UNITED STATES OF AMERICA BEFORE THE FEDERAL ENERGY REGULATORY COMMISSION

Transcription

1 UNITED STATES OF AMERICA BEFORE THE FEDERAL ENERGY REGULATORY COMMISSION CAlifornians for Renewable Energy, Inc.; Michael E. Boyd, and Robert M. Sarvey, v. Petitioners, California Public Utilities Commission; California Department of Water Resources; Pacific Gas and Electric Company; Southern California Edison Company; and Mountain View Power Partners, Docket No. EL QF QF Respondents. MOTION TO DISMISS PETITION, OR IN THE ALTERNATIVE MOTION TO INTERVENE AND PROTEST OF THE CALIFORNIA UTILITIES TO THE CALIFORNIANS FOR RENEWABLE ENERGY PETITION FOR ENFORCEMENT Jennifer T. Shigekawa Cathy A. Karlstad Southern California Edison Company 2244 Walnut Grove Avenue Rosemead, CA Telephone: (626) Facsimile: (626) Attorneys for Southern California Edison Company Charles R. Middlekauff Pacific Gas and Electric Company 77 Beale Street, B30A San Francisco, CA Telephone: (415) Facsimile: (415) Attorney for Pacific Gas and Electric Company

2 Pursuant to Rules 211 and 212 of the Federal Energy Regulatory Commission s ( Commission or FERC ) Rules of Practice and Procedure, 1 Southern California Edison Company ( SCE ) and Pacific Gas and Electric Company ( PG&E ) (together, the California Utilities ) respectfully request that the Commission dismiss the Petition for Enforcement ( Petition ) filed on July 1, 2012, by the CAlifornians for Renewable Energy, Michael Boyd, and Robert Sarvey (collectively CARE ) and/or otherwise decline to issue a Notice of an Intent Not to Act. In the alternative, the California Utilities move to intervene and protest the Petition and request that FERC issue a Notice of an Intent Not to Act. The filing of a Public Utility Regulatory Policies Act ( PURPA ) Enforcement Petition under Section 210(h) is a pre-requisite to a federal court action against a state commission. Typically, when unsupported and unfounded PURPA Enforcement Petitions are filed, the Commission summarily issues an Intent Not to Act without any substantive comment. Such a response here, however, could lead to the wasting of tens of thousands of dollars in California taxpayer money at federal court. The hurdle of filing a PURPA Enforcement Petition at FERC should be real. By dismissing the Petition here as not in accordance with PURPA or Rule 203, such that it must be re-filed in accordance with the law, before the Commission takes any action at all, the Commission may be able to prevent CARE from wasting further resources. While the adage if at first you don t succeed; try, try again may be helpful for children, it is certainly not the approach that should be taken in filing petitions at the Commission. Yet, this is exactly the litigation approach that CARE has repeatedly decided to take. In recent years, CARE has filed numerous complaints and petitions against the California Public Utilities Commission ( CPUC ) and/or the California Utilities that are filled with vague, unclear, and 1 18 CFR and (2011). -1-

3 often incomprehensible allegations of wrong-doing. The Commission has repeatedly warned CARE that complaints and petitions that are based solely on unsubstantiated allegations, without any evidence or analysis, fail to meet the Commission Rules 203 and 206 and will be summarily dismissed. 2 CARE apparently has decided not to heed these warnings. In the latest iteration of its many petitions and complaints, CARE alleges that the CPUC and the California Utilities have violated the PURPA. 3 Notably, CARE s latest petition is virtually identical to a petition filed by CARE last year and includes many paragraphs that are pulled verbatim from CARE s July 2011 petition. 4 As with all of CARE s earlier complaints and petitions, this Petition fails to include any evidence or analysis. Instead, CARE seems content to base its Petition on unsupported and vague allegations, many of which concern activity that is not related to PURPA. In short, CARE continues to ignore this Commission s earlier warnings as to what constitutes a sufficient complaint or petition. CARE s Petition should be summarily dismissed without the issuance of a Notice of Intent Not to Act for two reasons. First, the California Utilities are improperly named in the Petition as Respondents because a Qualifying Facility ( QF ) may only bring a PURPA enforcement action against a state regulatory agency or nonregulated electric utility. The California Utilities are neither. Second, the Petition fails to satisfy Rule 203 which establishes the minimum requirements for a FERC pleading. In the alternative, if the Commission decides not to dismiss CARE s Petition outright, the Commission should issue a Notice of Intent Not to See e.g., CARE v. CPUC, et al., 120 FERC 61,272 (2007); CARE v. CPUC, et al., 129 FERC 61,075 (2009); CARE v. CPUC, et al., 131 FERC 61,102 (2010); CARE v. PG&E, et al., 134 FERC 61,060 (2011); CARE v. PG&E, et al., 134 FERC 61,207 (2011). CARE has alleged similar claims against SCE and the CPUC in a federal district court action in the Central District of California. See Solutions for Utilities, Inc.; Californians for Renewable Energy, Inc. v. California Public Utilities Commission; Southern California Edison, Case No. CV SJO (June 10, 2011). See CARE s Petition for Enforcement filed in Docket No. EL on July 12,

