UNITED STATES OF AMERICA BEFORE THE FEDERAL ENERGY REGULATORY COMMISSION ) ) ) ) ) ) ) ) ) )

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1 UNITED STATES OF AMERICA BEFORE THE FEDERAL ENERGY REGULATORY COMMISSION San Diego Gas & Electric Company, Complainant, v. Sellers of Energy and Ancillary Services into Markets Operated by the California Independent System Operator Corporation and the California Power Exchange Corporation, Respondents. Docket No. EL CALIFORNIA PARTIES RESPONSE TO BPA AND WAPA S ANSWER TO THE CALIFORNIA PARTIES REQUEST FOR CLARIFICATION OR REHEARING Pursuant to Rule 213 of the Federal Energy Regulatory Commission s (FERC or Commission Rules of Practice and Procedure, 1 the California Parties 2 respond to the Bonneville Power Administration (BPA and Western Area Power Administration s (WAPA Motion for Leave to Answer and Answer to the California C.F.R (2014. For purposes of this pleading, the California Parties are the People of the State of California ex rel. Kamala D. Harris, Attorney General, the Public Utilities Commission of the State of California, Pacific Gas and Electric Company, and Southern California Edison Company.

2 Parties Request for Clarification or Rehearing (BPA/WAPA Pleading. 3 Because the California Parties sought neither rehearing nor clarification on any issue concerning BPA and WAPA, BPA and WAPA are not entitled to answer the California Parties. In fact, BPA and WAPA are not entitled to file motions in this proceeding. Further, the BPA/WAPA Pleading is an untimely attempt to seek rehearing of, and an unlawful collateral attack upon, Opinion No The Commission should dismiss the BPA/WAPA Pleading as the legal nullity that it is. I. BACKGROUND A. The Commission Dismissed BPA and WAPA from this Proceeding on Jurisdictional Grounds, But Rejected BPA and WAPA s Request that the Commission Vacate the Presiding Judge s Findings Regarding BPA and WAPA s Conduct In Opinion No. 536, the Commission dismissed BPA and WAPA from this proceeding, stating that: We find that their dismissal is appropriate because the Commission lacks authority to order refunds from them. However, as discussed further below, we do not vacate the factual findings made by the Presiding Judge regarding BPA and WAPA s conduct. 4 Discussing those factual findings, the Commission explained 3 Filed in Docket No. EL (Dec. 18, The California Parties are entitled to answer BPA and WAPA s motion. See 18 C.F.R (permitting answers to motions. To the extent necessary, the California Parties seek leave to file this answer as it clarifies the nature and status of the BPA/WAPA Pleading and, thus, will assist the Commission in its decision-making process. See, e.g., Entergy Ark., Inc., 149 FERC 61,262 at P 61 (2014 (accepting an answer to an answer because it provided information that assisted the Commission in its decision-making process; State Corp. Comm n, 149 FERC 61,235 at P 35 (2014 (same; Pub. Serv. Co. of Colo., 149 FERC 61,228 at P 27 (2014 (same. 4 San Diego Gas & Elec. Co., 149 FERC 61,116 at P 4 (2014 (Opinion No

3 that the Presiding Judge, who had heard and duly considered the extensive evidence presented at the hearing, found that BPA and WAPA engaged in tariff violations that affected the market clearing prices 5 during the Summer Period, and found that BPA is liable for refunds for both forward market transactions and energy exchanges during the Refund Period, and WAPA is liable for refunds for forward market transactions. 6 The Commission noted that BPA and WAPA had asked to be dismissed from the proceeding, arguing that the Commission has no authority over nonjurisdictional entities. 7 The Commission recounted that BPA and WAPA s earlier attempts to be dismissed -- before the hearing concluded and before the Presiding Judge had issued his findings in the Initial Decision -- had been rejected. 8 Recognizing the jurisdictional constraints that limit its ability to enforce remedies from BPA and WAPA, the Commission dismissed them from the final, remedy, phase of the proceeding: [W]e find that at the current stage of the proceeding, where the Commission will be ordering a remedy for the Summer Period and refunds for the Refund Period, it is appropriate to dismiss [BPA and WAPA as] non-jurisdictional entities from the proceeding. Because the Commission is precluded from ordering a remedy for the transactions involving BPA and 5 As the Commission has explained, in single-price auction markets such as those run by the California Independent System Operator Corporation and the California Power Exchange Corporation, tariff violations by any seller cause all sellers to receive unlawful rates. See Cal. ex rel. Brown, 135 FERC 61,178 at P 77 n.116 (2011. Thus, BPA and WAPA s tariff violations caused jurisdictional sellers to receive unlawful rates. 6 Opinion No. 536 at P 19 (citing San Diego Gas & Elec. Co., 142 FERC 63,011 at P 10 (2013 (Initial Decision. 7 8 Opinion No. 536 at P 19. See id. at P 20. 3

