In their summary of the orders or decisions the proposed rulemaking would change, the Petitioners indicate that existing rules governing utility/affiliate interactions would largely be supplemented by any standards of conduct adopted in the proposed rulemaking. Although they intend a new set of rules to be created, they acknowledge that the new rules would have implications for the Commission’s existing rules.
DGS/UC/CSU states its position more clearly. It agrees that new standards of conduct should supplement the Commission’s existing rules. DGS/UC/CSU argues that orders approving new corporate structures for particular utilities, however, should remain unchanged since restructuring "does not obviate the need for the detailed commitments made by utilities in exchange for authorization to alter their corporate structure." (DGS/UC/CSU Response, p. 5.) In contrast, the Indicated Producers seems to argue for the new rules completely supplanting existing rules. It argues that the existing rules are outdated, have market participants confused as to their applicability, and contain gaps with respect to the entities covered.
SCUPP cautions the Commission in its comments supporting the Petitioners that rules intended to govern the utility-affiliate relations between the merged Pacific Enterprises/Enova Corporation (PE/Enova) and its affiliates are under consideration in Application (A.) 96-10-038.
As we stated above, we intend these rules to apply to interactions between utilities and their affiliates providing energy and energy-related services. We agree with DGS/UC/CSU that orders approving new corporate structures for particular utilities should remain unchanged since restructuring does not obviate the need for the detailed commitments made by utilities in exchange for authorization to alter their corporate structures. Unlike the guidelines and policies for affiliate transactions adopted in the decisions on corporate restructurings, these rules developed through R.97-04-011, adopted today, will apply only to that subset of utility affiliates which market energy and energy-related services.
However, supplementing existing rules with a uniform set of rules may result in individual utilities being placed in the untenable position of being obligated to comply with competing rules on the same issue (or at least rules subject to different interpretations.) The utility/affiliate standards rulemaking we adopt today should address this issue.
Like other orders approving new corporate structures, the affiliate transactions rules under consideration in the PE/Enova merger application apply to all of the resulting company’s affiliate transactions, and not just those with its energy and energy-related affiliates. As SCUPP suggests, we will coordinate our consideration of any affiliate transaction rules in the PE/Enova docket and those rules proposed in R. 97-04-011.
The Reporting Requirements for Utility-Affiliate Transactions present a unique circumstance. These rules apply to all electric, gas and telephone utilities substantially uniform reporting requirements for transactions with their affiliates. They govern the reporting of allowed transactions between utilities and their affiliates whereas the existing affiliate rules referred to above go more to which transactions are allowed or how allowed transactions may occur. At this juncture, we do not anticipate the Reporting Requirements for Utility-Affiliate Transactions to change with the adoption of new standards of conduct governing utility transactions with affiliates which market energy and energy-related services.