4 Act on the basis that the substantive allegations made by CARE are meritless. I. FERC SHOULD DISMISS THE PETITION WITHOUT ISSUING A NOTICE OF INTENT NOT TO ACT ON THE GROUNDS THAT THE PETITION DOES NOT ABIDE BY EITHER PURPA OR THE COMMISSION S PLEADING REGULATIONS A. The Petition Includes Improper Respondents CARE has improperly named the California Utilities as Respondents. A PURPA Enforcement Petition against a regulated utility is prohibited as a matter of law. PURPA requires state regulatory authorities, such as the CPUC, to implement PURPA pursuant to FERC s regulations. 16 U.S.C. 824a-3(a) and (f)(1); Power Res. Group, Inc. v. Public Util. Comm n. of Texas, 422 F.3d. 231 (5th Cir. 2005). PURPA sets up an elaborate enforcement scheme in which the roles of... [FERC], the state public utility commissions (PUCs), and the federal courts are specifically delineated. Connecticut Valley Elect. Co., Inc. v. FERC, 208 F.3d 1037, 1043 (D.C. Cir. 2000). That enforcement scheme reads as follows: (h) Commission enforcement (1) For purposes of enforcement of any rule prescribed by the Commission under subsection (a) of this section with respect to any operations of an electric utility, a qualifying cogeneration facility or a qualifying small power production facility which are subject to the jurisdiction of the Commission under part II of the Federal Power Act [16 U.S.C. 824 et seq.], such rule shall be treated as a rule under the Federal Power Act [16 U.S.C. 791a et seq.]. Nothing in subsection (g) of this section shall apply to so much of the operations of an electric utility, a qualifying cogeneration facility or a qualifying small power production facility as are subject to the jurisdiction of the Commission under part II of the Federal Power Act. (2)(A) The Commission may enforce the requirements of subsection (f) of this section against any State regulatory authority or nonregulated electric utility. For purposes of any such enforcement, the requirements of subsection (f)(1) of this section -3-

5 16 U.S.C. 824a-3(h). shall be treated as a rule enforceable under the Federal Power Act [16 U.S.C. 791a et seq.]. For purposes of any such action, a State regulatory authority or nonregulated electric utility shall be treated as a person within the meaning of the Federal Power Act. No enforcement action may be brought by the Commission under this section other than - (i) an action against the State regulatory authority or nonregulated electric utility for failure to comply with the requirements of subsection (f) of this section (2) or (ii) an action under paragraph (1). (B) Any electric utility, qualifying cogenerator, or qualifying small power producer may petition the Commission to enforce the requirements of subsection (f) of this section as provided in subparagraph (A) of this paragraph. If the Commission does not initiate an enforcement action under subparagraph (A) against a State regulatory authority or nonregulated electric utility within 60 days following the date on which a petition is filed under this subparagraph with respect to such authority, the petitioner may bring an action in the appropriate United States district court to require such State regulatory authority or nonregulated electric utility to comply with such requirements, and such court may issue such injunctive or other relief as may be appropriate. The Commission may intervene as a matter of right in any such action. Under this scheme, a QF may petition the Commission to enforce the requirements of 16 U.S.C. 824a-3(f), but only as provided in subparagraph (A) of that section. Under subsection (A), the Commission may enforce PURPA only against any State regulatory authority or nonregulated electric utility. PURPA does not authorize a FERC enforcement action against a regulated utility and a petitioner cannot request that FERC undertake any such enforcement action. Similarly, PURPA does not authorize a federal court enforcement action against a regulated utility once FERC declines to act. 5 5 North Hartland LLC v. Central Vermont Public Service Corp., 105 FERC 61,393 at P 6 (2003). -4-

