D0204018 PG&E's ordered to tender a notice of intent, and to pay penalty of $500 a day

Discussion

PG&E's proposal for resolution of this proceeding is supported by staff and is not contested by any party. While it is not presented to us as a formal settlement, we nevertheless find it reasonable to evaluate the proposal under the criteria set forth in Rule 51.1(e) of the Rules of Practice and Procedure for consideration of settlements.² As explained below, we determine that PG&E's proposal satisfies these criteria.

Reasonable in Light of the Whole Record

The record in this proceeding is minimal. It consists of the OII/OSC itself; PG&E's December 14, 2001 filing pursuant to Ordering Paragraph 4 of the OII/OSC identifying officers and employees who decided that PG&E would not tender its NOI on November 14, 2001; the transcript of the hearing and prehearing conference of December 19, 2001, which incorporates a written copy of PG&E's proposal; PG&E's motion for approval of its proposal; and staff's response to the motion. No other pleadings have been filed, no testimony has been served, and no evidence has been admitted. The record essentially consists of the Commission's provision of notice to PG&E and its officers and employees that they could be subject to penalties for PG&E's noncompliance with a previous Commission order, a description of that noncompliance, PG&E's identification of the responsible officers, and a description of PG&E's proposal for resolving the issues this proceeding.

PG&E recognizes that it failed to timely notify the Commission of its determination that it was not able to meet the deadline set by D.01-10-059 for tendering its NOI, and the company states that it regrets this failure. PG&E's agreement to voluntarily pay a penalty, its agreement to comply (albeit belatedly) with the previous Commission order, are all reasonable in light of the whole record before the Commission. We are satisfied that PG&E's recognition of its failure to timely notify us of its inability to comply with D.01-10-059 and its agreement to pay a penalty of up to $48,000 provide an adequate remedy for any fault that might reasonably be ascribed to PG&E, and do so without the need for litigation.

Consistent With Law

PG&E acknowledges the Commission's legal authority, and its proposal for resolving this proceeding is consistent with and furthers the Commission's legal right and authority to review PG&E's costs. PG&E's tendering of an NOI for a GRC is consistent with the law, and the penalty is within the range of what the Commission has the legal authority to impose. Nothing in the proposal is inconsistent with the law.

In the Public Interest

The proposal provides increased certainty to the public and participants in PG&E's GRC of when the NOI will be tendered. Absent the adoption of the proposal, there is an existing Commission order requiring PG&E to tender its NOI on November 14, 2001 that PG&E has not complied with, and it is uncertain when the NOI would be tendered. If the OII/OSC were to be litigated, that uncertainty would remain until such time as the litigation was resolved. Adopting PG&E's proposal also conserves the human and financial resources of both PG&E and the Commission by eliminating litigation.

There is no guarantee that litigation of the issues presented in the OII/OSC would result in either a significantly higher penalty or a significantly earlier tendering of the NOI, and in fact litigation would likely delay the tendering of an NOI beyond the date contained in PG&E's proposal. In D.01-10-059, the Commission has endorsed an expedited schedule for PG&E's 2003 GRC as being in the public interest. Accordingly, adopting PG&E's proposal is more consistent with the public interest than litigation.

The proposal gives PG&E a monetary incentive to tender its NOI as soon as possible, thereby furthering the public interest in an expedited review of PG&E's costs. Further, in the event that PG&E fails to comply with its commitment and obligation to tender the NOI for a 2003 GRC on or before April 15, 2001, nothing in the proposal prohibits the Commission from pursuing any appropriate sanctions against PG&E for such failure.³

Finally, the proposal is in the public interest because PG&E explicitly understands and recognizes that the Commission has the need, right, and authority to periodically review the costs of PG&E and all utilities that it regulates, and that the 2003 GRC is an appropriate vehicle to accomplish that goal.

Other Matters

The proposal for resolving this proceeding provides that PG&E will pay a penalty of $500 per day for each day beginning January 9, 2001 and continuing each day thereafter. However, the proposal does not address specific requirements pertaining to the penalty. We will order PG&E to pay all accumulated daily fines no later than April 25, 2002, which is 10 days after the latest date on which a daily penalty of $500 would accrue under the adopted proposal. Payment shall be made to the Public Utilities Commission, for deposit in the General Fund of the State of California.

We expect PG&E's full compliance with this order as well as its cooperation with our staff in the discharge of the company's duties and obligations created by this order. Provided that PG&E tenders its NOI for a 2003 GRC no later than April 15, 2002, we do not intend to pursue any additional penalty or sanction, beyond those identified in PG&E's proposal, against PG&E, or any officer or employee of PG&E, for its failure to tender an NOI on November 14, 2001 as ordered in D.01-10-059.

We will close this proceeding by this order. Should PG&E fail to comply with the terms of this order, we may reopen this proceeding or initiate a new proceeding as we determine to be appropriate.

² The rule provides that "[t]he Commission will not approve stipulations or settlements, whether contested or uncontested, unless the stipulation or settlement is reasonable in light of the whole record, consistent with law, and in the public interest." ³ We place PG&E on notice that should it delay the tender of its NOI beyond April 15, 2002 without good cause, we may impose additional and more substantive penalties as provided by law. Pub. Util. Code Section 2107 provides for a penalty of not less than $500, nor more than $20,000 for each offense, and Section 2108 provides that each day's continuing violation is a separate offense.