II. Procedures for Establishing CRS Exemption Eligibility

A. Position of Parties

PG&E (with the support of SCE) proposes a procedure whereby any POU seeking to be added to the list of entities eligible for CRS exemption would provide informal written notification to the Commission's Energy Division and the affected IOU.

As evidence to support the claim of CRS exemption eligibility, PG&E proposes that the POU provide a list of customer accounts, including names and service addresses of the customers served, with their service start dates. To the extent that this information may be confidential, PG&E suggests that the POU could provide the list to the Energy Division under Section 583 and may redact customer names and addresses from the list provided to the IOU. The Energy Division would then be responsible for verifying that the POU meets the criteria established in D.04-11-014 and would provide written notice to the POU and affected IOU of its eligibility determination within 60 days of the POU request. In comments on the Draft Decision, PG&E suggests that if the Commission chooses not to require the POU to submit full customer lists, in the interests of minimizing burden, the POU could be required to submit a more limited list of just 100 customers.

If either the IOU or POU disagree with the Energy Division's determination, PG&E suggests that they be allowed to send a written notice to the Energy Division within 15 days of notification, with the reasons and supporting justification to support any claim that the determination should be changed. PG&E proposes that any such requests for reconsideration be resolved by the Energy Division by written notice within a 30-day period. PG&E opposes any further opportunity for appeal of the Energy Division's eligibility determination.

Hercules, on the other hand, proposes that POUs seeking exemption eligibility file a formal motion, to be ruled upon by the assigned ALJ in this proceeding. The motion would include supporting evidence that POU was providing electricity to retail end-use customers on or before July 10, 2003, and serving 100 or more customers. Hercules proposes that the evidence consist only of a verified affidavit signed by an officer or authorized employee of the POU, attesting that the aforementioned eligibility criteria are met.

Hercules objects to a requirement that the POU provide customer list information to the investor-owned utilities. Hercules argues that the provision of such information is unnecessarily time consuming. Hercules argues even if the customer names and addresses were redacted, PG&E and SCE would still gain access to valuable business information that may not otherwise be lawfully obtained.

Hercules proposes that if the Commission believes further verification of a POU affidavit is warranted, the ALJ could direct that the Energy Division review or audit the information attested to in the affidavit. If Energy Division audit entails review of customer-specific information of the POU, Hercules proposes that such information be treated confidentially pursuant to General Order 66-C, and not available for public inspection.

Hercules also opposes PG&E's proposal to prohibit parties from appealing exemption eligibility determinations to the full Commission. Hercules argues that in order to protect due process rights, a party should be permitted the normal rights afforded parties in Commission proceedings, and thus be permitted to appeal to the full Commission in the event that the party believes that an eligibility determination was improperly decided.

Stockton proposes a procedure to determine eligibility based on the system for determining Exempt Wholesale Generator (EWG) status established by section 711 of the Energy Policy Act of 1992 and FERC regulations thereunder.

As proposed by Stockton, an entity seeking exemption from CRS would file a sworn statement by a representative legally authorized to bind the entity attesting to any facts or representations presented to demonstrate eligibility for exemption from CRS (see, 18 CFR § 365.3). If the Commission has not issued an order granting or denying an application within 60 days of receipt of the application, the exemption would be automatically deemed granted (see, 18 CFR § 365.5).

Any party objecting to another entity's request for exemption would be permitted to make its views known to the Commission in the form of a sworn statement similar to that required of applicants, specifying the particular basis for the objection.

To avoid improper objections, however, Stockton proposes that any objections made for anticompetitive or other market manipulation reasons result in sanctions imposed by the Commission, to the extent permitted by law.

B. Discussion

We shall adopt the general process for establishing eligibility as proposed by Hercules. In D.04-11-014, the Commission stated that

"other publicly owned utilities may make a motion to the assigned ALJ to be added to the eligibility list based on a demonstration that they meet the criteria we establish in this decision. The assigned ALJ may rule on the eligibility of any entity that makes such a motion, after verifying eligibility and considering comments from other interested parties. Any such motions should be served on all parties on the service list for R.02-01-011." (D.04-11-014, at 48-49.)

Consistent with D.04-11-014, we shall therefore require that parties file formal motions in this proceeding seeking eligibility, rather than simply making an informal notice to the Commission's Energy Division. A ruling granting or rejecting POU requests for exemption status shall be made by the assigned ALJ, based upon confirmation of whether the prescribed eligibility criteria are met.

We agree that it is not necessary for the POU, in its motion seeking to be added to the list of exempt POUs, to disclose the specific number of customers served as of July 10, 2003. As long as a POU verifies that it was serving at least 100 retail customers as of July 10, 2003, there is no necessity to require every POU to submit detailed information as to the specific number of customers served by the POU. Therefore, in order to safeguard the confidentiality of POU data and avoiding unnecessary burdens of compiling and submitting such data, we shall not require each POU to disclose specific customer totals. Instead, as supporting evidence of eligibility, we shall require only that a sworn affidavit from a responsible officer or employee be attached to the motion, affirming under penalty of perjury that the POU was providing electricity to 100 or more retail end use customers as of July 10, 2003. Each POU shall remain subject to possible audit by the Commission's Energy Division, as deemed warranted, to verify the assertions contained in the POU affidavits.

Based on the process adopted herein, we serve notice that any POU seeking exemption eligibility pursuant to the criteria in D.04-11-014 shall file a motion in this proceeding within 10 business days following the effective date of this order. The assigned ALJ shall then promptly issue a ruling either granting or denying eligibility.

If a party believes that the ruling on exemption eligibility has misapplied the criteria to the facts presented, the party may file a motion for reconsideration of the ruling within 10 business days of the effective date of the ruling, setting forth the reasons supporting the claim of error, together with any relevant factual documentation. Motions for reconsideration filed pursuant to this process are subject to the standard Rule 45 procedures applicable to motions generally.