Decision DRAFT DECISION OF ALJ WEISSMAN (Mailed 11/19/98)
BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA
Rulemaking to Establish Rules For Enforcement of the Standards of Conduct Governing Relationships Between Energy Utilities and Their Affiliates Adopted By the Commission In Decision 97-12-088. |
R.98-04-009 (Filed April 9, 1998) |
FINAL OPINION ADOPTING ENFORCEMENT RULES
In Decision (D.) 97-12-088, we adopted rules governing the relationship of California's natural gas local distribution and electric utilities to their affiliates (see Appendix A to that decision). At the same time, we asked our staff to prepare proposed rules providing special complaint procedures and special penalties that may be appropriate to improve our enforcement of these new affiliate transactions rules. By creating this docket, we began a process to consider new enforcement rules. We created this docket on April 9, 1998, when we issue proposed rules for comment. The Assigned Commissioner and Administrative Law Judge held a prehearing conference on April 30, 1998. Various interested parties filed opening comments on May 12, 1998 and reply comments on June 5, 1998. In this decision, we add to the rules governing affiliate transactions specific provisions concerning enforcement of those rules.
The enforcement provisions that we adopt today differ in some ways from the proposed rules that we issued in April. The most significant changes are summarized as follows:
1. We provide a specific penalty scheme to apply to enforcement of the affiliate transaction rules.
2. In the proposed rules, we defined "standing" to include "whistleblowers" who choose to remain anonymous throughout a complaint proceeding. Here, we specify that if a whistleblower chooses to remain anonymous, the matter will be heard by the Commission only if the Commission concludes that there is enough corroborating information available to merit the opening of a formal investigation.
3. We remove a proposal that the Consumer Services Division be allowed to file a Request for Investigation when it believes that a violation has occurred.
4. We provide further criteria to explain how the Commission determines the appropriate fine to impose in a specific situation.
5. We add to the rules a procedure allowing for a quick response to potential ongoing violations that appear likely to result in irreversible harm.
In the order initiating this process, we invited parties to comment on the proposed rules and on certain other specific topics. Here, we will speak to the proposed rules and the changes we are making today by first addressing the specifically identified topics and then discussing each portion of the proposed and adopted rules.
We invited parties to consider the merits of dividing the affiliate transaction rules into various categories and assigning an appropriate enforcement mechanism to each category. The reviews were mixed. Various commenting parties agreed that it would be reasonable to create such categories, but no one has proposed a comprehensive and effective way to assign an appropriate enforcement approach to each category. Some, such as the Joint Petitioners Coalition,1 oppose the use of this type of ranking as too hard to implement. The Office of Ratepayer Advocates (ORA) had initially proposed a three-tiered approach to assessing the nature of a violation, but later withdrew its proposal. Pacific Gas and Electric Company (PG&E) suggests that penalties be imposed in a manner that takes into account the utility's motivation - whether rules violations were inadvertent, intentional, or blatant. We will address this approach below, when we discuss the guidelines we will apply to assessing the appropriate fine in a given situation. However, we will not adopt a broad set of categories for the purposes of assigning enforcement mechanisms.
1 Members of the Joint Petitioner Coalition include the Alliance for Fair Energy Competition and Trading members of which include Calpine Corporation, the Institute of Heating and Air Conditioning Industries, and the Electric & Gas Industries Association, Inc.; Amoco Energy Trading Corporation; Enron Corporation; the Imperial Irrigation District; New Energy Ventures, Inc.; the Plumbing, Heating and Cooling Contractors of California; the City of San Diego; The School Project for Utility Rate Reduction and the Regional Energy Management Coalition; the Southern California Utility Power Pool, members of which include the Los Angeles Department of Water and Power and the Cities of Burbank, Glendale and Pasadena, California; Utility Consumers' Action Network; The Utility Reform Network (TURN); and XENERGY.
