4. Settlement Rules
4.1. Bilateral Settlements
In the consolidated proceedings there were a number of settlements9 proposed by either or both SDG&E and SoCalGas and at least one other party. Each settlement is discussed separately in this decision. They are:
1. Appendix 1, title as filed, is Settlement Agreement Regarding San Diego Gas & Electric Company Test Year 2008 Revenue Requirement, which is Ex. SDG&E/SCG-303, (SDG&E Test Year 2008 Settlement).
2. Appendix 2, title as filed, is Settlement Agreement Regarding Southern California Gas Company Test Year 2008 Revenue Requirement, which is Ex. SDG&E/SCG-304, (SoCalGas Test Year 2008 Settlement).
3. Appendix 3, title as filed, is Settlement Agreement Regarding San Diego Gas & Electric Company Post-Test Year Ratemaking, which is Ex. SDG&E/SCG-305, (SDG&E Post Test Year Ratemaking Settlement).
4. Appendix 4, title as filed, is Settlement Agreement Regarding Southern California Gas Company Post-Test Year Ratemaking, which is Ex. SDG&E/SCG-306, (SoCalGas Post-Test Year Ratemaking Settlement).
5. Appendix 5, title as served, is Settlement Agreement Regarding Employee Safety Incentive Measure, which is Ex. CCUE-4, (SDG&E and CCUE Settlement Agreement).
6. Appendix 6, title as served, is Settlement Agreement Regarding Utility Workers Union of America, Local 132 Issues, which is Ex. SDG&E/SCG-265, (SoCalGas and Local 132 Settlement).
7. Appendix 7, as served, is Six Year Leadership Agreement, which is Ex. SDG&E/SCG-280, (Greenlining Settlement).
8. Appendix 8, title as served, is Settlement Agreement Regarding Local 483 Issues, which is Ex. SDG&E/SCG-255, (SoCalGas and Local 483 Settlement).
9. Appendix 9, title as served, is Memorandum of Understanding, which is Ex. SDG&E/SCG-259, (Pest Control Operators Settlement).
10. Appendix 10, title as served, is Memorandum of Understanding, which is Ex. SDG&E/SCG-256, (Disability Rights Advocates Settlement).
4.2. Summary
These general rate proceedings were fully and extensively litigated. Nevertheless, several parties entered into bilateral, limited scope, settlements resolving several limited issues and much more broadly proposing settlements for both companies' Test Year 2008 revenue requirement and post-test year ratemaking mechanisms. As more fully discussed in this decision, we adopt several of the settlements (modifying two of them) and reject two limited scope settlements. As the United States Court of Appeals for the Ninth Circuit has observed, in evaluating a settlement the agreement must stand or fall on its own terms, not compared to some hypothetical result that the negotiators might have achieved, or that some believe should have been achieved:
Settlement is the offspring of compromise; the question we address is not whether the final product could be prettier, smarter or snazzier, but whether it is fair, adequate and free from collusion. (Hanlon v. Chrysler Corp., 150 F.3d 1011, 1027 (9th Cir. 1998).
4.3. Settlement Rules
Rule 12.1, provides in pertinent part:
(Rule 12.1) Proposal of Settlement
(a) Parties may ... propose settlements on the resolution of any material issue of law or fact or on a mutually agreeable outcome to the proceeding. Settlements need not be joined by all parties; however, settlements in applications must be signed by the applicant. ...
The motion shall contain a statement of the factual and legal considerations adequate to advise the Commission of the scope of the settlement and of the grounds on which adoption is urged. Resolution shall be limited to the issues in that proceeding and shall not extend to substantive issues which may come before the Commission in other or future proceedings. ...
(b) Prior to signing any settlement, the settling parties shall convene at least one conference with notice and opportunity to participate provided to all parties for the purpose of discussing settlements in the proceeding. ...
(c) Settlements should ordinarily not include deadlines for Commission approval...
(d) The Commission will not approve settlements, whether contested or uncontested, unless the settlement is reasonable in light of the whole record, consistent with law, and in the public interest.
In short, we must find whether the settlements comport with Rule 12.1(d), which requires a settlement to be "reasonable in light of the whole record, consistent with law, and in the public interest." We address below whether the settlements meet these three requirements.
4.4. Reasonable in Light of
the Whole Record
The settlements as discussed below, except for the proposed settlements with Local 483 and Greenlining Institute, are reasonable in light of the whole record. For these two, we find no factual or policy basis in the record to adopt these settlements. All of the other settlements are supported by the factual record and sound policy recommendations.
4.5. Consistent With Law
None of the settlements violate any code or law and are all therefore consistent with this requirement of our settlement rules.
4.6. In the Public Interest
Rule 12(a) includes the requirement that a settlement "shall not extend to substantive issues which may come before the Commission in other or future proceedings." The settlements as discussed below, except for the proposed settlements with Local 483 and Greenlining, are in the public's interest.
9 The assigned ALJ identified an exhibit number and admitted the proffered settlements into the record either during evidentiary hearings, or by ruling subsequent to hearings.
