 37

8.3. Consistency With Other Law 39

8.4. Legal Basis for Approving Changes in Long-Term Plant Status 40

8.5. Transfer of Ownership 42

9. California Environmental Quality Act 43

10. Proceeding Remains Open 44

11. Comments on Draft Decision 45

12. Assignment of Proceeding 46

Findings of Fact 46

Conclusions of Law 48

INTERIM ORDER 51

Attachment 1: List of Appearances

Attachment 2: Events in California's Energy Crisis

Attachment 3: Operation Standards and Recommended Guidelines for Generating Asset Owners

Attachment 4: Adopted Changes to General Order 167

INTERIM OPINION REGARDING COMMISSION
IMPLEMENTATION AND ENFORCEMENT OF
GENERATOR OPERATION STANDARDS

1. Summary

The energy crisis of 2000-2001 resulted in substantial disruption, sacrifice and economic hardship for the people and businesses of California. Among the causes, some electric powerplants were operated in questionable ways, or taken out of service for questionable reasons. This resulted in electricity power shortages and outages, danger to public health and safety, and dramatically increased prices. The California legislature responded with Senate Bill (SB) X2 39 to ensure electrical system reliability and adequacy, and stabilize the market.¹

In SB X2 39, the people of the State of California found and declared that electric powerplants are essential facilities. They also found and declared that the public interest, health and safety require that these essential facilities be operated and maintained effectively, appropriately and efficiently. The legislation established the California Electricity Generation Facilities Standards Committee (Committee) to develop and adopt operation and maintenance standards, and charged the Commission with implementing and enforcing those standards. It also directed that the Commission enforce California Independent System Operator (CAISO) protocols for the scheduling of powerplant outages.

The Commission has responded by adopting General Order (GO) 167. To date, we have implemented and are enforcing Committee-adopted Maintenance Standards, General Duty Standards for Operation and Maintenance (GDS), Logbook Standards for thermal powerplants, Logbook Standards for hydroelectric powerplants, and CAISO powerplant outage scheduling protocols. (See Decision (D.) 04-05-017 and D.04-05-018.)

This order involves our implementation and enforcement of Operation Standards adopted by the Committee on October 27, 2004. We also provide direction on the use of adopted Guidelines as guides, not standards. We address compliance via (a) on-site plans and (b) a summary filed with the Commission. We make other changes to GO 167 for parallel construction within the GO, consistency, clarity, and to correct errors.

Within 90 days of the effective date of the changes to GO 167 adopted herein, an authorized representative of each covered existing generation asset shall file with the Director of the Consumer Protection and Safety Division (CPSD) a verified Initial Certification regarding its Operation Plan. (GO §§ 8.2 and 15.3.) Within 120 days after the Executive Director specifies the form and content elements, an authorized representative of each covered generation asset shall file with the Director of CPSD a verified Plan Summary. (GO §§ 7.3, 8.3, 15.3, 15.10.) The proceeding remains open.