1 1 SAN FRANCISCO, CALIFORNIA, DECEMBER 20, 2002 - 9:10 A.M. 2 * * * * * 3 ADMINISTRATIVE LAW JUDGE SULLIVAN: On the record. 4 Welcome everybody. I would like to welcome you 5 to the first meeting of the California Electric Generation 6 Facilities Standards Committee. 7 That Committee consists of Commissioner 8 Carl Wood, Michael Kahn of the California ISO and 9 Glenn Bjorkland. 10 I am Administrative Law Judge Sullivan, and I am 11 here to facilitate that meeting. 12 We will now have opening remarks. 13 Commissioner Wood, would you begin. 14 STATEMENT OF COMMISSIONER WOOD 15 COMMISSIONER WOOD: Good morning and welcome to the 16 first meeting of the California Electricity Generation 17 Facilities Standards Committee. I have to read that name. 18 I haven't memorized it yet. 19 This is a Committee that was created under the 20 auspices of Senate Bill 39, 2nd Extraordinary Session, 21 authored by Senator Burton and Senator Spear. It was passed 22 in order to address issues and problems that emerged during 23 the energy crisis that we are still emerging from, concerns 24 over the maintenance and operation of particularly divested 25 generating plants in California. 26 I'm Commissioner Carl Wood, and I was designated 27 by the Public Utilities Commission to fill one of the spots 28 on this Committee. PUBLIC UTILITIES COMMISSION, STATE OF CALIFORNIA SAN FRANCISCO, CALIFORNIA 2 1 With us also is Chairman Michael Kahn from the 2 Independent System Operator Board, who was directed by his 3 board to represent the ISO. And also seated beside me is 4 Glenn Bjorkland, an industry expert with very considerable 5 credentials, who was selected by both the PUC and the ISO as 6 the third member of this Committee. 7 We have quite a bit of staff work that has gone 8 into preparation for this first meeting and to make sure 9 that we can launch this project very expeditiously and 10 create rules, forward them to the PUC for adoption and then 11 subsequent enforcement so that we can ensure Californians 12 the continued reliable provision of electric service 13 throughout the state. 14 I'll, at this point, turn the mike over to 15 Michael Kahn, who may have a few words to say as well. 16 STATEMENT OF MR. KAHN 17 MR. KAHN: Yes. Good morning. Thank you, 18 Commissioner Wood. 19 I would just like to, on behalf of the ISO, thank 20 the PUC representatives, especially Commissioner Wood and 21 Judge Sullivan and the other individuals who have been so 22 helpful in setting this up in establishing the procedural 23 framework for us and also moving forward. 24 We've also had very good cooperation from ISO 25 management, and, as will be reflected in today's proceeding, 26 there is quite a bit of thought that has gone into this from 27 staff members at both institutions. 28 I think that we are very fortunate in the PUBLIC UTILITIES COMMISSION, STATE OF CALIFORNIA SAN FRANCISCO, CALIFORNIA 3 1 inauguration of this Committee to have someone as 2 knowledgeable and as experienced as Glenn Bjorkland, and we 3 are pleased that he has been willing to sit with us on this 4 Committee, and we're looking forward to his cooperation and 5 his input. 6 On a going-forward basis, I think that 7 Commissioner Wood's comments are appropriate. 8 I would just like to add that we have been 9 instructed by the Legislature to worry about problems that 10 manifested itself during a crisis that is not solved, and we 11 intend to look into those problems in the most conscientious 12 way we can and to seek solutions for the problems. But we 13 will require the input of the stakeholders at every phase of 14 our activities so that we realize that we don't get off 15 track and that we do things that are not only workable for 16 the citizens but are also workable for the constituent 17 members. 18 The ISO is pleased to have been selected to 19 participate in this and will definitely give this work its 20 wholehearted support. 21 And with that, I guess, Commissioner Wood, if 22 Mr. Bjorkland would like to make an opening comment, it's 23 his turn. 24 ALJ SULLIVAN: Mr. Bjorkland. 25 STATEMENT OF MR. BJORKLAND 26 MR. BJORKLAND: Well, thank you, Michael and 27 Commissioner Wood. 28 It's nice to be here to dust off the retirement PUBLIC UTILITIES COMMISSION, STATE OF CALIFORNIA SAN FRANCISCO, CALIFORNIA 4 1 and be with you to be able to share my 35 years of 2 experience in the operation and maintenance of generating 3 facilities with you, so I look forward to the discussions 4 and the review of the standards that have been developed so 5 far. 6 COMMISSIONER WOOD: Thank you. 7 The next item on the agenda is the designation of 8 a Presiding Officer. To conduct this, I turn this over to 9 Judge Sullivan and ask him to recognize Mike Kahn. 10 ALJ SULLIVAN: Mr. Kahn, would you please begin. 11 MR. KAHN: Yes, I would like to move that we, as a 12 first order of business, designate Carl Wood as the 13 Presiding Officer. 14 And just a couple of comments: I think this is 15 particularly appropriate because of his station with the 16 PUC, but he has shown in the last few months extraordinary 17 vigor in fulfilling our statutory obligation here, and I 18 personally look forward to the leadership that he has 19 already shown in this endeavor. So I would move that he 20 become Presiding Officer. 21 ALJ SULLIVAN: Mr. Bjorkland. 22 MR. BJORKLAND: I would second that. 23 ALJ SULLIVAN: Okay. 24 Any discussion? 25 Well, let's call for a vote. We'll take it in 26 alphabetical order. 27 Mr. Bjorkland. 28 MR. BJORKLAND: Aye. PUBLIC UTILITIES COMMISSION, STATE OF CALIFORNIA SAN FRANCISCO, CALIFORNIA 5 1 ALJ SULLIVAN: Mr. Kahn. 2 MR. KAHN: Aye. 3 ALJ SULLIVAN: Commissioner Wood. 4 COMMISSIONER WOOD: Aye. 5 ALJ SULLIVAN: The Presiding Officer is now 6 Commissioner Carl Wood by unanimous vote. 7 Commissioner Wood. 8 COMMISSIONER WOOD: Thank you, Judge Sullivan. 9 The next item on the agenda is the designation of 10 a Committee staff director, and I would like to propose at 11 this time that we designate Richard Clark, who is a senior 12 staff member, in fact, a director at the Public Utilities 13 Commission. And I would accept the motion to that effect or 14 to nominate anyone else. 15 MR. KAHN: I would so move. 16 MR. BJORKLAND: I'll second. 17 ALJ SULLIVAN: Okay, the motion has been -- 18 COMMISSIONER WOOD: I can preside now. 19 ALJ SULLIVAN: Okay. 20 COMMISSIONER WOOD: It's been moved and seconded to 21 designate Richard Clark as Staff Director of this Committee. 22 I guess we have to do a role call of every vote 23 today: Mr. Bjorkland. 24 MR. BJORKLAND: Aye. 25 COMMISSIONER WOOD: Mr. Kahn. 26 MR. KAHN: Aye. 27 COMMISSIONER WOOD: And I vote aye as well. 28 That's unanimous. Richard Clark is designated PUBLIC UTILITIES COMMISSION, STATE OF CALIFORNIA SAN FRANCISCO, CALIFORNIA 6 1 staff director. 2 The next item is future meeting dates, and we 3 have two future meeting dates that are -- that have been 4 proposed. They are January 24th, 2003, and February 3rd, 5 2003. 6 Is there a motion to accept those dates? 7 MR. KAHN: So moved. 8 COMMISSIONER WOOD: Is there a second? 9 MR. BJORKLAND: I'll second that. 10 COMMISSIONER WOOD: It's been moved and seconded to 11 designate January 24th and February 3rd as our next two 12 meeting dates. 13 I'll ask for votes: Mr. Bjorkland. 14 MR. BJORKLAND: Aye. 15 COMMISSIONER WOOD: Mr. Kahn. 16 MR. KAHN: Aye. 17 COMMISSIONER WOOD: And I vote aye as well, so those 18 are designated. 19 We have a standard agenda format that has been 20 proposed for future meetings. And is that before us in the 21 ALJ's ruling, or do we have that in some written form? 22 ALJ SULLIVAN: Off the record. 23 (Off the record) 24 ALJ SULLIVAN: Back on the record. 25 This is Administrative Law Judge Sullivan. 26 What I have done in the ruling is I proposed a 27 procedure that would allow for the public distribution of 28 the specific agendas for the next two meetings. PUBLIC UTILITIES COMMISSION, STATE OF CALIFORNIA SAN FRANCISCO, CALIFORNIA 7 1 That procedure is that as we adopt a formal 2 agenda, we will e-mail it to all people whom we have an 3 e-mail address for and we will post it on the Commission's 4 website. 5 I hope that will be acceptable to the Committee. 6 COMMISSIONER WOOD: Is there any comment on that 7 description? 8 MR. KAHN: No. I think that's a good idea, and I 9 appreciate the process. 10 COMMISSIONER WOOD: Okay. 11 Glenn, is that okay with you? 12 MR. BJORKLAND: No comment. 13 ALJ SULLIVAN: Fine. 14 Then without taking any formal action, I think 15 that can be accepted. We're going forward. 16 We now come to the public comment session. 17 MR. KAHN: Carl, can I ask a question? 18 COMMISSIONER WOOD: Sure. 19 MR. KAHN: I'm not familiar with the procedures. 20 Since we have a transcript, are there also 21 minutes done of a meeting like this or some recordation of 22 our decisions or does the transcript suffice? 23 COMMISSIONER WOOD: The transcript should suffice for 24 that purpose. If there's a desire to reduce it to minutes, 25 we can ask staff to do that as well. I think we could do 26 that informally after the meeting if there's some need for 27 it. 28 MR. KAHN: The only thing that I would suggest is PUBLIC UTILITIES COMMISSION, STATE OF CALIFORNIA SAN FRANCISCO, CALIFORNIA 8 1 that we might want people's folders full of decisions we 2 make so you don't have to comb the record for figuring those 3 out. 4 COMMISSIONER WOOD: The court reporter is having some 5 trouble, I think, hearing you. 6 MR. KAHN: Okay. I'm sorry. 7 COMMISSIONER WOOD: Can you repeat that? 8 MR. KAHN: What I was saying was we might want to 9 make some process whereby we keep a record of the decisions 10 we make so that we don't have to comb the transcript for 11 that purpose -- for example, we pass three motions this 12 morning and as we do that -- that way we'll have a separate 13 record of what we do. 14 COMMISSIONER WOOD: Let me suggest that we ask 15 Judge Sullivan to extract from the transcript a list of the 16 decisions that are actually made at the meeting and 17 initially circulate them to the Committee members. And as 18 long as they all sign off on those as consistent with their 19 understanding, we can then make them public. 20 MR. KAHN: That's fine. 21 MR. BJORKLAND: That's a good idea. 22 COMMISSIONER WOOD: Okay. Then we will do that. 23 Next is the public comment session, and we are 24 going to ask that public commenters hold their remarks to no 25 more than three minutes. I'll keep time, and we will invite 26 public comment at this time. 27 Anyone who would like to speak, please step 28 forward to the microphone and kindly identify yourself for PUBLIC UTILITIES COMMISSION, STATE OF CALIFORNIA SAN FRANCISCO, CALIFORNIA 9 1 the record, spell your last name, if you would. 2 Go ahead. 3 STATEMENT OF MR. BLUE 4 MR. BLUE: My name is Greg Blue, B-l-u-e. I'm with 5 Dynegy Generation. I'm here today representing West Coast 6 Power. 7 West Coast Power is a 50/50 joint venture, 8 jointly owned by Dynegy Generation and NRG Energy. We're 9 the owners and operators of -- NRG is the operator of the 10 plants, but -- El Segundo, Long Beach, Encina and the 17 -- 11 the combustion turbines down in San Diego County. 12 West Coast Power, we're really glad to see 13 somebody of the caliber and experience of Mr. Bjorkland. I 14 think that's a really good sign. 15 We also share the concerns of the Committee 16 regarding system reliability in California, but I want to 17 say a couple of facts before we get started; 18 Number one: We have never denied access to a 19 CPUC inspector to our plants; 20 Number two: We've operated our plants at levels 21 that are higher than prudent utility standards -- prudent 22 utility practices standards, excuse me. 23 As far as the ISO standards that are going to be 24 the baseline of which we're starting from, we did 25 participate in the ISO stakeholder process that resulted in 26 these standards. 27 We do have some specific comments about these: 28 These standards were developed back during -- PUBLIC UTILITIES COMMISSION, STATE OF CALIFORNIA SAN FRANCISCO, CALIFORNIA 10 1 different circumstances were going on in the grid than we 2 have now. In fact, our plants were running at unprecedented 3 levels compared to utility ownership. Consequently, this 4 caused unprecedented outages, both planned and unplanned. 5 That's not happening today. I think that's 6 something we need to think about. 7 But as far as the standards themselves, there are 8 some serious -- we've identified some flaws that we think 9 need to be re-looked at; 10 Number one: In the document itself, they come up 11 with a capacity unavailability factor which really focuses 12 on specific units and really doesn't look at the system as a 13 whole. ] 14 There's a formula in there that has a 12-month 15 rolling-average type of thing, and that could really work 16 against you if one year you have -- you want to do some 17 preventative maintenance when you're down for something 18 else, or you have a problem during an overhaul. 19 We also don't think that the standards have 20 enough provisions for different aged plants. 21 There are some new plants that are coming on 22 line; there are some old plants that are near the end of 23 their life. They have different requirements. 24 We're not sure on how, you know, that should -- 25 if they should standardly apply across all plants. 26 We also don't think that there's been adequate 27 provisions for problems associated with startups of new 28 plants similar to -- that goes into that 12-month rolling PUBLIC UTILITIES COMMISSION, STATE OF CALIFORNIA SAN FRANCISCO, CALIFORNIA 11 1 average if you have too many hours down. 2 What we think that really needs to happen is we 3 need to set up standards. And I know we're starting with 4 baseline, but we need to look at incentives here, and I 5 think one of the things we need to do is we need to make 6 sure that plants are not penalized during off-peak hours and 7 are maybe somehow rewarded for being there when they are 8 really needed. 