4 WAPA, there is no reason for these entities continued participation at this stage of the proceeding. 9 After discussing BPA and WAPA s briefs on exceptions and considering all of their asserted rationales for vacating the Presiding Judge s findings, 10 the Commission noted that, in addition to asking to be dismissed from this phase of the hearing, BPA and WAPA had also asked the Commission to vacate the Initial Decision to the extent it makes findings pertaining to their transactions. 11 This, the Commission correctly refused to do. It said: [W]e will not vacate the Initial Decision s findings regarding the transactions involving these non-jurisdictional entities, as there are no grounds to do so.... [P]recedent is clear that while the Commission is precluded from ordering these entities to pay refunds, the Commission may consider the facts and circumstances of governmental entities as part of its investigation of jurisdictional rates. 12 The Commission cited to precedent, including Transmission Agency of Nothern Caifornia v. FERC, 495 F.3d 663 (D.C. Cir. 2007, Pacific Gas & Electric Co. v. FERC, 306 F.3d 1112 (D.C. Cir. 2002, and FPC v. Conway Corp., 426 U.S. 271 (1976, in support of its conclusion that the Presiding Judge s findings concerning BPA and WAPA s transactions should not be vacated Id. at P 22. See Opinion No. 536 at PP Id. at P 21. Id. at P 23 (emphasis added. See Opinion No. 536 at P 23 (citing cases. BPA and WAPA cite a different line of Commission cases in which the Commission stated that unreviewed findings had no precedential value (see, e.g., BPA/WAPA Pleading at 3-5. But the cases that BPA and 4

5 B. The California Parties Did Not Seek Clarification or Rehearing of Anything that the Commission Did or Said Concerning BPA and WAPA The California Parties only mention of BPA and WAPA occurred in a section of their pleading entitled Introduction and Background: The Commission Correctly Affirmed the Presiding Judge s Findings. 14 The sum total of the California Parties discussion of BPA and WAPA consisted of three sentences: The Commission also correctly denied BPA and WAPA s request that the Commission vacate the Presiding Judge s factual findings concerning BPA and WAPA s transactions. The Commission held that there were no grounds to vacate those findings and cited to precedent that permits the Commission to consider governmental entities transactions when it investigates, as it did here, jurisdictional entities. Ordering Paragraph (A makes clear that the Presiding Judge s findings of fact were affirmed, not vacated. 15 Far from challenging the Commission s determinations concerning BPA and WAPA, the California Parties agreed with them. 16 Thus, there is nothing for BPA and WAPA to answer in the California Parties Request for Clarification or Rehearing. WPA cite involved situations in which the facts at issue were found to be unrelated to any remaining live dispute. Thus, those cases have no bearing here, where the facts at issue relate to live disputes concerning jurisdictional rates and where, consistent with FPC v. Conway and other cases that the Commission cited, the Commission explained its refusal to vacate findings as arising from its right to consider the facts and circumstances of governmental entities as part of its investigation of jurisdictional rates. Opinion No. 536 at P Cal. Parties Request for Clarification or Reh g at 5, filed in Docket No. EL (Dec. 10, Id. See id. 5

