We sought comments from all interested parties on the merits of adopting the following language as proposed by TURN:
"The Commission shall require the utility to divest the involved affiliate(s) if the Commission determines that the utility or its affiliate(s) knowingly violated any provision(s) of Sections III, IV, or V of these rules, and the violation resulted or had the potential to result in substantial injury to consumers of regulated or unregulated products or services, or to competition."
As an alternative, we sought comments on the potential of prohibiting the utility from allowing the use of its name and logo by its affiliate(s), either on a temporary or permanent basis, if the abuse is related to an inappropriately shared identity between the utility and its affiliate.
Not surprisingly, PG&E, SDG&E/SoCalGas, Edison and Southwest Gas are vigorous in their opposition to the use of divestiture as a means of enforcement. And all argue that the Commission lacks the authority to pursue such a remedy. In opposition, TURN refers only to the broad authority granted to the Commission in § 701, suggesting that if an order to divest an affiliate is "necessary and convenient" to the Commission's primary duties and obligations, the Commission has all the authority it needs.
We would be ill-advised to state that no circumstance exists under which the agency could require a regulated entity to completely and permanently separate itself from an affiliated enterprise. TURN is correct in suggesting that the Commission must be willing to consider strong responses when a party knowingly violates a rule and thereby exposes a consumer or competitor to substantial injury. Where it would otherwise be appropriate, such a remedy remains available to the Commission whether or not it appears in these rules. However, to write such a provision into these enforcement rules would be to express a level of jurisdictional certainty that does not exist in the abstract.4 In the absence of a specific factual situation, we cannot say with certainty that we have the authority to order divestiture. For this reason, we will not expressly include this option in our rules.
4 PG&E suggests that the existence of § 377 precludes the Commission from ordering any divestiture of utility property other than under specific circumstances and that, by extension, it would prevent the Commission from ever ordering the divestiture of nonutility property. That section describes the circumstances under which the Commission could prohibit an electric utility from continuing to own generation assets. It is silent as to how the Commission should regard the divestiture of any other type of asset. We are not persuaded that the law addresses the issue we face here, either directly, or through exclusion.