9 For example, our union labor contract right 10 now -- a large portion of the bonuses of our operators is 11 determined based on what we call an in-market availability. 12 So we have -- 13 COMMISSIONER WOOD: Be prepared to wrap up because 14 your three minutes are up. 15 MR. BLUE: Right. But basically that's the end. 16 And we look forward to working cooperatively with the 17 Commission -- with the Committee. Excuse me. 18 COMMISSIONER WOOD: Thank you very much, Mr. Blue. 19 And hopefully with the Commission as well. 20 MR. BLUE: Right. 21 ALJ SULLIVAN: Are there any further public comments? 22 STATEMENT OF MR. WALKER 23 MR. WALKER: Commissioner Wood, members of the 24 Committee, first, thank you for letting us have an 25 opportunity to comment today on the process of the Standards 26 Committee here. 27 My name is Brian Walker, last name spelled 28 W-a-l-k-e-r. PUBLIC UTILITIES COMMISSION, STATE OF CALIFORNIA SAN FRANCISCO, CALIFORNIA 12 1 I work with Reliant Energy. 2 And, as most of you know, we operate the 3 facilities of Etiwanda, Cool Water, Ormond Beach, Mandalay 4 Bay, and Ellwood. 5 I would like to begin by saying many of the 6 comments that we will provide going forward in this process 7 regarding the gas standards echo any events that Mr. Blue 8 said a moment ago. I will not repeat those since he has 9 articulated those very well this morning. 10 I did want to say that Reliant and this Committee 11 does share a common goal which is ensuring a high 12 availability and high reliability operational standards for 13 our facilities. 14 I'd like to say that, in achieving this, we would 15 really encourage the Committee, in adopting the standards, 16 to mirror the national standards that exists under NERC and 17 WECC. 18 We were concerned that if deviation from these 19 standards occurs significantly, that the Committee might end 20 up adopting standards that created an undue burden, 21 basically a patchwork of standards that could exist between 22 California and other areas of the country where most of us 23 that will be participating in this process do business. 24 We would encourage that the standards that are 25 ultimately adopted do mirror the national standards. 26 We would also like to request that, as the 27 Committee goes through this process, thirty- -- the 28 legislation of 39 double X also encourages and authorizes PUBLIC UTILITIES COMMISSION, STATE OF CALIFORNIA SAN FRANCISCO, CALIFORNIA 13 1 the PUC to develop enforcement standards for not just 2 these -- these O&M standards but also for the ISO outage 3 scheduling protocols as defined in the ISO tariff. 4 We would like to encourage the Committee that, 5 once these standards are adopted by the Committee, that the 6 Committee works with the ISO in incorporating these 7 standards into the ISO tariff. 8 The last thing I would like to request really 9 deals with the time line that has been set forth by the 10 Committee. 11 Reliant is very interested in and looks forward 12 to working with this process going forward; however, we're 13 solely concerned about the time frame that we will have to 14 respond. 15 The holidays begin next week; these draft 16 standards came out, I believe, last night electronically. I 17 didn't receive them until this morning via hardcopy here. 18 And we're concerned that, given the holiday schedule and the 19 first comment period on January the 10th, that that is going 20 to lack -- give the parties involved in this -- is going to 21 really take away from the meaningful comments that we can 22 provide going forward. 23 We would encourage the Committee to consider an 24 extension of the time frame. We're not asking for anything 25 to be long, we're not asking for this process to be drawn 26 out unduly, but just an opportunity to get back some of the 27 time that's lost during the holidays as folks are on 28 vacation. PUBLIC UTILITIES COMMISSION, STATE OF CALIFORNIA SAN FRANCISCO, CALIFORNIA 14 1 Again, I would like to thank you all for your 2 time. I look forward to working with you and the Commission 3 going forward in this process. 4 And if I can answer any questions for you at any 5 time, don't hesitate to ask. 6 Thank you. 7 COMMISSIONER WOOD: Thank you, Mr. Walker. 8 Any further public comment? 9 (No response) 10 ALJ SULLIVAN: Going once, going twice? 11 Okay. Thank you. 12 MR. SKAFF: Your Honor, just one comment. 13 COMMISSIONER WOOD: Would you please step up to the 14 microphone. 15 STATEMENT OF MR. SKAFF 16 MR. SKAFF: Andy Skaff of the Energy Law Group, here 17 for -- also for IEP, and we'd like to echo the comment about 18 the time line and the short period given the holidays for 19 addressing what is a very complex and intricate document. 20 Thank you. 21 COMMISSIONER WOOD: Okay. Thank you. 22 Could you please spell your last name for the 23 court reporter. 24 MR. SKAFF: S-k-a-f-f. 25 COMMISSIONER WOOD: Thank you. 26 STATEMENT OF MR. LIVINGSTON 27 MR. LIVINGSTON: Good morning. 28 Randy Livingston with Pacific Gas and Electric. PUBLIC UTILITIES COMMISSION, STATE OF CALIFORNIA SAN FRANCISCO, CALIFORNIA 15 1 That's L-i-v-i-n-g-s-t-o-n. 2 My background has been with -- with all power 3 generation: I worked at many of the divested -- at all of 4 the divested fossil and geothermal facilities in the Pacific 5 Gas and Electric system. 6 A couple of quick comments here. 7 Our review of most of in of the statements 8 revealed a few common themes that we saw. Some of those 9 themes are that many generators in California are already 10 subject to a variety of operating and maintenance standards. 11 We would ask that the standards adopted by the 12 Committee be mindful of some of the existing standards and 13 regulations in place; that we attempt to avoid either 14 conflict or duplication with existing standards; that they 15 be fair and flexible and recognize the different 16 technologies of the generation in California that exists, be 17 it very complex, or very simple, all -- all provide 18 reliability to the system, and that we develop standards 19 that we can realistically enforce and we have the skills and 20 experience to do. 21 I think we need to -- need to recognize that 22 different types of generating facilities need different 23 treatment, be they nuclear, be they fossil, geothermal, or 24 hydro. There is existing, fairly detailed oversight of 25 certainly the FERC licensed hydro and the NRC licensed 26 nuclear facilities in the state. 27 We would also like to echo the comment on time 28 line so that we make sure that this matter gets the PUBLIC UTILITIES COMMISSION, STATE OF CALIFORNIA SAN FRANCISCO, CALIFORNIA 16 1 attention it deserves, and, know that, we recognize vary- -- 2 varying enforcement ability of all the different -- all the 3 different folks represented here. 4 So thank you very much. 5 ALJ SULLIVAN: Excuse me. What dates do you propose? 6 What alternative dates? 7 MR. LIVINGSTON: I don't have an alternative date 8 right now. 9 I think we need to just recognize that there -- 10 that we get sufficient time for comments. 11 I don't imagine that that's going to take more 12 than an additional 30 days or so, but that we -- that we 13 do -- that we do have sufficient time to discuss the 14 comments that are developed in this time frame. 15 COMMISSIONER WOOD: Okay. Thank you, Mr. Livingston. 16 Are there any further public comments? 17 (No response) 18 COMMISSIONER WOOD: Seeing none, we will move on to 19 the next agenda item. 20 Let me check, first of all, that Michael Kahn is 21 still on the phone. 22 MR. KAHN: Yes, sir, I am; and I could hear all the 23 comments. Thank you. 24 COMMISSIONER WOOD: Great. Thank you. 25 So at this time we'll recognize Phil Pettingill 26 from the Independent System Operator staff to present the 27 Draft Maintenance Standards. 28 Phil? PUBLIC UTILITIES COMMISSION, STATE OF CALIFORNIA SAN FRANCISCO, CALIFORNIA 17 1 STATEMENT OF MR. PETTINGILL 2 MR. PETTINGILL: Good morning, Commissioner Wood and 3 the rest of the Committee. 4 MR. KAHN: Phil, before you begin, can you tell me 5 approximately how long you think your presentation will 6 take? 7 MR. PETTINGILL: Yeah, I was going to do that, 8 Michael. 9 This presentation is approximately 15 minutes. 10 I have about 17 slides, so I'm going to go 11 relatively rapidly. 12 MR. KAHN: Great. I have those slides. 13 MR. PETTINGILL: Okay. Excellent. 14 MR. KAHN: Commissioner Wood, just for your planning 15 purposes, I need to step out of the room at 10:00 o'clock 16 for a few minutes, so that if there are some things you want 17 to be sure to get voted on, you might want to think about 18 that, although it seems to me that we -- you and 19 Mr. Bjorkland can make votes since your two out of the three 20 Committee members, but I wanted to alert you of my problem. 21 COMMISSIONER WOOD: Well, why don't we move to the 22 next agenda items, perhaps, hold this item for after we take 23 care of the other business? 24 I don't think anybody's going to be 25 inconvenienced by rearranging the schedule a little bit. 26 MR. KAHN: Okay. I think that's a very good idea, 27 especially since I've -- I've read and seen Phil's 28 presentation already. PUBLIC UTILITIES COMMISSION, STATE OF CALIFORNIA SAN FRANCISCO, CALIFORNIA 18 1 COMMISSIONER WOOD: Okay. 2 Let's move to the procedure for receiving 3 comments; and for that I'll hand it over to Judge Sullivan. 4 ALJ SULLIVAN: Okay. Thank you very much, 5 Commissioner Wood. 6 What I propose as the procedure for receiving 7 comments is basically the establishment of an e-mail service 8 list or quasi-service list, since this is just the 9 Committee's work, and in which people would send an e-mail 10 to everybody on the list of their comments; then five days 11 later the reply comments would be sent to the same -- same 12 list as well. 13 That list will be produced following the close of 14 this meeting. I expect, though, that it will take a couple 15 of days and will probably appear on the Commission's website 16 under, as a Service List under this proceeding about -- 17 before January 1st for sure. 18 So the procedure for receiving comments is 19 basically just to e-mail the comments to everybody on the 20 list. 21 I will be on the list as will be 22 Commissioner Wood, Chairman Kahn, and Glenn Bjorkland. 23 And it seems to me that that would be a fairly 24 expeditious procedure for receiving these comments. 25 Are there any public comments on this? 26 Or, the Committee, is this acceptable to the 27 Committee? 28 Well, let's, I guess, begin by taking -- you -- PUBLIC UTILITIES COMMISSION, STATE OF CALIFORNIA SAN FRANCISCO, CALIFORNIA 19 1 you Chair. 2 COMMISSIONER WOOD: Sure. 3 Well, first I'll ask for comment from the 4 Committee members. 5 Mike Kahn, do you have any comments? 6 MR. KAHN: No. That sounds fine to me. 7 MR. BJORKLAND: No, I found e-mail a very expeditious 8 way in which can we can communicate. 9 COMMISSIONER WOOD: Okay. 10 What about people who are in the audience, or 11 staff people, for that matter, any comment on this? 12 MS. GARDNER: I have a question -- 13 COMMISSIONER WOOD: Yes. 14 MS. GARDNER: -- regarding the service. 15 So the comments will not be filed with the clerk, 16 they'll just be served electronically; is that -- 17 COMMISSIONER WOOD: First, can you identify 18 yourself -- 19 MS. GARDNER: I'm sorry. 20 My name is -- 21 COMMISSIONER WOOD: And maybe -- come up to the 22 microphone, if you will, so that Mr. Kahn can hear you. 23 MS. GARDNER: Good morning. 24 My name is Sylvia Gardner. I work with PG&E. 25 I'm case coordinator on this case, and my interest is 26 regarding the service of the comments and filing. 27 I'd like to know will these comments be filed 28 with the clerk in addition to being served to the Service PUBLIC UTILITIES COMMISSION, STATE OF CALIFORNIA SAN FRANCISCO, CALIFORNIA 20 1 List? 2 ALJ SULLIVAN: Thank you. 3 My intention was not to have them filed with the 4 clerk, only to be sent to the Service List. 5 MS. GARDNER: Thank you. 6 COMMISSIONER WOOD: Any other questions or comments? 7 (No response) 8 ALJ SULLIVAN: Okay. Seeing none, I'll accept the 9 motion to adopt the procedure as described by Judge 10 Sullivan. 11 MR. KAHN: So moved. 12 MR. BJORKLAND: And seconded. 13 COMMISSIONER WOOD: Okay. It's been moved by 14 Mr. Kahn, seconded by Mr. Bjorkland to adopt those -- that 15 procedure. 16 The vote of Mr. Bjorkland? 17 MR. BJORKLAND: Aye. 18 COMMISSIONER WOOD: Mr. Kahn? 19 MR. KAHN: Aye. 20 COMMISSIONER WOOD: I vote aye as well, so it's 21 unanimous. 22 Next, the schedule for adoption of maintenance 23 standards. 24 ALJ SULLIVAN: ALJ Sullivan speaking again. 25 I have developed a schedule to serve the wishes 26 of the Committee. 27 I understood that there was an intention of the 28 Committee to review the comments at the next public meeting PUBLIC UTILITIES COMMISSION, STATE OF CALIFORNIA SAN FRANCISCO, CALIFORNIA 21 1 on January 24th and then to accept them on February 3rd. 2 I created two dates in the schedule -- I'm now 3 going from memory -- but I believe it was January 10th for 4 the receipt of the opening comments and January 15th for 5 receipt of the reply comments. The goal was to have them in 6 advance of the 24th meeting in which they would be 7 discussed. 8 That's the procedure. I developed it to serve 9 the Committee. If there's a desire to change in response to 10 any of the comments you've heard, we can certainly do that. 11 MR. KAHN: Judge Sullivan, I have a question. 