6 II. THE BPA/WAPA PLEADING IS NOT PROPERLY BEFORE THE COMMISSION In Opinion No. 536, the Commission granted BPA and WAPA s request to be dismissed from this proceeding. 17 No party challenged that dismissal. As a result, BPA and WAPA are no longer parties to this proceeding. Thus, even if the Commission were to focus on the title of the BPA/WAPA Pleading and interpret it as a motion to answer and an answer to the California Parties Request for Clarification or Rehearing, the Commission should reject it. Rule 212 of the Commission s Rules of Practice and Procedure provides that motions must be filed by a participant or a person who has filed a timely motion to intervene which has not been denied. 18 Having been, at their own request, dismissed from this phase of the proceeding, BPA and WAPA are neither participants nor persons who have sought intervention. They are not entitled to file motions. Recently in Brayton Point Energy, LLC, the Commission rejected on procedural grounds a motion filed by an entity that was not a participant and that had not moved to intervene. 19 The Commission explained that only participants or persons who have filed timely motions to intervene which have not been denied may file a motion. 20 Because the entity trying to file a motion was neither a party nor a participant, its motion See Opinion No. 536 at P C.F.R (a(2. A participant is defined as either a party or Commission Trial Staff. See 18 C.F.R (b. Thus, BPA and WAPA, which were dismissed and are no longer parties, are not participants and may not file motions FERC 61,126 at P 12 (2014. Id. 6

7 [was] not properly before the Commission, and was dismissed. 21 For the same reasons, the Commission should disregard or give no weight to the BPA/WAPA Pleading here. III. THE BPA/ WAPA PLEADING IS ACTUALLY AN UNTIMELY REQUEST FOR REHEARING AND A COLLATERAL ATTACK ON OPINION NO. 536 Although styled as an Answer to the California Parties Request for Clarification or Rehearing, the BPA/WAPA Pleading does not answer any of the California Parties requests for clarification or rehearing. (Indeed, as noted above, the California Parties did not seek clarification or rehearing of Opinion No. 536 s discussion of BPA and WAPA because the California Parties agreed with the Commission s determinations concerning BPA and WAPA. BPA and WAPA mischaracterize their pleading as an Answer. It is no such thing. BPA and WAPA are improperly attacking the Commission s refusal to vacate the Presiding Judge s findings that BPA and WAPA committed tariff violations that raised the market clearing prices and that they owe refunds. BPA and WAPA chose not to seek rehearing of any of the Commission s findings or holdings, whether concerning BPA and WAPA or otherwise. BPA and WAPA, like all other parties, were required to file any requests for rehearing of Opinion No. 536 no later than December 10, Neither did so; neither filed anything until their so-called Answer of December 18, Their untimely pleading is nothing 21 Id. 7

8 more than a thinly-disguised collateral attack on Opinion No The Commission should dismiss it as such. Aggrieved parties must file requests for rehearing of Commission orders by the statutory due date or they waive their ability to challenge the Commission s orders. 22 For example, in Boston Gas Co. v. FERC, the United States Court of Appeals for the First Circuit considered an appeal in a case in which the petitioner had not filed its request for rehearing within thirty days, as the Natural Gas Act requires. 23 Explaining that an application for rehearing is a jurisdictional prerequisite to judicial review, the court noted that the time requirements of the statute are as much a part of the jurisdictional threshold as the mandate to file for a rehearing. 24 Thus: The fact that a [thirty] day limit is included in the statute clearly indicates that the Act requires not only administrative exhaustion but immediate action on the part of those aggrieved. All the parties to a proceeding before the Commission, as well as the Commission itself, have the statutory right to be free from prolonged uncertainty resulting from delayed efforts to resolve an issue. A formal time limit assures all participants that their claims will be settled expeditiously See 16 U.S.C. 825l(a (2005 (requiring aggrieved parties to seek rehearing within thirty days after the issuance of a Commission order and providing that [n]o proceeding to review any order of the Commission shall be brought by any entity unless such entity shall have made application to the Commission for a rehearing thereon.. 23 See 575 F.2d 975, 977 (1st Cir The relevant sections of the Natural Gas Act and the Federal Power Act (FPA are in all material respects substantially identical and decisions interpreting such sections may be cited interchangeably. See, e.g., Ark. La. Gas Co. v. Hall, 453 U.S. 571, 577 n.7 ( Boston Gas Co., 575 F.2d at Id. at 979. See also id. (explaining that, although the court s concerns may seem unduly technical,... they are of considerable importance both for administrative 8