6 B. The Petition Does Not Meet the Requirements of Rule 203 Rule 203 requires parties filing petitions and complaints to include relevant facts and information. 6 The Commission has explained that bald allegations and assertions are not sufficient to support a complaint. 7 More specifically, the Commission has repeatedly told CARE that unsupported allegations without any evidentiary support are not a sufficient basis for a complaint. 8 The Commission has noted that [t]he vast majority of the complaints filed by CARE have been dismissed for failure to comply with the Commission s rules and standards and provided an exhaustive list of these complaints. 9 Like Rule 206, Rule 203 requires that any pleading must include a basis in fact and law for the positions taken. The Petition at issue here suffers from the exact same defects as CARE s many complaints. CARE s Petition is replete with unsupported general allegations of alleged improper conduct. For example, CARE asserts that the CPUC has effectively surrendered its regulatory authority to the California Utilities, 10 that the CPUC and the California Utilities are generally indistinguishable, 11 that the California Utilities have refused to abide by PURPA, 12 and the CPUC and the California Utilities have continued efforts to suppress and prevent small power CFR (2011). CARE v. CPUC, et al., 129 FERC 61,075 at P. 13. CARE v. CPUC, et al., 120 FERC 61,272 at PP (CARE failed to provide any factual support for its allegations); CARE v. CPUC, et al., 129 FERC 61,075 at PP (CARE failed to provide any factual allegations to support complaint); CARE v. CPUC, et al., 131 FERC 61,102 at P. 9 (same); CARE v. PG&E, et al., 134 FERC 61,060 at P. 56 (same). CARE v. PG&E, et al., 134 FERC 61,207, n. 17. Petition at P. 13. Id. at P. 14. Id. at P

7 production facilities and nontraditional electricity generating facilities. 13 CARE offers no evidence to support these serious allegations other than the rhetoric contained in its own Petition. This failure is not surprising, as the pleading makes clear that CARE cannot distinguish what power sale transactions are subject to the strictures of PURPA and which are not. Separating out these general and unsupported allegations, CARE s actual claims regarding the alleged violation of PURPA are limited to Paragraphs The specific allegations are equally as defective. CARE fails to include a single specific instance or fact that would demonstrate that the CPUC is violating PURPA. Instead, CARE simply includes generalized statements regarding interconnection issues, avoided costs, and unsubstantiated allegations of collusion (Paragraphs 25-28), alleged contracting practices (Paragraphs 28-30), and a docket list of CPUC proceedings (Paragraphs 31-33). For example, CARE claims that PG&E has refused to enter into QF contracts with CARE members. 14 CARE fails to identify the CARE members; provide a date when the alleged events occurred; provide any evidence that the unnamed CARE members requested a QF contract and provide any evidence concerning PG&E s response. CARE also alleges that the California Utilities have entered into contracts with larger energy suppliers that allegedly violate PURPA. 15 CARE identifies only one non- PURPA contract, but fails to explain how a non-purpa contract could even possibly violate PURPA. Even a cursory review demonstrates that CARE s Petition fails to satisfy the requirements of Rule 203 and thus it should be summarily dismissed Id. at P. 26 Id. at P. 30. Id. at P

8 C. The Appropriate Remedy Is to Refuse to Act at All on the Petition as Filed The Commission should dismiss this Petition and require a complete reformation and refiling of the Petition before even considering whether to issue an Intent Not to Act. Such a remedy will emphasize, once again, the importance of abiding by laws and regulations when filing FERC pleadings. 16 This remedy is particularly appropriate given the statute s enforcement scheme, whereunder obtaining an Intent Not to Act is the hall pass needed to proceed to federal court. The Commission should not hand out such a hall pass to an entity that has proven incapable of even discerning the difference between a PURPA contract and a non-purpa contract. If CARE is incapable of drafting a pleading that meets Section 203 s requirements, it should not obtain the permission necessary to file a petition in federal court where the California Utilities would need to expend further resources to combat CARE s nonsensical allegations. II. CARE S ALLEGATIONS ARE BASELESS If the Commission declines to dismiss the Petition, it should issue an Intent Not to Act. Although CARE s Petition is lengthy, the actual allegations of violations of PURPA are relatively short. More importantly, all of CARE s allegations are unsupported by any sufficient evidence and are often factually incorrect. Below, the California Utilities briefly respond to each of CARE s allegations. First, CARE asserts that PG&E and the other California Utilities have not afforded QFs a means to interconnect to the distribution or transmission systems. 17 This assertion is factually incorrect. Generators, including QFs, can interconnect to the CAISO-controlled transmission system under the CAISO s Generator Interconnection Process ( GIP ) and can interconnect to A reminder that Petitions for Enforcement may not be filed against regulated electric utilities at FERC (or in federal court) under 16 U.S.C. 824a-3(h) also may lead CARE to review that statute and avoid improperly naming the California Utilities as a defendant in a federal court cause of action. Petition at P. 25(a). -7-