12 Are there some statutory or regulatory 13 restrictions on us such that we set a meeting day on January 14 24th, we have to have comments due at some time in advance, 15 or can we have the comments closer in time to the meeting if 16 we wish? 17 ALJ SULLIVAN: It's certainly possible to have the 18 comments closer in time to the Committee -- to the Committee 19 meetings; the cost of that will be probably less familiarity 20 on the part of the staff and probably less pointed questions 21 from all involved. ] 22 Clearly, there's no requirement that they be sent 23 in in advance of the meeting. They could even be sent in 24 the day of the meeting or presented orally. Those are just 25 the dynamics. If you want another procedure, it's easy 26 enough to come up with. 27 COMMISSIONER WOOD: Any comments from the Committee 28 members, first of all? PUBLIC UTILITIES COMMISSION, STATE OF CALIFORNIA SAN FRANCISCO, CALIFORNIA 22 1 From the audience then, I see Mr. Blue had his 2 hand up. 3 Can you step up to the microphone, please. 4 MR. BLUE: I was wondering if you could explain, or 5 somebody, what's driving the February date. First, the 6 critical time in my opinion is the summer peak months. 7 COMMISSIONER WOOD: I think that what's driving it is 8 a desire to get some standards in place quickly so 9 everything knows what rule book we're playing from. 10 Certainly, if we suddenly have a set of standards appear on 11 June 1st, that might create some discomfort from the 12 operators of some of the generation. 13 MR. BLUE: I agree. 14 ALJ SULLIVAN: Mr. Kahn? 15 MR. KAHN: Well, all I was really going to say, Carl, 16 is that I hope making you chairman doesn't deprive us of 17 what you think. At least in my board, the chair is not 18 reticent to express his views. I'd like to know what you 19 think about this to get some guidance. 20 COMMISSIONER WOOD: What I think is that perhaps we 21 should build some flexibility into the schedule. Typically 22 in a Commission proceeding there's an Assigned Commissioner 23 who, in consultation with the Administrative Law Judge, can 24 make modifications in procedural schedules. 25 And what I would suggest in this case is that 26 perhaps one of the Committee members be designated to 27 consult with Judge Sullivan and figure out what kind of 28 adjustment to the schedule might be appropriate. PUBLIC UTILITIES COMMISSION, STATE OF CALIFORNIA SAN FRANCISCO, CALIFORNIA 23 1 MR. KAHN: So we would keep the schedule as set 2 forth, but if, say, you were the Committee person designated 3 and Judge Sullivan got written requests from Mr. Walker, 4 Mr. Blue, the IEP saying, "We really need more time," then 5 you could decide to push the schedule out further? 6 COMMISSIONER WOOD: That's right. 7 ALJ SULLIVAN: Let me comment. 8 This is Administrative Law Judge Sullivan. 9 Basically, as I see it, based on what I've heard 10 today, there's two issues: One is changing the dates for 11 the filing of comments while keeping the two meeting dates. 12 If you do that, you can move things five, six days, which is 13 one option. 14 The other thing that's been raised has been the 15 idea of 30 days to provide comments on the proposed 16 standards. If you do that, you will have to reschedule the 17 meetings. Those are basically the two issues. 18 I don't know if it makes sense to the Committee 19 to discuss them as a whole or whether to receive comments, 20 but I just wanted to make sure that those were the two 21 choices to have in mind. 22 MR. KAHN: Was that Judge Sullivan? 23 ALJ SULLIVAN: Yes. 24 MR. KAHN: Judge Sullivan, what occurs to me is I 25 hear the individuals saying they want more time, and I 26 understand that. That makes sense to me. But I would like 27 to require everybody to at least take a first cut at this 28 and look at it and think about it by January 10th. PUBLIC UTILITIES COMMISSION, STATE OF CALIFORNIA SAN FRANCISCO, CALIFORNIA 24 1 And if people do that and they genuinely feel 2 that they want more time to write something more 3 comprehensive or to do more investigation, then I would like 4 Commissioner Wood and you to have the discretion to give 5 more time. 6 What I don't want to do is flip the dates now, 7 because given what the natural tendency of people are, is 8 that all we'll really do is flip the time before they come 9 to grips with this. 10 ALJ SULLIVAN: Mr. Bjorkland, do you have any 11 comments? 12 MR. BJORKLAND: Well, I would agree with that. 13 I think we want to be as receptive as we can to 14 the comments that I heard from the participants. They seem 15 to be favorable to the standards and the work that went into 16 it. But I'm a little concerned about giving quality 17 comments, and I think to the degree we can, I want to be as 18 receptive to that as possible and still meet a tight time 19 schedule. 20 COMMISSIONER WOOD: We have a motion that was made by 21 Mr. Kahn to designate me and the Judge to work together to 22 make appropriate adjustments to the comments schedule. 23 MR. BJORKLAND: And I second that motion. 24 COMMISSIONER WOOD: Did I phrase that right, Mike? 25 MR. KAHN: Yes, sir. You got it perfect. 26 COMMISSIONER WOOD: Fine. Then we'll vote on it. 27 Mr. Bjorkland. 28 MR. BJORKLAND: Aye. PUBLIC UTILITIES COMMISSION, STATE OF CALIFORNIA SAN FRANCISCO, CALIFORNIA 25 1 COMMISSIONER WOOD: Mr. Kahn. 2 MR. KAHN: Aye. 3 COMMISSIONER WOOD: And I vote aye as well, so that's 4 carried. 5 ALJ SULLIVAN: Just as a procedure, we will send it 6 by an electronic ruling, any changes in schedule, and you'll 7 receive it via e-mail. 8 COMMISSIONER WOOD: Okay. 9 Yes, there's somebody that wants to be 10 recognized. 11 STATEMENT OF MR. HANSCHEN 12 MR. HANSCHEN: Good morning. I'm Peter Hanschen from 13 Morrison & Foerster representing AES. 14 I have a question on the procedure for receiving 15 comments and how they interact with the proposed schedule of 16 reviewing the comments and then adopting the final comments. 17 And that is, I take it, at least under the proposed 18 schedule, that the Committee will review the comments on the 19 24th and at that time you will have some sort of staff 20 recommendation based on the written comments that were 21 received by the submitting parties. 22 And the question that I would have is; one, will 23 the staff recommendations be in writing and available ahead 24 of time; and two, will the procedure be adopted where the 25 parties will be allowed to comment on the recommendations 26 being made to the Committee by the staff at that time? 27 COMMISSIONER WOOD: I think that we haven't made a 28 decision on that as yet, and that's probably an appropriate PUBLIC UTILITIES COMMISSION, STATE OF CALIFORNIA SAN FRANCISCO, CALIFORNIA 26 1 issue to address in your comments, how that should be dealt 2 with, if it would be helpful to, for example, be able to see 3 something in writing from staff and whether it would be 4 useful to have reply comments. 5 MR. HANSCHEN: So then my understanding is that the 6 comments that would be submitted are not only on the 7 standards but on the procedures for adopting the standards. 8 COMMISSIONER WOOD: That's right. 9 MR. KAHN: Yeah, Peter, who do you represent? 10 MR. HANSCHEN: AES. 11 MR. KAHN: You know, we would welcome your input on 12 any level of this. We're just trying to figure out how to 13 put this together, and I think Carl and Judge Sullivan have 14 done a good job of doing it. But if you think we should do 15 things in a different way, we'd be happy to hear from you. 16 And second of all, there will always be public 17 comment at our meetings, so if we've made a mistake, then 18 you'll have plenty of opportunity in those situations to 19 chime in. 20 And as you see, Carl is very liberal in his 21 recognizing people from the audience in the course of the 22 discussion, so I think you'll find a course. 23 MR. HANSCHEN: That's fine. 24 My point, I think it would be very, very useful 25 to have an opportunity to comment on the recommendations 26 that are being made to the Committee. I assume the 27 recommendations would be prepared by the staff. 28 COMMISSIONER WOOD: Judge Sullivan. PUBLIC UTILITIES COMMISSION, STATE OF CALIFORNIA SAN FRANCISCO, CALIFORNIA 27 1 ALJ SULLIVAN: Yes, I had some preliminary thoughts 2 since obviously what I have to do is assist people in making 3 the decision. 4 It seemed to me that what would happen if we 5 maintain the current schedule would be at the 24th we would 6 have the comments, we would review the comments, and then 7 what we would probably do is reach some preliminary 8 determination that certain alternatives would need to be 9 considered. 10 The alternatives would then be presented at that 11 last meeting, discussed and then voted upon, and as we end 12 the meeting we would have the set of maintenance standards. 13 What I haven't thought through is exactly how 14 that would happen, what the form would be, how those 15 alternatives would be presented and how publicly they would 16 be available, how public comment would be incorporated. 17 I think these are the issues that the gentleman 18 from AES was raising, and I'd welcome any concrete thoughts 19 on exactly how that would take place. 20 COMMISSIONER WOOD: Yes. 21 STATEMENT OF MR. KERNER 22 MR. KERNER: Thank you, Commissioner Wood, 23 Douglas Kerner, one of the lawyers for Duke Energy North 24 America. 25 You may want to follow it up on this direct 26 point, your Honor: 27 You may want to -- one of the protocols 28 frequently utilized by the Energy Commission, for example, PUBLIC UTILITIES COMMISSION, STATE OF CALIFORNIA SAN FRANCISCO, CALIFORNIA 28 1 is to issue, following the comment period, is a proposed 2 draft set of standards or something like that upon which 3 there would be a further opportunity for review and comment. 4 That might solve everybody's difficulty. 5 So that when the 24th or whatever the date is 6 that it turns out to be, you'd have proposed standards, 7 everybody gets to weigh in and see how it went and how did 8 you do dealing with the comments in their view, which would 9 lead then to a subsequent determination on the standards 10 themselves. Just an idea. 11 ALJ SULLIVAN: Thank you very much for the 12 suggestion. 13 COMMISSIONER WOOD: Mr. Kerner, can you spell your 14 last name? 15 MR. KERNER: Yes, sir, K-e-r-n-e-r. 16 COMMISSIONER WOOD: Mr. Blue. 17 MR. BLUE: Hi, Greg Blue again, just a quick comment. 18 I'm not a lawyer. And comments are good, and 19 reply comments and comments on somebody else's comments and 20 drafts and all that, but I think it would be most productive 21 if there was some way we could have a meeting, have our 22 plant guys come out, meet with staff, meet with 23 Mr. Bjorkland, have some sort of a dialogue on some of this 24 stuff. 25 I think it would be a lot better feedback from us 26 than what you're just going to read on a piece of paper. If 27 that could be facilitated, that would be great. 28 COMMISSIONER WOOD: Thank you. PUBLIC UTILITIES COMMISSION, STATE OF CALIFORNIA SAN FRANCISCO, CALIFORNIA 29 1 Yes. 2 STATEMENT OF MR. LIVINGSTON 3 MR. LIVINGSTON: Greg Livingston, Pacific 4 Gas and Electric. 5 My comment on the additional time, I think we 6 should be held to the standards of getting our comments out. 7 We're -- much, much of industry has seen much of what's in 8 this document before and are familiar with it. 9 I think the real time needs to be spent in 10 looking at how the comments come back and how revisions need 11 to be made and put some focus there. I think the time frame 12 you describe heading up to the 24th is good. As we think 13 about how we're going to address those comments and write 14 any changes to the standards and have time to review, that's 15 where the focus needs to be. 16 COMMISSIONER WOOD: Okay, thank you. 17 Further comments? 18 (No response) 19 COMMISSIONER WOOD: I would just note maybe to 20 complete a reply to a previous question about what is 21 driving debates on this that the adoption of maintenance 22 standards is only a piece of our work. 23 We also have to adopt operations standards as 24 well. And I think that's going to be a much more 25 challenging task because the preliminary work has not been 26 done for operations standards as it has been done through, 27 as I understand, a very extensive process that was overseen 28 by the ISO. PUBLIC UTILITIES COMMISSION, STATE OF CALIFORNIA SAN FRANCISCO, CALIFORNIA 30 1 I think we need to get that on -- the goal there 2 would be to have some operating standards in place in time 3 for the peak season of next year. 4 We would like to try to put the maintenance 5 standards to bed pretty expeditiously without trampling on 6 anybody's rights. The adoption of the maintenance standards 7 is not the end of the process here. It's one of the 8 mileposts that we have to go past. 9 Any further comments on this item? 10 Yes, Mr. Kerner. 11 MR. KERNER: I'm not -- we're not -- we filed 12 prehearing conference statements. I'm not saying a lot -- 13 I'm not fully understanding what the content and scope of 14 the determination of operating standards is. As our 15 understanding is, those are matters that are currently 16 tariffed already under the FERC-approved ISO standards. 17 So I'm interested in your observation that we 18 need to deal with those other than through, obviously, 19 enforcement provisions which is clearly laid out. 20 COMMISSIONER WOOD: Well, I think you have to look at 21 the statutory requirement in SB 39 2X, and you can read into 22 that whatever you will. 23 The fact is we haven't gotten to it yet. We 24 haven't fleshed out what would be involved in establishing 25 operating standards. 26 But clearly, the State law did direct this 27 Committee to adopt standards for operations, and it didn't 28 make reference, as far as I can recall, to ISO or FERC PUBLIC UTILITIES COMMISSION, STATE OF CALIFORNIA SAN FRANCISCO, CALIFORNIA 31 1 standards that presently existed. So clearly, the 2 Legislature contemplated that we do something independent of 3 that. 4 Whether it's the same or whether it's more 5 extensive or less extensive is yet to be decided. So I 6 wouldn't speculate on that at this point. 