9 The court concluded that, as a result of the petitioner s failure to file a timely application for rehearing, it deserved no more than to have its application summarily dismissed. 26 Similarly, in an earlier stage of this very proceeding, the Commission rejected a pleading styled as a request for clarification that was filed past the thirty-day deadline. The Commission explained that, we are not obligated to accept a filing solely on the basis of its party-bestowed title. 27 Rather, the Commission said, we examine the substance of the pleading. 28 The Commission found that the pleading cannot be interpreted to be a motion for clarification because it was actually an untimely attempt by the movant to seek rehearing of a prior Commission order. 29 The Commission explained that: Under [FPA Section 313], parties may seek rehearing within 30 days of issuance of a Commission order. Furthermore, filing a request for rehearing within the 30-day period is a statutory prerequisite for rehearing and the courts have repeatedly recognized that the Commission has no discretion to extend the deadline. Accordingly, the Commission itself has long held that we lack the authority to consider requests for rehearing filed more than 30 days after the issuance of a Commission order. 30 agencies and the courts and noting that the requirement to seek rehearing within thirty days is a tightly structured and formal provision Id. at 980. San Diego Gas & Elec. Co., 133 FERC 61,014 at P 15 (2010. Id. Id. Id. at P 20. See also ISO New England Inc., 121 FERC 61,125 at PP 11, 14 (2007 (rejecting an untimely motion to intervene and request for rehearing because, pursuant to FPA Section 313, an aggrieved party must file a request for rehearing within thirty days after the issuance of the Commission s order, and holding that [b]ecause the 9

10 The Commission rejected the pleading as a collateral attack on its earlier order. 31 Here, where the entire thrust of BPA and WAPA s Answer is to argue that, in essence, the Commission wrongly refused to vacate the Presiding Judge s findings concerning BPA and WAPA s tariff violations and overcharges, 32 the Commission is not obligated to accept the filing solely on the basis of its party-bestowed title. Rather, the Commission should reject what is actually an untimely request for rehearing and a collateral attack on Opinion No BPA and WAPA chose not to file a request for rehearing within the thirty-day statutory limit and the Commission should not permit them to bootstrap their Answer into a second chance to challenge Opinion No IV. CONCLUSION Wherefore, the California Parties respectfully request that the Commission reject BPA and WAPA s improper Answer for the reasons stated above. Respectfully submitted, 30-day rehearing deadline is statutory, it cannot be extended, and the Connecticut Attorney General s request for rehearing must be rejected as untimely San Diego Gas & Elec., 133 FERC 61,014 at P 20. See, e.g., BPA/WAPA Pleading at

11 /s/ Christopher E. Clay Christopher E. Clay Candace J. Morey Charlyn A. Hook Public Utilities Commission of the State of California 505 Van Ness Avenue, Fifth Floor San Francisco, CA Attorneys for the Public Utilities Commission of the State of California /s/ David Gustafson Kamala D. Harris Attorney General of California Mark Breckler Chief Assistant Attorney General Martin Goyette Senior Assistant Attorney General 455 Golden Gate Avenue, Suite San Francisco, CA David M. Gustafson Deputy Attorney General 1515 Clay Street, 20th Floor Oakland, CA /s/ Kevin J. McKeon Kevin J. McKeon Judith D. Cassel Whitney E. Snyder Hawke McKeon & Sniscak LLP 100 North Tenth Street, P.O. Box 1778 Harrisburg, PA Attorneys for the People of the State of California ex rel. Kamala D. Harris, Attorney General 11

12 /s/ Catherine M. Giovannoni Richard L. Roberts Jane I. Ryan Catherine M. Giovannoni A. Hunter Hodges Steptoe & Johnson LLP 1330 Connecticut Avenue, NW Washington, DC Russell C. Swartz J. Eric Isken Russell Archer Southern California Edison Company 2244 Walnut Grove Avenue Rosemead, CA Attorneys for Southern California Edison Company /s/ Stan Berman Stan Berman Eric Todderud Heather Curlee Sidley Austin LLP 701 Fifth Avenue, Suite 4200 Seattle, WA Mark D. Patrizio Joshua S. Levenberg Pacific Gas and Electric Company 77 Beale Street, B30A Post Office Box 7442 San Francisco, CA Attorneys for Pacific Gas and Electric Company Dated: January 2,

13 CERTIFICATE OF SERVICE I hereby certify that I have this day served an electronic copy of the foregoing document upon each person designated on the ListServ established in Docket No. EL Dated at Washington, D.C. this 2nd day of January, /s/ Kevin Haggerty Kevin Haggerty Steptoe & Johnson LLP 1330 Connecticut Avenue, NW Washington, DC ( khaggerty@steptoe.com

14 Document Content(s Resp to BPA & WAPAs Ans to CalParties RF Clarif or Reh'g.PDF