9 the California Utilities respective distribution systems under Commission-approved Wholesale Distribution Access Tariffs ( WDAT ), which have been in place since 1997, or under the CPUC s interconnection rules (i.e., Rule 21). 18 PG&E and SCE recently made filings at the CPUC proposing to improve the Rule 21 process, 19 which is not, as CARE alleges (at P. 30) applied to Net Metered Customers instead of PURPA. 20 Thus, CARE s assertions that QFs have not been afforded a means to interconnect into the California electric grid are baseless as evidenced by the fact that the two QFs identified in the Petition have long been interconnected. Second, CARE asserts that the California Utilities have precluded small QF interconnections by entering into contracts with larger generators that effectively crowd out the ability of smaller QFs to interconnect. 21 CARE offers no facts to support this assertion. More importantly, the GIP, WDAT, and Rule 21 include specific rules and procedures for processing interconnection requests to ensure that all generators, regardless of their size, are treated consistently and fairly. Additionally, CARE fails to provide any evidence that the California Utilities are entering into contracts with larger generators to preclude them from entering into power purchase agreements ( PPAs ) with small QFs. CARE identifies only one contract to The appropriate interconnection vehicle depends on a variety of facts. See PG&E s Advice Letter 3864-E, filed June 17, 2011 at the CPUC, available at: SCE s Advice Letter 2593-E, filed June 17, 2011 at the CPUC, available at Rule 21 applies to customers that: 1) sell no wholesale power and 2) QFs selling under PURPA to their host utility. The former category includes traditional net metering customers and the latter includes customers participating in the new, Net Metering Surplus Compensation program. CARE does not even understand the very basic fact that the CPUC Decision it cites ruled that the Net Metering Surplus Compensation program at issue was a PURPA program. In any case, Rule 21 applies to QFs selling under other PURPA programs as well. Petition, at PP. 25(b) and

10 support its allegations, 22 but fails to demonstrate how the agreement interfered with the ability of their generators to either interconnect or sell power. Third, CARE claims that wholesale power rates for QFs in California are not set at avoided costs. 23 PURPA makes clear that the state is charged with determining avoided cost, subject to Commission oversight, which is the highest rate at which utilities may be compelled to enter into PURPA contracts. In California, the CPUC has conducted avoided cost proceedings. 24 The CPUC recently adopted a comprehensive Qualifying Facility and Combined Heat and Power ( QF/CHP ) Settlement Agreement that established the avoided cost applicable to under 20MW QF generators paid at avoided cost. 25 CARE has not shown the wherewithal to determine which of the CPUC s rulemakings and decisions relate to PURPA and which have absolutely nothing to do with PURPA, let alone support a claim that those decisions that are PURPA decisions violate PURPA. Its chart on pages list programs which have no relation to PURPA, such as SCE s Solar Photovoltaic Program. CARE simply makes general assertions that wholesale rates generally do not reflect avoided costs. Fourth, CARE suggests that CPUC Decision , regarding a PPA between the California Department of Water Resources ( DWR ) and Mountain View Power Partners ( MVPP ) is unjust and unreasonable. 26 CARE claims that the MVPP PPA violates PURPA, Id., P. 29. Id., P. 25(c). The most recent Commission proceeding conducted on avoided cost was the Avoided Cost OIR (R.) which resulted in D establishing a Commission adopted avoided cost which was recently superseded by the adoption of the OF/CHP Settlement Agreement in D Opinion on Future Policy and Pricing for Qualifying Facilities, D , modified Decision Adopting Proposed Settlement, D , (CPUC Dec. 16, 2010), reh g denied and modified in D (CPUC Mar. 24, 2011). See also Pacific Gas and Electric Company, 135 FERC 61,234 (2011) at P. 5 (describing the QF/CHP Settlement generally). Petition, at PP. 27 and