7 Any of the other Committee members have any 8 response to that? 9 MR. KAHN: No, I agree with what you said, Carl. 10 Thank you for saying it. 11 COMMISSIONER WOOD: Okay. Then I think we don't need 12 any formal action from the Committee on this item. 13 The next item on the agenda is an explanation of 14 the interaction of Committee process and the Commission's 15 Order Instituting Rulemaking, the OIR. 16 And I think to some extent this is described in 17 the Administrative Law Judge's ruling in that rulemaking, 18 which I believe has been provided at the table and has been 19 provided to all of the Committee members. 20 Essentially, the law requires that the Commission 21 implement and enforce maintenance standards that will be 22 adopted by this Committee and also to provide the Committee 23 with support. 24 So the preliminary work of actually establishing 25 the standards has to be done here. However, in order to 26 make those standards enforceable by the Commission to make 27 them rules of the Public Utilities Commission, there has to 28 be a rulemaking process. That process has been initiated, PUBLIC UTILITIES COMMISSION, STATE OF CALIFORNIA SAN FRANCISCO, CALIFORNIA 32 1 it will be conducted in accordance with Commission rules as 2 we do any other rulemaking. 3 And that, among other things, will require that 4 the proposed standards that come out of this Committee be 5 sunshined and be submitted for comment by members of the 6 public and interested parties. 7 I don't really have a lot to describe beyond 8 that. If there are questions about this procedure, then 9 people could raise them now and probably they'll get more 10 expert responses from Judge Sullivan than from me, but we'll 11 certainly attempt to address those questions. 12 Okay, I don't see any questions. I know that 13 there are some experienced practitioners before the 14 Commission who are here in the audience, so probably you're 15 more familiar with Commission procedures than the procedures 16 that we're evolving here in this Committee. 17 So with that, that completes all of the items on 18 the agenda except for the presentation of the draft 19 maintenance standards. And I think this allows Mr. Kahn to 20 go to his meeting that he has now. 21 MR. KAHN: Thank you very much, Commissioner Wood. I 22 really appreciate your indulgence, and I will return as soon 23 as I can if you're still going. In any event, I have read 24 all the material on this and I'm actually very familiar with 25 it. 26 So thank you, and if I don't talk to you before, 27 I hope all of you have a nice holiday. 28 COMMISSIONER WOOD: Okay, same to you. PUBLIC UTILITIES COMMISSION, STATE OF CALIFORNIA SAN FRANCISCO, CALIFORNIA 33 1 It's been suggested that we take a couple minutes 2 recess so people can grab coffee and then we can 3 reassemble and hear the presentation. And having received 4 an infusion of caffeine, we'll be all that much more alert. 5 So we will recess for 15 minutes. 6 (Recess taken) 7 COMMISSIONER WOOD: We'll be back in order. 8 I believe that Committee Member Kahn is not 9 present at this time, but we have a quorum present, and 10 therefore, we will proceed with the agenda. 11 The sole agenda item before adjournment, I 12 believe, is the presentation of the draft maintenance 13 standards. And for that purpose I'll recognize 14 Phil Pettingill. 15 STATEMENT OF MR. PETTINGILL 16 MR. PETTINGILL: Thank you, Carl. 17 What I'm going to do this morning is to walk 18 through, as I mentioned earlier when Michael was on the 19 line, a presentation that will probably take about 15 and 20 maybe 20 minutes. It's about 17 slides. 21 What I'd like to do for you today is walk through 22 conceptually how were these original standards created under 23 at least the auspices of the ISO, the fact that we were 24 responding to the energy crisis in late 2000 and early 2001, 25 that we have worked together with CPUC staff and our own 26 internal staff to go back and review these standards in the 27 context of the new legislation and that we certainly 28 understand that while the CPUC has its enforcement PUBLIC UTILITIES COMMISSION, STATE OF CALIFORNIA SAN FRANCISCO, CALIFORNIA 34 1 authority, they may find that there are additional elements 2 to these standards. 3 So we see this also, as it's been characterized 4 this morning, as a starting point. So that what I believe 5 right now is that this is that good starting point, and what 6 I want to do is walk through it in at least sufficient 7 detail so you, the Committee members, can understand 8 conceptually where we are. And so use this in your 9 consideration and deliberations as you go forward. 10 A brief background on myself: My role at the ISO 11 now is to help formulate new policy. I came to the ISO five 12 years ago and my principal role there was the manager of 13 maintenance standards that all the transmission facilities 14 are subject to. 15 So I would offer that what I'm providing to you 16 today is at least some significant knowledge in regards to 17 maintenance theory and practices across the country. Okay. 18 So with that beginning, in today's program what I 19 want to do is review, first of all, what our objective was 20 in designing the standards, basically what the design 21 principles were and then finally go into some of the 22 content. And I'll provide you at least some -- a summary of 23 some of the original feedback we had almost two years ago 24 now. 25 The objective of this program was to provide a 26 comprehensive program that was focused on trying to ensure 27 the capacity and reliability of California's electric 28 generation resources. PUBLIC UTILITIES COMMISSION, STATE OF CALIFORNIA SAN FRANCISCO, CALIFORNIA 35 1 And what I've pointed out here for you is that 2 what we are focused on is how to promote generator 3 availability, then also create an objective measure of how 4 those generators were performing and what was the likelihood 5 of capacity that they were able to provide into the 6 marketplace, a confirmation of whether there was, at least 7 an ongoing maintenance program and also the beginnings and 8 mechanisms to enforce compliance with this program. 9 With that in mind, we outlined these principles 10 to set up the program: benchmarking performance and focusing 11 on the maintenance effectiveness in terms of providing the 12 energy capability of the units, definitely focusing on an 13 objective measure, and in order to do that, we needed to 14 establish a common data standard. 15 And what we opted to do was to adopt NERC GADS 16 data format. 17 We also needed to recognize the diversity, and 18 you've heard some of that today in the earlier public 19 comments. And so I believe what you'll see as I walk 20 through this is we've made an attempt, a fairly significant 21 one, to recognize that there is diversity across the 22 portfolio generators that we're talking about. 23 The generic standards do establish scalable and 24 allow for the fact that there may be smaller-size generators 25 and larger-size generators, so I'll touch on how we've 26 addressed that issue as well. 27 And I think the last one I wanted to share with 28 you is that we did focus on the idea that we need to allow PUBLIC UTILITIES COMMISSION, STATE OF CALIFORNIA SAN FRANCISCO, CALIFORNIA 36 1 the generator owners, as they've mentioned again today, to 2 work on self-improvement and their own monitoring and how do 3 they make sure that they're providing the availability and 4 reliability of the resources. 5 So with those design principles what we did is 6 develop a maintenance program that, as I mentioned earlier, 7 is fairly comprehensive. 8 So I'm going to go through these first four items 9 in a little bit more detail: The performance standards and 10 how to assess those standards; the generation performance 11 metrics, and then the last two here, verification and audit 12 process and at least, as I mentioned earlier, the beginnings 13 of a penalty-type process itself. 14 I want to highlight the last bullet here: We 15 also put into this package a set of maintenance guidelines. 16 And the concept here was to provide additional information 17 for generation owners in regards to what we were thinking, 18 what's the background behind a good set of maintenance 19 practices and to give them some additional or supplemental 20 information, if you will, that, of course, they were not 21 necessarily subject to the provisions of the standard but 22 would be helpful information as an appendix to the standard. 23 So, starting on that first piece, the performance 24 standards and assessment guidelines: 25 What we did here is established 18 qualitative 26 standards. And the concept here is to focus on these 18 27 pieces that would be -- should be in existence in regards to 28 a good management program for conducting a reasonable and PUBLIC UTILITIES COMMISSION, STATE OF CALIFORNIA SAN FRANCISCO, CALIFORNIA 37 1 appropriate maintenance on what we recognize were some very 2 complex and sophisticated facilities. 3 But to the extent that each of these 18 elements 4 were applied proportionately, depending on the complexity of 5 this facility, that they would constitute a fairly good 6 management program and a reasonable set of maintenance being 7 conducted. 8 So we then had to, once we outlined what those 18 9 elements were, establish an assessment guideline: How do we 10 know what's good and what's poor? And this is what we've 11 tried to do in this particular set of standards. 12 To give you a feel for this, here are the 18 13 elements. And it is a comprehensive list. We acknowledge 14 that. 15 I do need to share with you that this set of 16 standards at least started from the nuclear industry in 17 regards to what comes from their plant operation standards. 18 We took some of those out because we didn't feel 19 that they were appropriate and applicable to the primarily 20 thermal assets that we're talking about here, but certainly 21 the ideas of work management and how maintenance tasks are 22 identified, tracked and confirmed, that they're conducted 23 within the plant, the ideas around spare parts and assurance 24 that there are spare parts for the critical assets. 25 These are things that, when we looked at, were 26 essential in regards to, again, characterizing a good 27 maintenance program. ] 28 The next major category is the performance PUBLIC UTILITIES COMMISSION, STATE OF CALIFORNIA SAN FRANCISCO, CALIFORNIA 38 1 metrics. And I want to share with you -- this is -- this 2 gets into some fairly sophisticated statistics. I don't 3 intend to try to touch on that today. It does require some 4 reading in the standards to try to understand it. But I 5 think these are the key points that I wanted to share in 6 terms of our design of the standards. 7 First of all, it's essential to have a defined 8 data standard. How will generator owners collect the data 9 and how will they communicate it to whomever the 10 enforcements agent is in regards to implementing a set of 11 standards like this? 12 Next, we end up with the issue of, once you know 13 what the data is, then what's the performance indicator? 14 What's the metric that we want to use? 15 And we came up with a new term, the Capacity 16 Unavailability Factor. 17 Now, this is not new in the sense of the 18 industry. 19 NERC has a number of statistical measures for 20 different generators, and they have a formula which is 21 called the Equivalent Unavailability Factor, and the CUF is, 22 in fact, identical to that. 23 The reason we renamed it is because there are 24 some other terms in the NERC definition that are other 25 statistical values that they have. 26 What we wanted to do was break those statistical 27 values down so it's very clear what are the elements that 28 are included in CUF, and we show -- we show those specific PUBLIC UTILITIES COMMISSION, STATE OF CALIFORNIA SAN FRANCISCO, CALIFORNIA 39 1 elements in the detailed standards. 2 But mathematically what we're calling now the CUF 3 is identical to NERC GADS EUF. 4 The next issue was how to establish the 5 benchmark. 6 Now we know what the metric is, the question, of 7 course, is a determination of good and poor performance. 8 And so what we did next was to identify how do 9 you take the CUF and do some statistical calculations to say 10 what's good and poor performance. And in doing that we had 11 to recognize that some plants may not be operational over a 12 period of time. And we heard about that earlier today. 13 Some plants are new and have no historical basis; some 14 plants have been around a long time, may be old, may have 15 already some sort of diminished capacity, and so we needed 16 to understand that; and, of course, finally, the third major 17 category here is to recognize that there may be new 18 technologies, brand-new generators for which the -- we have 19 no basis to determine what their performance expectation 20 might be. 21 And so what we did is propose that they tell us 22 what is the performance measure or standard that they would 23 hope to achieve. 24 And finally in here what we need to do is 25 establish how is the data collected. And, again, NERC helps 26 us in regard to the collection of data in real-time, and 27 then finally providing that data; and so these are the key 28 pieces in performance metrics. PUBLIC UTILITIES COMMISSION, STATE OF CALIFORNIA SAN FRANCISCO, CALIFORNIA 40 1 If we drill down a little bit, what we're using, 2 then, are what are called control charts to establish the 3 performance thresholds and determine what is good and poor 4 performance. 