IV. We Have Ample Authority to Grant Interim Emergency Rate Relief

We have a duty to assure that the utilities are able to continue to procure and deliver power for their customers. Our basic obligation under the Public Utilities Act is to assure the people of California adequate service at reasonable rates, as we stated in D.00-12-067. Section 451 provides, in relevant part:

All charges demanded or received by any public utility, or by any two or more public utilities, for any product or commodity furnished or to be furnished or any service rendered or to be rendered shall be just and reasonable. Every unjust or unreasonable charge demanded or received for such product or commodity or service is unlawful. Every public utility shall furnish and maintain such adequate, efficient, just and reasonable service, instrumentalities, equipment and facilities as are necessary to promote the safety, health, comfort and convenience of its patrons, employees, and the public.

We therefore take interim action to ensure that reliable, safe, and adequate service is provided to all Californians at just and reasonable rates.⁹ Our actions are consistent with the Legislature's intent, as stated in §§ 330(g) and 391(a), part of AB 1890, which provide in relevant part:

330(g): Reliable electric service of utmost importance to the safety, health, and welfare of the state's citizenry and economy.

391(a): Electricity is essential to the health, safety, and economic well-being of all California consumers.

Pursuant to §§ 451 and 728, the Commission has authority here to approve interim rate relief to address an emergency condition and to ensure that customers receive adequate service at just and reasonable rates. (See also California Constitution, Article XII, Section 6.)

Moreover, the Commission's authority to grant interim rate relief in an emergency situation is well established. The California Supreme Court has recognized this authority on several occasions, most recently and expansively in TURN v. CPUC, 44 Cal. 3d 870 (1988). There, the Court stated: "The Commission's power to grant interim rate increases was recognized by this court in City of Los Angeles v. Public Utilities Commission (1972) 7 Cal. 3d 331." TURN v. CPUC 44 Cal.3d at 878. In City of Los Angeles, the Court cited with approval this Commission's decision in Pacific Telephone and Telegraph Company (1949) 48 Cal.P.U.C. 487 where we noted the Commission's authority to grant rate relief on an interim basis where there is a prima facie showing of an emergency condition. (Pacific Telephone & Telegraph Company, 48 Cal.P.U.C. at p. 488, quoted in TURN, 44 Cal.3d at 878.) The nature of the emergency showing here includes cash flow problems that impair the utility's credit. Indeed, TURN, supra, recognized that cash flow impacts that might increase the utility's borrowing costs were also a relevant factor in authorizing an interim rate increase. (Id., at 876, 879-880.) In the instant case, we are presented with a prima facie showing of an impending inability to pay current bills that could interfere with the utilities' ability to procure electricity. We do not need to apply the more expansive TURN standard to find that an emergency exists, justifying interim rate relief pending further regulatory action.

We emphasize the interim nature of the relief granted here. The surcharge authorized today is subject to refund and the rate design for collection of these amounts is subject to adjustment. As the California Supreme Court explained in City of Los Angeles, the purpose of granting an interim rate increase upon appropriate findings is to allow the Commission to further consider the propriety of the application before it. (Id., at 354.)¹⁰ We intend to continue immediately our consideration of the applications before us, with additional hearings and the record development necessary to address ratemaking on a comprehensive basis.

¹⁰ City of Los Angeles cites Saunby v. Railroad Commission (1923) 191 Cal.226. Under Saunby interim relief based on limited facts and a limited investigation is appropriate because the relief is temporary, pending full consideration of all questions involved in a final rate-making order. (191 Cal. at 232.) That is our intention here.