11 which is absolutely impossible because it is not a PURPA contract. The MVPP PPA is a marketbased power sale agreement subject to exclusive FERC jurisdiction. Avoided cost has absolutely no relevance to FERC-jurisdictional market-based sales agreements, but CARE continues to be convinced otherwise. 27 Fifth, CARE claims that the PPAs offered by the California Utilities contain non-price terms which are not fair and just under the totality of the circumstances Each of the PURPA programs administered by the CPUC includes, or will include, a form PPA for QFs. CARE fails to identify a single, specific term or condition that it believes is not fair and just. If CARE had concerns about the terms and conditions of QF contracts, it needed to identify such contracts and explain its position. Pointing to the terms and conditions of a market-based contract, such as the MVPP PPA, proves nothing about any PURPA program contract. Sixth, CARE claims that the CPUC approved SCE s scheme to bundle[] [Renewable Energy Credits] and assign them, without just and fair compensation It is difficult to respond to this assertion because CARE and SCE have no contract with one another. Moreover, California law states that: (4) Renewable energy credits shall not be created for electricity generated pursuant to any electricity purchase contract with a retail seller or a local publicly owned electric utility executed before January 1, 2005, unless the contract contains explicit terms and conditions specifying the ownership or disposition of those credits Ever since FERC issued Cal. Pub. Utils. Comm n, 132 FERC 61,047 (2010), CARE has suffered from a misunderstanding that the price in every California Utilities purchase power contract must be set at avoided cost. CARE has thus littered the refund hearing with pleadings claiming that every Settlement[s] entered in to by both non-jurisdictional and jurisdictional Parties in this proceeding with the California Parties, that exceed the three IOUs avoided costs during the applicable refund period, are not valid. Offer of Proof of Californians for Renewable Energy, Inc. (CARE) at 4, Dkt. No. EL00-95 (Apr. 13, 2012). Petition at P. 25(d). Petition at P. 25(e). -10-

12 (5) Renewable energy credits shall not be created for electricity generated under any electricity purchase contract executed after January 1, 2005, pursuant to the federal Public Utility Regulatory Policies Act of 1978 Cal. Pub. Util. Code (a)(5) (West Supp. 2007). Cal. Pub. Util. Code (a)(4) & (5). It thus would be rather difficult to bundle a REC in connection with any relatively new QF selling under PURPA because no RECs are created by such QFs. If CARE wants to make a claim about a pre-2005 PURPA contract that involves a REC, it needs to identify such a contract. 30 Finally, CARE alleges that the CPUC has approved contracts, activities and proposals of the California Utilities which do not comply nor conform with PURPA and its FERC adopted implementing regulations. 31 The Petition is again devoid of any explanation as to how the extensive list of CPUC proceedings and decisions included in the Petition cited violated PURPA. Other than listing a number of CPUC proceedings, CARE fails to provide any basis for its claim that the results of these proceedings do not comply with PURPA. As noted, many of the proceedings do not even have any relationship to PURPA at all. III. MOTION TO INTERVENE The California Utilities will be directly affected by the outcome of the foregoing proceeding as CARE requests the Commission to take action against the California Utilities. They thus have an immediate interest in the outcome of this proceeding. The California Utilities interests cannot be represented by any other party and, consequently, the California Utilities respectfully request that the Commission grant them permission to intervene in this proceeding The MVPP PPA is not a PURPA contract. 105 FERC 61,004 (2003) at P

13 A. SCE SCE is an investor owned utility with a principal place of business at 2244 Walnut Grove Avenue, Rosemead, California SCE designates the following persons for service on the Commission s service list in this proceeding: Cathy A. Karlstad Southern California Edison Company P.O. Box Walnut Grove Avenue Rosemead, California (626) cathy.karlstad@sce.com Jennifer L. Key Steptoe & Johnson LLP 1330 Connecticut Ave., N.W. Washington, D.C (202) jkey@steptoe.com B. PG&E PG&E is an investor owned utility with a principal place of business at 77 Beale Street, San Francisco, California PG&E designates the following person for service on the Commission s service list in this proceeding: Charles R. Middlekauff Pacific Gas and Electric Company 77 Beale Street B30A Post Office Box 7442 San Francisco, CA (415) crmd@pge.com -12-

14 IV. CONCLUSION Wherefore, the California Utilities respectfully requests that the Commission dismiss the CARE Petition without issuing an Intent Not to Act or, in the alternative, issue a Notice of Intent Not to Act. Respectfully submitted, By: /s/ Jennifer T. Shigekawa JENNIFER T. SHIGEKAWA On Behalf of the California Utilities: Pacific Gas and Electric Company and Southern California Edison Company Dated: July 23,

15 CERTIFICATE OF SERVICE I hereby certify that I have this day served the foregoing document upon each person designated on the official service list compiled by the Secretary in this proceeding. Dated at Rosemead, California this 23rd day of July, /s/ Monica L. Romero Monica L. Romero