5 Control charts actually come from primarily 6 manufacturing theory where, if you were going to run a 7 process and you would find that you have certain constraints 8 on the process, from time to time the process may need to be 9 recalibrated or corrected. 10 And what you need to know is at what point do you 11 get outside those constraints? 12 Control charts allow us to do this because we can 13 look at historical data, say what has the unit been doing 14 historically, and then set up expectations for what it 15 should be able to do on a going-forward basis. 16 So I'll show you a control chart here in just a 17 minute. 18 So the concept here is we would take and use 19 primarily historical data, define the ranges of expected 20 performance, and then plot that data in these control 21 charts; and then we would use statistical tests to verify 22 whether we have got short-term jumps, short-term shifts, or 23 long-term trends in regards to the performance of this -- of 24 the asset. 25 So we're using, then, now, data of the particular 26 unit in order to measure its overall performance. And this 27 helps resolve the issue of comparing units against a larger 28 population because certainly the issue that we recognized is PUBLIC UTILITIES COMMISSION, STATE OF CALIFORNIA SAN FRANCISCO, CALIFORNIA 41 1 not all generators are going to be able to achieve some, 2 quote, unquote, average level. 3 If we put them together even in a homogeneous 4 group, some of them will be above average, some of them will 5 be below average, and so it made sense to try to compare the 6 units against their own performance. 7 So why did we use this CUF? 8 Well, first of all, what CUF does is it focuses 9 on capacity, and it focuses on how much capacity have we 10 potentially lost because it's the unavailability factor. 11 The other piece is, in this particular 12 statistical metric, is it focused primarily on almost all 13 elements that are directly controllable by the maintenance 14 program. 15 And then, finally, we get into the fact that the 16 denominator is basically a period of time, and so, as 17 a result, it's not affected by maintenance. 18 NERC recognizes that generators will have ambient 19 adjustments to them and or other sort of seasonal 20 adjustments that are necessary, and the NERC GADS statistics 21 allow for adjustments to those factors. 22 For example, there may be fuel restrictions: 23 Hydro units may lack water, thermal units may have problems 24 with obtaining fuel or have omission constraints, and NERC 25 GADS data standards allow for identifying those kinds of 26 constraints on the unit. 27 One of the pieces I want to share with you I 28 mentioned earlier about the CUF being different, at least in PUBLIC UTILITIES COMMISSION, STATE OF CALIFORNIA SAN FRANCISCO, CALIFORNIA 42 1 name, than NERC GADS. I have had some recent conversations 2 with the senior managers at NERC, and they would acknowledge 3 that to avoid this difference in naming terminology, they 4 would be willing to change some of their documentation so 5 that, in fact, it does detail all of the elements and we can 6 actually adopt a national standard in terms of the exact 7 terminology, the exact calculation. Okay. 8 So does it necessarily have to be CUF? 9 It could be NERC GADS EUF. 10 Real briefly, what I wanted to share with you 11 here is now how does the control-chart mechanism work? 12 What we would do is take the historical data, and 13 what we have proposed in the program is five years of 14 historical data, we would look at the -- the proponent -- 15 the components of CUF and calculate that -- and those 16 components are things that are really all outages, whether 17 they be unplanned or planned, whether they be forced or not, 18 and it identifies, then, all of the period of time that the 19 generator is unavailable. 20 We call it an Equivalent Unavailability Factor 21 because what it does is it recognizes that a unit may just 22 be derated and not completely off-line. And so you convert 23 that derate into an equivalent unavailability if you looked 24 at it over the whole year. 25 And then what happens is, based on the 26 five-year average is we set the benchmark. 27 So in this particular generator, this unit, the 28 benchmark might be 7.8 minutes or hours of unavailability PUBLIC UTILITIES COMMISSION, STATE OF CALIFORNIA SAN FRANCISCO, CALIFORNIA 43 1 during the period of time here over the five years. 2 Now, what we're going to do next is we're going 3 to calculate some statistical measures, and the first one we 4 get to is the upper warning limit. And this warning limit 5 basically is two sigma. Okay? 6 So it's approximately the ninety- -- 97th 7 percentile. And when you finally get to the upper control 8 limit is we get to the 99.5 percentile, and the idea here is 9 to identify highly unlikely events. 10 It's very unlikely that a unit would get to this 11 extreme unavailability. 12 And what it does, then, as you can see on this 13 chart, here, is it allows for identifying the variation that 14 does happen. There is significant variation on units. 15 And one of the examples that we had used earlier 16 when the nuclear facilities were actually part of this 17 program -- of course, it is not now -- was to recognize that 18 a nuclear plant could actually be operating all the time but 19 then goes down for a whole 35- or 40-day refueling cycle 20 and, as a result, its unavailability is 100 percent. So 21 there would be these significant shifts. 22 But as long as we averaged them out over a 23 quarterly basis and then looked at it over a five-year 24 period, that would be well within these control limits. 25 Okay? 26 So, very quickly, that's how the control-limit 27 concept would work. 28 Yes? PUBLIC UTILITIES COMMISSION, STATE OF CALIFORNIA SAN FRANCISCO, CALIFORNIA 44 1 ALJ SULLIVAN: Okay. What do you mean by -- what 2 happens with the warning limit; what happens with the 3 control limit? 4 Are they just terms, or do they trigger other 5 things? 6 MR. PETTINGILL: The -- I'll share that with you in 7 just a second. 8 Because the next step here is -- well, let me 9 drill down to here. 10 What you would do is you would apply the 11 statistical tests that we have proposed in the standards. 12 Let's say, for example, if we look here, back in 13 the second quarter of 1997, we have a particular event that 14 is above the upper control limit. 15 During that quarter -- these are all quarters, as 16 you see, for each year -- that unit would have had an 17 excessive amount of unavailability, and, as a result, we 18 would say it has now triggered a poor performance. Okay? 19 In the same context we look at the second quarter 20 of 2000 and it's only gone past the upper warning limit. 21 Now, that might not mean poor performance from 22 the standpoint of a penalty because the two years or the two 23 quarters, prior and after, you know, of 2000, first and 24 third quarter, are actually down near the benchmark, and, as 25 a result, we only have a single quarter out of three. 26 And so the standards might very well say you have 27 to have two out of three quarters that are above the warning 28 limit. But that's fairly significant if we have two out of PUBLIC UTILITIES COMMISSION, STATE OF CALIFORNIA SAN FRANCISCO, CALIFORNIA 45 1 three quarters that are up at the two sigma level. 2 So you see that what we do, then, is we use the 3 statistics to help us identify whether it's a significant 4 event and may warrant some sort of investigation or 5 compliance process. 6 Does that answer your question, ALJ Sullivan? 7 ALJ SULLIVAN: Yes. I am going to repeat back what I 8 thought I heard. 9 MR. PETTINGILL: Okay. 10 ALJ SULLIVAN: And what I heard is that these are 11 basically statistical names, and you've given them -- one is 12 a two sigma variation, the other is a three sigma variation, 13 but what happens with them and what they mean are not yet 14 defined other than the names that you've given to the 15 distributions. But they can be subsequently useful in 16 identifying unusual events -- 17 MR. PETTINGILL: Right. 18 ALJ SULLIVAN: -- and then tying incentives to 19 prevent them from occurring; is that correct? 20 MR. PETTINGILL: Right. That's correct. 21 Now, in the standards we do actually propose an 22 application of these limits. 23 And I used the first example that if a particular 24 unit was above the upper control limit, then that would be 25 deemed a questionable practice or some sort of finding just 26 because of that fact. 27 It's highly unlikely for a unit for having a 28 whole quarter based on this historical data to suddenly be PUBLIC UTILITIES COMMISSION, STATE OF CALIFORNIA SAN FRANCISCO, CALIFORNIA 46 1 at that level. 2 ALJ SULLIVAN: Right. Basically, you -- I mean, if I 3 understand the statistics, it would occur only in a hundred 4 quarters, 1 percent. 5 MR. PETTINGILL: Yes. 6 ALJ SULLIVAN: Of course, the response could be that 7 this is that one percent. Some people -- you know, someone 8 just won the lottery twice, so I assume you have a 9 procedure, your next step is to describe what to do about 10 that. 11 MR. PETTINGILL: Exactly. Yes. 12 Okay. So then now we've gone through the 13 concepts here of having -- understanding whether there is 14 a good management of a maintenance program at a particular 15 facility, we've got the data reporting and the methods to 16 determine good and poor performance, and now the next step 17 is how do we know that these things are being done? 18 With the verification and audit process the way 19 we have proposed here is, first, generator owners would 20 self-certify against a set of standards that we talked 21 about, those 18 elements, and they would presumably do that 22 within the first 90 days of this program. 23 Now, once again, they would come back every two 24 years and recertify, go through that same process to 25 validate that they have the management program in place, the 26 training has been done, parts are being managed, so forth, 27 and so on. 28 And then, of course, there's an obligation to PUBLIC UTILITIES COMMISSION, STATE OF CALIFORNIA SAN FRANCISCO, CALIFORNIA 47 1 notify if there was any significant change in their program 2 in the intervening time. 3 Now, in addition to this, it's appropriate to do 4 some field visits and basically conduct that same process, 5 and -- and under the current legislation we would suggest 6 that that's done by the CPUC staff. You'd go through a 7 similar audit process to verify whether they -- it appears 8 as though the generator owner is meeting the intention of 9 those management practices that we talked earlier. 10 And then, finally, if either -- either one of 11 these are not done, there would be some triggering audits 12 because of questionable performance; and that could be based 13 on the performance metrics we talked about or compliance 14 with some of these elements. 15 So then we would move into some form of a penalty 16 phase -- and this is what I was just touching on -- that the 17 idea now is to look at all pe- -- all of these things -- 18 what's happening with the performance metrics, what's 19 happening with the performance evaluations, and then, 20 finally, what is the result of the field-based audits; and 21 that would lead to the finding of questionable practice. 22 I think that's where you were going, ALJ 23 Sullivan, so, okay, now we move into an enforcement element 24 which is, if there are fines or sanctions or penalties, what 25 might the severity be depending on these triggering events. 26 ALJ SULLIVAN: Also the distinguishing of a truly 27 random event from -- 28 MR. PETTINGILL: Yes. PUBLIC UTILITIES COMMISSION, STATE OF CALIFORNIA SAN FRANCISCO, CALIFORNIA 48 1 ALJ SULLIVAN: -- an event that sort of is a result 2 of underlying poor maintenance procedures. 3 MR. PETTINGILL: That's correct. 4 ALJ SULLIVAN: Okay. I assume that would occur from 5 the audit results. Would that -- is that what would be 6 the -- what would you think is the prime evidence for making 7 that distinguishing factor. 8 MR. PETTINGILL: Well, the audit is focusing 9 primarily, as I've characterized it here, on the management 10 practices and process going on at the particular facilities. 11 In terms of the random events, the way you've -- 12 you've asked the question, I would see those probably 13 falling more in those performance metrics. 14 What we're looking at is the unit actually 15 providing capacity, and is that capacity available to the 16 system for service of energy? 17 ALJ SULLIVAN: Okay. I guess what you would look for 18 is the poor performance correlated with an audit that shows 19 that certain activities weren't done; is that the idea? 20 MR. PETTINGILL: Well, certainly that may be one -- 21 one point in that process. 22 And, of course, in some of the stakeholder 23 discussions we had is that the triggering event on the 24 performance matrix -- metrics may just trigger an audit, 25 a more detailed inspection, to find out what may have caused 26 that, and that's why I wanted to share with you the simple 27 example of the nuclear facility. The rate -- the reason -- 28 and it's certainly possible -- that these metrics would be PUBLIC UTILITIES COMMISSION, STATE OF CALIFORNIA SAN FRANCISCO, CALIFORNIA 49 1 triggered on a refueling process, because of refueling. And 2 that's where the audit would find that and recognize that 3 there was a reasonable reason for the metrics to have picked 4 up that abnormal performance. 5 So the -- I think you characterized it earlier -- 6 and it's very appropriate to do so -- that the performance 7 metrics really are a stream. 8 Conceptually what they do is identify, here's the 9 performance we would expect; there seems to be something 10 that is out of normal; therefore, we want to go out and do 11 some form of more detailed investigation. 12 ALJ SULLIVAN: Okay. 13 MR. PETTINGILL: So to start to then focus on what 14 would happen with generator owners when we first apply this 15 program, they would need to collect their historical 16 performance data and provide it in the first 60 days. 17 Develop the internal procedures to report the 18 change-of-state data. 19 Now, the reason why I have this in parentheses 20 here is because this is again the NERC GADS. What NERC GADS 21 focuses on is identifying any change of state for the unit. 22 So if the unit were to go off-line completely, 23 that would be one change of state; if the unit were to have 24 a derate, that's another change of state; and when the unit 25 restores back to its full capacity, that's another change of 26 state. 27 So the data is fairly detailed, but it tracks 28 what state the unit is in and the cause for that change of PUBLIC UTILITIES COMMISSION, STATE OF CALIFORNIA SAN FRANCISCO, CALIFORNIA 50 1 state. 2 And so it's our understanding that some owners 3 actually do collect data similar to this, other ones would 4 have to implement this process. 5 Of course, we've talked earlier about them doing 6 the initial self assessment and then providing that initial 7 report to the PUC in order to get the program started. 8 I want to share with you at least some of the 9 feedback that I had in my records when we were working on 10 this program and starting to put it together to recognize 11 that we did here, at that time, that there were no 12 off-the-shelf maintenance or performance standards on 13 generators. Okay? 14 We did, of course, as I shared with you, adopt 15 the NERC GADS, which helps us, but I think basically what it 16 does is establish the metrics. 17 What we need to do, then, is determine 18 performance, and I think that's what we've actually added to 19 on the NERC GADS program. 20 Also our objective here, of course, was 21 maintenance, and so we've focused on maintenance, where 22 there may be other elements in the industry that identify 23 things like whether a power-system stabilizer has to be in 24 service, whether a particular droop setting on a unit has to 25 be available; but, of course, here we're talking about the 26 whole unit and whether it has a reasonable maintenance and 27 complete output of the unit in terms of its capacity and its 28 ability to serve energy. PUBLIC UTILITIES COMMISSION, STATE OF CALIFORNIA SAN FRANCISCO, CALIFORNIA 51 1 Generators are far too diverse. Yes. 2 And I think you've noticed what we did is we've 3 heard that comment and saying if you wanted to have 4 prescriptive standards, that would be the challenge and very 5 difficult because of the diversity; so what we've focused 6 on, then, is performance benchmarks and tried to look at the 7 energy component and the capacity of the generator. 8 I think it's important to recognize that in the 9 normal course of business some owners may be planning for 10 the retirement of a generator, and in the discussion that we 11 had with owners we recognized that that may be the case; 12 and, as a result, these statistics may indicate a decline in 13 performance. 14 I think the backstop to that is to ident- -- to 15 notify the ISO certainly, because of our planning 16 requirements for the system, to identify that that unit is 17 planned for retirement and know and understand that that's 18 exactly what's going on here. 19 So that would be our response to this issue. 20 And I think there was another piece I wanted to 21 share with you is that the -- the folks that we had, the 22 volunteers that were working with us on our initial 23 Maintenance Advisory Committee, recognized that this is a 24 good starting point, similar to where you're at right now, 25 and the challenge will be that we probably want to modify or 26 improve these standards as we go forward and learn some 27 lessons, and so a recognition that there should be some form 28 of advisory Committee to help conduct that process. PUBLIC UTILITIES COMMISSION, STATE OF CALIFORNIA SAN FRANCISCO, CALIFORNIA 52 1 ALJ SULLIVAN: Mr. Pettingill -- 2 MR. PETTINGILL: Yes? 3 ALJ SULLIVAN: -- just a question. 4 You say, Point 3, statistical performance 5 benchmarks are not appropriate but, if used, a time frame 6 must be sufficiently long to be statistically significant. 7 How long that is? 8 Have you determined that, what the sta- -- how 9 long you need to make a statistically significant finding? 10 MR. PETTINGILL: I think that's a good way -- a good 11 place for us to receive comments as we restart this process. 12 The way I could characterize the issue as I 13 recall it was it would not make sense, for example, to only 14 use the data through the years 2000 and 2001. 15 The generators, of course, argued that they had 16 provided significant amounts of megawatts, their units ran 17 hard, and we understood that, and, as a result, then there 18 were outages that resulted from that hard operation. 19 So, in order to create some balance in this, it 20 would make sense to include years where those things didn't 21 occur, and I think that's why we came up with the five years 22 and proposing five years to help create that balance in 23 terms of statistical measure. 24 ALJ SULLIVAN: The -- 25 MR. PETTINGILL: The other thing we did -- 26 One more point, if I might. 27 -- is in the CUF calculation, rather than 28 calculating the unavailability factor on a monthly basis, we PUBLIC UTILITIES COMMISSION, STATE OF CALIFORNIA SAN FRANCISCO, CALIFORNIA 53 1 found that there was a lot of value in determining what the 2 CUF was on a quarterly basis, and that again starts to 3 create some balance in regards to how long or short is the 4 statistical measure. 5 So, two things -- 6 ALJ SULLIVAN: So I assumed with a quarter you have 7 less variation -- 8 MR. PETTINGILL: Yes. 9 ALJ SULLIVAN: -- and so you get -- statistical 10 significance on a quarter is achieved -- 11 MR. PETTINGILL: Yes. 12 ALJ SULLIVAN: -- quicker than on a month-to-month. 13 MR. PETTINGILL: Yes. Some of the base research we 14 did, we were able to get some data from some of the 15 generator owners, and when we ran it though and tried to do 16 it, let's say, on a monthly basis, there was statistically 17 significant variation. 18 If we just simply went to a quarterly basis, 19 things started to settle down significantly. 20 And then that gave us four data points throughout 21 a year in order to monitor performance on a more periodic 22 basis. 23 ALJ SULLIVAN: Of course, the cost is is that it 24 takes you a quarter to get a quarter -- quarterly statistic, 25 so you -- things can -- you would be almost half a year 26 behind; correct? 27 MR. PETTINGILL: That's true. 28 ALJ SULLIVAN: Okay. PUBLIC UTILITIES COMMISSION, STATE OF CALIFORNIA SAN FRANCISCO, CALIFORNIA 54 1 MR. CLARK: That's why we intend to -- at the CPUC, 2 intend to continue with our current program that's been 3 ongoing for the last two years of investigating each and 4 every forced outage as well as monitoring that planned 5 maintenance which is occurring so that we will have in 6 real-time knowledge about what's going on at the plants 7 rather than waiting a quarter or a half a year to figure out 8 that this plant has a problem. 9 MR. PETTINGILL: Okay. 10 ALJ SULLIVAN: Thank you, Mr. Pettingill. 11 MR. PETTINGILL: You're welcome. 12 So, in summary, what I wanted to do is I have two 13 slides here to sort of summarize what we've gone through. 14 The first, here, recaps the basic precepts behind 15 this program the way I've outlined it for you: 16 The unit performance metrics, trying to create 17 that objective measure, and, of course, a standard system 18 for reporting-unit status and performance; 19 The performance standards, which is this 20 qualitative review, based on industry guidelines that we've 21 borrowed from the industry on good management elements that 22 should be in a maintenance program; and 23 Then, finally, the verification and audit process 24 that does include, you know, annual selection, a random 25 selection of generators to go out and take a look at those 26 and do the field inspections, and, of course, then resulting 27 in potentially findings of questionable performance. Okay? 28 I think the key points that I've touched on and I PUBLIC UTILITIES COMMISSION, STATE OF CALIFORNIA SAN FRANCISCO, CALIFORNIA 55 1 want to leave with you are these here: 2 It's appropriate to try to focus on capacity and 3 availability. 4 Availability would presumably say whether a unit 5 is on-line or off-line. 6 It can very well be on-line at a reduced 7 capacity, so we've tried to balance the two of those. 8 It's important, I believe, to utilize some sort 9 of objective performance basis, and in this case we've opted 10 for NERC to try to use a national standard to do that. 11 Establish the consistent data reporting, which is 12 again using the NERC GADS concepts; and then, you know, 13 confirm a commitment to maintenance in terms of what we've 14 done with the performance standards and the field- 15 evaluation process. 16 Emphasize the fact that really generator owners 17 need to think about and be focused on how can they improve 18 their performance, and are they monitoring their own 19 performance? 20 And then, finally, I touched on the fact at least 21 we heard from stakeholders, and I would certainly recommend 22 that the Committee needs to consider, what is the process 23 for going forward and improving the standards even after we 24 have this initial set? 25 And, of course, the last piece is we still need 26 to make sure that there is the enforcement once we determine 27 what the standards are. 28 ALJ SULLIVAN: Okay. Mr. Pettingill, I have a -- PUBLIC UTILITIES COMMISSION, STATE OF CALIFORNIA SAN FRANCISCO, CALIFORNIA 56 1 still one more question. 2 MR. PETTINGILL: Yes? 3 ALJ SULLIVAN: In regulating autos, basically autos 4 are regulated in two ways: One is the emissions that comes 5 out of the tailpipe of each car, and then also in terms of 6 miles per gallon, how good they get, there's something 7 called the fleet average vehicle standards. 8 MR. PETTINGILL: Uh-huh. 9 ALJ SULLIVAN: And just based on some of the 10 questions we've heard, I think people were racing -- some 11 people were saying let's look at our availability over our 12 whole plant so we can manage that as part of our maintenance 13 program versus a plant by plant, and I was just sort of 14 wondering what your preliminary thoughts are and basically 15 in terms of the unit of measurement, that's really what I'm 16 talking about. 17 MR. PETTINGILL: Right. 18 ALJ SULLIVAN: You know, one issue is the time -- you 19 cited quarters, you explained why -- and that issue is in 20 it. 21 Why this unit versus others? 22 MR. PETTINGILL: Well, I think I touched on two or 23 three key points that I would reiterate here. 24 First of all, in terms of trying to find a 25 statistical measure so we have the objective measure, we 26 felt that all of the elements in the CUF can be directly 27 controlled by maintenance. 28 In some cases there are other statistical PUBLIC UTILITIES COMMISSION, STATE OF CALIFORNIA SAN FRANCISCO, CALIFORNIA 57 1 measures that NERC might have that would apparently not be 2 controlled by maintenance, and so these elements look like 3 they were all directly related to maintenance. 4 So that's probably the most important thing. 5 Again, I also touched on the fact that I think 6 it's important to recognize that if we use a population of 7 generators, we'll run into the situation in which some 8 generators are predisposed to be above the average and some 9 of them will be predisposed to be below the average; and so 10 the challenge is what do you do about those that are 11 consistently below the average? And that's where we elected 12 to go with looking at the performance on a per-unit basis 13 and ensuring that the unit itself is maintaining performance 14 that's comparable to its historical basis and, going 15 forward, maintaining that, but some statistical measures to 16 see whether it's starting to decline and then, if it is, 17 that gives the trigger on the screen to say it looks like we 18 need to understand why might it be declining. 19 ALJ SULLIVAN: So the idea being, then, just 20 translating it to something we all understand, if this is 21 a gas guzzler, it's guzzling at its usual rate, it's not 22 guzzling at a faster rate -- 23 MR. PETTINGILL: Exactly. 24 ALJ SULLIVAN: -- and, therefore, we can suspect that 25 it's been maintained properly. 26 MR. PETTINGILL: Exactly. 27 ALJ SULLIVAN: It's just a lemon in terms of what we 28 thought. PUBLIC UTILITIES COMMISSION, STATE OF CALIFORNIA SAN FRANCISCO, CALIFORNIA 58 1 MR. PETTINGILL: I think there's another piece to 2 this. 3 I have sort of talked, you know, in the larger 4 perspective, but if we look at it from a particular 5 company's viewpoint, there are certainly going to be 6 generator owners in California that may only own one 7 generator; and if we started to do this maybe on a corporate 8 level, those companies who only own one generator would 9 certainly be at a disadvantage against companies who owned 10 numerous generators and we're trying to compare a company 11 versus a company. 12 So it makes sense, I think, from a technical and 13 from a business perspective to try to monitor it on a per- 14 unit basis. 15 ALJ SULLIVAN: Thank you, Mr. Pettingill. 16 I find your presentation fascinating, and I 17 couldn't resist asking some questions. 18 MR. PETTINGILL: Thanks. 19 Any other questions from the Committee members? 20 COMMISSIONER WOOD: Do you want to start off? 21 MR. BJORKLAND: No, I don't have any questions, but 22 I would like to just make a comment. 23 I have had a chance over the last month or so to 24 review these standards several times, and I think it's 25 appropriate to compliment you, Phil, and Richard, and your 26 respective staffs for a very, very professional and 27 comprehensive program that, to me, from my background and 28 experience, is well thought out. PUBLIC UTILITIES COMMISSION, STATE OF CALIFORNIA SAN FRANCISCO, CALIFORNIA 59 1 And so I know a lot of hard work has gone into 2 this, and it's obvious that you will level the playing field 3 when we finally get this implemented. 4 So my comments to you, Phil, and to you, Richard, 5 and your staffs are one of compliment for a job well done. 6 MR. PETTINGILL: Thank you. 7 MR. CLARK: Thank you. 8 COMMISSIONER WOOD: Yeah. I would echo 9 Mr. Bjorkland's comments, although they carry a lot more 10 weight coming from him than from me. I was just a grunt in 11 the system that he was running, so -- 12 (Laughter) 13 COMMISSIONER WOOD: -- he's certainly in a better 14 position to evaluate these approaches. 15 And maybe for that reason I have some questions. 16 MR. PETTINGILL: Okay. 17 COMMISSIONER WOOD: And I'll continue to have 18 questions, I'm sure, off-line for your staff and for 19 Mr. Clark's staff as well. 20 The -- what I gather from the presentation is 21 that this approach relies more or less wholly on performance 22 standards rather than prescriptive standards for how to 23 conduct maintenance. I mean, that's -- is that a general -- 24 generally correct characterization? ] 25 MR. PETTINGILL: I think the way I would answer that 26 is to say that we've got the performance standards primarily 27 as the overall determination: Is the plant owner able to 28 keep the generator providing the capacity to the system? PUBLIC UTILITIES COMMISSION, STATE OF CALIFORNIA SAN FRANCISCO, CALIFORNIA 60 1 And that becomes, yes, I think it's fair to say, the primary 2 determinant. 3 However, the reality is, as we all understand 4 about maintenance, it's possible to do no maintenance on a 5 particular asset. 6 Let's say for example our automobiles. We may 7 not choose to change the oil for a significant amount of 8 time until finally that engine fails to operate. 9 And that's the reason why we also put the second 10 element, the performance standards, in terms of the on-the- 11 ground investigation or audits and the self-certification by 12 the plant owner to verify that, in fact, they have a 13 maintenance program in place and they're addressing these 14 things in terms of a due diligence sort of a standpoint. 15 So you and I may elect to change the oil in our 16 car at a different level of performance. I might change it 17 at 3,000 miles, and you may elect to do it at 5,000. 18 But what we tried to focus on is that it's 19 appropriate that we do, in fact, change the oil. 20 COMMISSIONER WOOD: Okay. That's a real good example 21 of what was on my mind here. I think that the analogy is 22 very good because, especially with the older plants, the 23 failures are -- they're each unique events and, over a 24 longer time period than statistical averages, will capture 25 what's going on. 26 In a shorter time period, we don't know when a 27 particular bearing is going to fail or when a tube is going 28 to leak or something like that. PUBLIC UTILITIES COMMISSION, STATE OF CALIFORNIA SAN FRANCISCO, CALIFORNIA 61 1 What I'm wondering about: Are there any 2 guidelines or indicators about particular things? I'll just 3 throw out a couple of things that come to mind. One is 4 staffing standards, particularly with regard to resident 5 staff: 6 Just anecdotal information which has gotten back 7 to me is that compared to the way that they were run prior 8 to divestiture, some plants are maintaining staff of 9 comparable size. Most of them have downsized quite a bit, 10 you know, 50 percent of the previous staff or 60 percent 11 something like that. 12 Some other plants have reduced, I'll say 13 maintenance staff, to virtually nothing, one or two or three 14 resident staff and then are apparently wholly reliant upon 15 contractor staff for things that happened other than just 16 going around and pumping oil into bearings and things like 17 that. 18 Do these standards give any guidance on those 19 issues? 20 MR. PETTINGILL: No specific guidance in regards to 21 quantities of personnel. What we focused on in the staffing 22 portion of the standards is to ensure that there was 23 adequate staff and that staff was trained. 24 And I think one of the things to consider in the 25 adequate staffing is certainly there is probably a number of 26 folks that need to be at the facility on a permanent basis 27 or on a 24-hour, you know, ongoing-type basis. 28 But it's certainly conceivable that a party could PUBLIC UTILITIES COMMISSION, STATE OF CALIFORNIA SAN FRANCISCO, CALIFORNIA 62 1 enter into a contract for contracting staff that had 24-hour 2 response characteristics and that those folks were properly 3 and adequately trained to work on that particular facility. 4 And those were some of the comments we heard back from 5 owners, that if they could show us that they had those kinds 6 of contracts in place, would that meet the intent of the 7 staffing. 8 And at least in our thinking of a year or so ago, 9 we felt that that would probably be appropriate. So the 10 idea is to ensure that there was adequate staff and rely on 11 the owners to show us that the staffing was adequate. 12 That was the approach that we took in these 13 standards. 14 COMMISSIONER WOOD: Okay. I guess my concern here is 15 that there are contractors and there are contractors. 16 Certainly, after divestiture there's a 17 requirement in the law that for two years thereafter the new 18 owners contract with the utility to provide staffing for 19 operations and maintenance. And since it was the exact same 20 people that were doing it before, they had all of the 21 facility and institutional knowledge. So you wouldn't have 22 expected any significant degradation in the quality of 23 maintenance and operation. 24 After the two years, different owners went their 25 own ways. And there were different strategies that were 26 developed. And some kept the staff, some kept part of the 27 staff and let other parties go, and others relied almost 28 wholly on contractors. PUBLIC UTILITIES COMMISSION, STATE OF CALIFORNIA SAN FRANCISCO, CALIFORNIA 63 1 I'm guessing -- and this is purely guesswork. I 2 have no objective basis for making this assertion that some 3 of the facility owners may have contracts with outfits that 4 are familiar with the units and that provide maintenance 5 services on an extended basis and others do it on a more 6 episodic basis, similar to the way that the utilities used 7 to augment their resident work forces with bringing in 8 outside contractors who usually were not familiar with the 9 particular units. 10 And my concern here is that because unit 11 familiarity is so important on these older units, in many 12 cases accurate prints don't exist anymore, for example, so 13 there's actually a lot of institutional knowledge that's 14 necessary for appropriately quick maintenance on things. 15 And I'm meandering here, but I'm trying to get a 16 handle on whether there is anything in these standards that 17 gives us a handle on these kinds of issues. 18 MR. PETTINGILL: No specifics other than the way I 19 characterized it. 20 MR. CLARK: Actually, we did -- in the last iteration 21 of these standards we added some language with respect to 22 the familiarity of the workforce with regard to the specific 23 unit. 24 I'm struggling to find those conditions here 25 within the language. I can get those to you in a red-lined 26 version, but there were some -- there was some language 27 added to address that concern. 28 MR. BJORKLAND: It seems to me, Carl, that if the PUBLIC UTILITIES COMMISSION, STATE OF CALIFORNIA SAN FRANCISCO, CALIFORNIA 64 1 plant responsible officer certifies that the maintenance 2 standards are being adhered to and if the statistical data 3 with the capacity and availability factor and other 4 statistical data that we have are met, then the method that 5 they use to have their maintenance is -- the bottom line is 6 that they can meet the maintenance objectives. 7 I don't know that it's our responsibility to 8 micromanage the facilities regarding their staffing levels 9 as long as they meet the requirements. 10 Was that an intent? 11 MR. CLARK: I don't think it was an intent to set any 12 sort of staffing levels. The concern is that of unit 13 familiarity. 14 Many of the comments that I've heard from many of 15 the generators across the spectrum over the last two years 16 has been that each unit is different from each other unit, 17 not in terms of its basic function, but in terms of the 18 appurtenances and such and that because each one is 19 different, they each have to be operated differently. 20 And what flows from that analysis for me is that 21 in order to be able to maintain a unit properly, you need to 22 have some level of unit familiarity. 23 So that was what we attempted to address in the 24 changes of the standards, not to say that you have to have 25 five maintenance personnel on a particular plant, but that 26 those maintenance personnel, whether they are employees or 27 independent contractors, have to have a certain level of 28 familiarity with that particular plant that they're working PUBLIC UTILITIES COMMISSION, STATE OF CALIFORNIA SAN FRANCISCO, CALIFORNIA 65 1 on. 2 COMMISSIONER WOOD: I certainly agree with you, 3 Glenn, that we do not want to get into not just 4 micromanaging, managing in any way these plants. 5 We don't own the plants in the first place, but 6 more than that, certainly the Public Utilities Commission 7 doesn't have the capacity or expertise or interest or budget 8 or anything to run power plants. 9 I'm not suggesting that we ought to have 10 prescriptive standards for any of these things. I'm trying 11 to draw out where we capture this. And the reason I'm 12 particularly concerned about it is because I think most 13 people would agree that the next three or four years the 14 fleet of generating plants that California depends upon is 15 going to look a lot different from the way it looks right 16 now. I hope it does. 17 We have a lot of units that we rely on very 18 heavily that were scheduled for mothballing a long time ago. 19 And they're not in the greatest of shape, and that's likely 20 nobody's fault. It's just they've outlived their useful 21 lives. 22 What that means is that measures which depend on 23 averages over an extended period of time may not be adequate 24 to give us protection for the crunch periods that we can 25 reasonably anticipate we're going to see over, say, the next 26 two years. And it may be we can't get there, but I 27 certainly want to raise the question. 28 And my concerns about practices and identifying PUBLIC UTILITIES COMMISSION, STATE OF CALIFORNIA SAN FRANCISCO, CALIFORNIA 66 1 appropriate and inappropriate practices don't just go to 2 staffing. There's always the suspicion with me that I focus 3 on that because of my union background, but I bring it up 4 because it's the thing that I'm most familiar with. 5 But there are other issues, too, like inventory, 6 parts, for example. Again, one of my first couple of days 7 as a utility worker back in 1981 involved being at the 8 Etiwanda plant where the warehouse was engaged in scrapping 9 out a whole lot of essentially irreplaceable equipment. 10 I was told -- the scuttlebutt at the time was it 11 was at the direction of the PUC because they felt that 12 Edison was carrying too big an inventory. 13 And this stuff was all material that you had to 14 machine from scratch because nobody manufactured it 15 anymore. Probably Glenn knows more about what happened than 16 I ever would. 17 But my concern here is about what are reasonable 18 standards for maintaining inventory, because maybe you have 19 an event that occurs that might or might not happen within a 20 two or three-year time period. 21 But if it does happen and it takes three months 22 to get a part to bring it back, then are we reasonably to be 23 maintaining some inventory to address that possibility? 24 Here again, I don't know if we can get to a 25 standard or if we should be getting to standards like that, 26 but they're questions that come to mind. 27 I have one or two other specific questions 28 though: PUBLIC UTILITIES COMMISSION, STATE OF CALIFORNIA SAN FRANCISCO, CALIFORNIA 67 1 Rich, what I understand from you is that even 2 though we would be proposing and enacting these standards of 3 performance, there would be audits and inspections, 4 investigations, based on individual events that weren't 5 necessarily triggered by meeting some statistical standard. 6 MR. CLARK: That's correct. 7 COMMISSIONER WOOD: Okay. 8 And I gather that the slides that referred to 9 penalties did not indicate that these standards suggest or 10 prescribe penalties, but rather that they're suggestions to 11 the PUC as to what might be benchmarks that could be used to 12 trigger the possibility of penalties. That's correct? 13 MR. PETTINGILL: That's correct, yes. 14 COMMISSIONER WOOD: Okay. 15 The other thought that I had is that lack of unit 16 availability, I think, normally isn't a big issue when 17 there's lots of other available capacity. It only becomes 18 an issue when we come to a crunch. 19 Now, as a matter of fact, in the winter of 20 2000-2001, we actually did see periods of relatively low 21 usage, and yet we had blackouts during some of that period 22 and certainly a lot of events that maybe didn't quite reach 23 the point of a blackout. 24 But in general, I would anticipate that there are 25 only certain times when we're concerned about availability. 26 And I wonder, is there anything in this method of analysis 27 that captures the distinction between availability during 28 times of high demand or some other system conditions that we PUBLIC UTILITIES COMMISSION, STATE OF CALIFORNIA SAN FRANCISCO, CALIFORNIA 68 1 should be concerned about as distinct from year-round 2 availability? 3 MR. PETTINGILL: Well, yes, because we've established 4 the base data standard, the changes state or, rather, the 5 state of a generator can be looked at and evaluated in any 6 period of time. So we could certainly look at it in the 7 off-peak hours, on-peak hours. 8 The other thing I would share with you is the way 9 that the statistical measure works is it's looking at the 10 availability of the unit. 11 So the unit does not necessarily need to be 12 paralleled and producing energy. Because certainly from an 13 operational perspective, that may get us into an over-gen 14 situation and it causes significant problems for us, the 15 system dispatcher. 16 But what it does is it focuses on the fact 17 whether the unit is available and at what capacity is it 18 available for. So certainly the analysis that you're 19 talking about could be done because you know what the status 20 of the unit is at any point in time. 21 COMMISSIONER WOOD: Would we need to incorporate to 22 specify any of those measures in these standards that we're 23 adopting in order to be able to use them and enforce them, 24 or could we take the standards as they're presently drawn up 25 and then manipulate them in the PUC rulemaking process to, 26 for example, capture availability during peak periods or 27 some other defined category? 28 MR. PETTINGILL: Well, I guess the way I would answer PUBLIC UTILITIES COMMISSION, STATE OF CALIFORNIA SAN FRANCISCO, CALIFORNIA 69 1 that is what we've given you here in this set of standards, 2 this proposal, is the common data standard and the way to 3 get the data consistently and accurately. 4 Clearly, what we've done is we focused on the 5 availability and capacity of the units with the CUF metric. 6 What you're proposing is you'd like to look at 7 some other metrics. But again, I think the data that's 8 being collected is consistent and, therefore, it allows for 9 comparison under different metrics. It's just a matter of 10 trying to define what those metrics are. And to answer your 11 question pointedly, we didn't develop any other metrics 12 other than this capacity on availability. 13 COMMISSIONER WOOD: The point of this whole thing, of 14 course, is we want information, we want data, we want an 15 analytical method, but we also want to let the generators 16 know what's expected of them. And you know, it's not fair 17 to retroactively apply some standard that you hadn't 18 developed at the time that the event occurred. 19 I think the main area of concern is availability 20 during times when that availability is important. Today, 21 probably, generator availability is not a real big deal 22 because I assume that load is fairly low -- maybe a lot of 23 people have heaters on -- but it's not like the peak of 24 July. 25 So these may not be real important during many 26 months out of the year, but at certain times of the year 27 they are very important, and it's at those moments that we 28 want to focus and that we want to place the maximum PUBLIC UTILITIES COMMISSION, STATE OF CALIFORNIA SAN FRANCISCO, CALIFORNIA 70 1 responsibility on the generators to be available. 2 ALJ SULLIVAN: Actually, that raises a question: 3 Suppose this Committee, Mr. Pettingill, decided 4 that what they were most interested in in terms of the 5 screen would be a screen not on a general availability but, 6 say, availability during peak-demand periods, thinking that 7 if that's, indeed, what we're interested in, that's indeed 8 where we should focus enforcement, if any? 9 Will you be collecting data under your proposal 10 at a sufficiently disaggregated level, say that this 11 Committee could then adopt that? And then, second of all, 12 would you have any professional recommendations versus one 13 screen versus the other? 14 MR. VAN PELT: Greg Van Pelt, I'm the manager of 15 outage coordination at the ISO. 16 Certainly, attention to availability of 17 generation during peak periods is critical, perhaps more 18 critical than other times. 19 However, to focus only on peak times -- and I 20 don't believe anybody's actually suggesting that -- would be 21 to disregard the times such as during the winter of 2000- 22 2001, when the reason that we had a significant number of 23 emergent times was because there were so many generators off 24 for long-term maintenance on an uncoordinated basis at that 25 time to be ready for the summer peak times when the market 26 was the most high yielding, if you will. 27 Since that time, we've implemented some greater 28 coordination requirements. And provided that the outage PUBLIC UTILITIES COMMISSION, STATE OF CALIFORNIA SAN FRANCISCO, CALIFORNIA 71 1 coordination requirements and long-term planning of 2 generation outages can be coordinated adequately, certainly 3 a greater focus on peak periods is appropriate. But it 4 would be, perhaps, a greater challenge if we only focused on 5 peak periods. 6 There should be, perhaps, a greater emphasis on 7 peak periods, but the focus on availability on a year-round 8 basis so as to be available while other units are doing 9 their maintenance is just as critical. 10 MR. PETTINGILL: What I wanted to share with you is 11 that same concept but maybe a slightly different focus here. 12 And that was the fact that when Greg, through this process 13 of outage coordination, does go ahead and allow for the 14 clearance of particular units, let's say, as much as 15 20 percent of our system capacity may be off line for long- 16 term maintenance. 17 The issue then becomes our reliance on the 18 remaining 80 percent of the generators and do we have a high 19 confidence level that those remaining 80 percent are now 20 going to be able to be available, reliable and provide the 21 capacity -- the rated capacity that they have? 22 So it does put a little bit more emphasis almost 23 on those off-peak periods when you tend to have higher 24 amounts of units off line for long-term maintenance. 25 ALJ SULLIVAN: Also, just as a follow up based on 26 Commissioner Wood's question, the question would seem to my 27 eyes: What you're interested in is you're interested in 28 good maintenance, and what you're measuring is availability PUBLIC UTILITIES COMMISSION, STATE OF CALIFORNIA SAN FRANCISCO, CALIFORNIA 72 1 and unavailability. 2 And the question then: Is there any type of 3 maintenance that can be done that particularly increases 4 availability during peak periods versus just sort of a 5 generalized maintenance? 6 In other words, does the unavailability -- is it 7 a random function of maintenance wherever it occurs, or is 8 it possible to have targeted maintenance where you can 9 ensure better reliability during a peak? I think that 10 causal equation would be behind the statistical measure. 11 Do you have the question in mind? 12 In other words, you're measuring a maintenance 13 program. Is the maintenance program time specific or is it 14 just a maintenance program? 15 MR. VAN PELT: Time -- forgive me. Time specific 16 with regard to the time of year? 17 ALJ SULLIVAN: Well, the time of likely outages. 18 What I mean is: Can you adopt a maintenance program, say, 19 the maintenance program is -- well, just to take 20 Commissioner Wood's example, you squirt extra oil in during 21 the peak periods versus you just change the oil once every 22 three months, you know, like a car so that that's sort of 23 it. 24 Could it be like, say, a car that just before you 25 go out on a long journey, you check under the hood and make 26 sure there's oil there, versus just going to and from work, 27 you forget about the oil and show up every three months at 28 the gas station? PUBLIC UTILITIES COMMISSION, STATE OF CALIFORNIA SAN FRANCISCO, CALIFORNIA 73 1 Those are sort of using our car metaphors. One 2 would be a peak maintenance procedure. The other would be 3 just a standard. 4 Do those things exist in power plants, and if so, 5 where the separate measurement is. 6 MR. VAN PELT: I would agree with Commissioner Wood. 7 It does make sense to provide a greater emphasis on 8 availability during peak periods, but I wouldn't want to 9 focus only on that is what I'm saying. 10 ALJ SULLIVAN: Okay. 11 MR. BJORKLAND: Yeah. 12 MR. CLARK: And it's my impression that what we're 13 talking about to some extent here -- to a large extent here 14 is the interaction between the operation of rules and the 15 maintenance rules and the outage coordination and the 16 penalties for not complying with the outage coordination 17 also. 18 COMMISSIONER WOOD: Okay. 19 That's all the questions the Committee members 20 have. 21 I'm going to allow a few minutes for questions 22 from the audience, if there are any. I'd like to wrap this 23 up, say, by 11:30 if we can. 24 But are there any questions? 25 Yes. Please identify yourself and spell your 26 last name. 27 MS. LODUCA: Good morning, Janet Loduca for Pacific 28 Gas and Electric Company, L-o-d-u-c-a. I just had a couple PUBLIC UTILITIES COMMISSION, STATE OF CALIFORNIA SAN FRANCISCO, CALIFORNIA 74 1 of procedural questions. 2 I, too, found the presentation very helpful, and 3 I'm wondering if that's going to be made publicly available. 4 ALJ SULLIVAN: Can the slide presentation be made 5 available? 6 MR. PETTINGILL: Yes. 7 ALJ SULLIVAN: Basically, we've talked off line on 8 that, and there's going to be two things; one, we'll have it 9 appended to the transcript so we'll have a complete record; 10 second of all, probably in a week or so, when we create a 11 ruling that summarizes all the things we actually decided 12 today -- and I'm going to be away on vacation -- we will 13 also, as we did with the previous ruling which we sent, we 14 will distribute the slide presentation as an appendix to 15 that. 16 So in other words, we're making it available in 17 two ways; one, bound with the transcript; and second, as 18 part of the ruling which will follow this meeting. 19 MS. LODUCA: Thank you. 20 The other question I have is: Given the short 21 amount of time to file comments, I'm wondering if the 22 Committee could make available something of a red-lined 23 version that would show the last draft of the ISO's draft 24 maintenance standards as compared to what was put out 25 yesterday, because we've got a very large document. 26 And while many of the parties here are very 27 familiar with what the ISO put out, it would be helpful in 28 this short period of time to see exactly what the PUBLIC UTILITIES COMMISSION, STATE OF CALIFORNIA SAN FRANCISCO, CALIFORNIA 75 1 substantive changes were to help people facilitate 2 commenting. 3 COMMISSIONER WOOD: Is that feasible? 4 ALJ SULLIVAN: Let me direct the question to 5 Richard Clark. 6 MR. CLARK: It's feasible to do the very last 7 iteration, yes. There were a number of meetings between the 8 ISO staff and the PUC staff over the last few months, and a 9 number of changes have been made to include the very last -- 10 COMMISSIONER WOOD: The question, I think, is really 11 about the original -- the document that we started with the 12 ISO that emerged from that stakeholder process and comparing 13 that to the document which was handed out today. 14 ALJ SULLIVAN: Off the record, please. 15 (Off the record) 16 ALJ SULLIVAN: Back on the record. 17 While we were off the record, Mr. Pettingill has 18 agreed to post on the ISO's website a Word document version 19 of last December's ISO maintenance standards. And in 20 addition to the availability of his formal presentation 21 through our attachment to the transcript and to our ruling, 22 which would also be on the website, he is going to make it 23 more timely available on the ISO website. 24 Thank you. 25 COMMISSIONER WOOD: Thank you, Judge Sullivan. 26 Mr. Blue. 27 MR. BLUE: How soon can you get that presentation 28 that you did today on the website? It's really critical for PUBLIC UTILITIES COMMISSION, STATE OF CALIFORNIA SAN FRANCISCO, CALIFORNIA 76 1 us to -- I think it would be really helpful if you could do 2 that. 3 MR. PETTINGILL: Yeah, I don't know. I'm going to 4 have to go back and check with our staff, but certainly 5 today is not likely, and probably Monday looks like the 6 best. So in order to respond to the question, probably 7 Monday at the earliest. 8 MR. BLUE: Okay. You don't have a paper copy with 9 you we can make copies of? 10 MR. PETTINGILL: Well, actually, I do have a paper 11 copy, if we want to go through that process. 12 MR. BLUE: Okay. We'll talk afterwards. 13 ALJ SULLIVAN: You have to submit one paper copy to 14 the court reporter for inclusion in the transcript. 15 MR. PETTINGILL: All right. 16 MR. BLUE: Yeah. But I just wanted to make two kind 17 of closing comments here. 18 I think -- Mr. Bjorkland, I think you said it 19 right when you said if the plant officer, responsible 20 officer, certifies they have a program, if they meet the 21 standards, then we've accomplished the goals. 22 I would remind you -- and I don't think we're 23 heading on this route, but you know, I hear a little bit of: 24 If you go down a path of prescribing a certain inventory 25 level or prescribing a certain staffing level or prescribing 26 certain things, you're just adding more cost to the system. 27 That's just a reminder. Thanks. 28 COMMISSIONER WOOD: Thank you. PUBLIC UTILITIES COMMISSION, STATE OF CALIFORNIA SAN FRANCISCO, CALIFORNIA 77 1 Are there any more comments? 2 (No response) 3 COMMISSIONER WOOD: With that, unless Mr. Bjorkland 4 or Judge Sullivan has any comments, then we've concluded our 5 business for today and we will adjourn. 6 Thank you. 7 (Whereupon, at the hour of 11:25 a.m., 8 this matter, having been continued to January 24, 2003, at a time to be set, the 9 workshop then adjourned.) 10 * * * * * 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PUBLIC UTILITIES COMMISSION, STATE OF CALIFORNIA SAN FRANCISCO, CALIFORNIA