20140416-5073 FERC PDF (Unofficial 4/16/2014 11:34:33 AM UNITED STATES OF AMERICA BEFORE THE FEDERAL ENERGY REGULATORY COMMISSION San Diego Gas & Electric Company v. Sellers of Energy and Ancillary Services Investigation of Practices of the California Independent System Operator and the California Power Exchange Puget Sound Energy, Inc. v. Sellers of Energy and/or Capacity Investigation of Wholesale Rates of Public Utility Sellers of Energy and Ancillary Services in the Western Systems Coordinating Council Docket No. EL00-95-000 Docket No. EL00-98-000 Docket No. EL01-10-000 Docket No. EL01-68-000 Avista Energy, Inc. Docket No. ER01-1446-000 State of California, ex rel. Bill Lockyer, Attorney General of the State of California v. British Columbia Power Exchange Corp. Docket No. EL02-71-000 Avista Corporation Docket No. EL02-115-000 Avista Energy, Inc. Fact-Finding Investigation Into Possible Docket No. PA02-2-000 Manipulation of Electric and Natural Gas Prices American Electric Power Service Corporation Docket Nos. EL03-137-000, et al. Enron Power Marketing, Inc. and Enron Energy Docket Nos. EL03-180-000, et al. Services Inc. TransAlta Energy Marketing (U.S. Inc. and TransAlta Energy Marketing (California Inc. Docket Nos. EL03-176-000 EL03-202-000 California Independent System Operator Corporation Docket No. ER03-746-000 Investigation of Anomalous Bidding Behavior and Practices in Western Markets Docket No. IN03-10-000
20140416-5073 FERC PDF (Unofficial 4/16/2014 11:34:33 AM People of the State of California, ex rel. Edmund G. Brown, Jr. Attorney General of the State of California. v. Powerex Corp. (f/k/a British Columbia Power Exchange Corp. Docket No. EL09-56-000 JOINT REPLY COMMENTS OF TRANSALTA AND THE CALIFORNIA PARTIES Pursuant to 18 C.F.R. 385.602(f(2 (2013, TransAlta Energy Marketing (U.S. Inc., and TransAlta Energy Marketing (California Inc. (together TransAlta and the California Parties 1 ( the Settlement Proponents 2 submit these joint reply comments with respect to the Joint Offer of Settlement ( Settlement filed on March 18, 2014. Initial Comments on the Settlement were filed by the California Independent System Operator Corporation ( ISO, 3 the California Power Exchange Corporation ( PX, 4 Shell 1 For purposes of this pleading, California Parties means, collectively, Pacific Gas and Electric Company, San Diego Gas & Electric Company, Southern California Edison Company, the People of the State of California ex rel. Kamala D. Harris, Attorney General, and the Public Utilities Commission of the State of California. For purposes of the March 14, 2014, Settlement and Release of Claims Agreement ( Settlement Agreement, California Parties means the aforementioned entities as well as the California Department of Water Resources acting solely under the authority and powers created by Assembly Bill 1 of the First Extraordinary Session of 2001-2002, codified in Sections 80000 through 80270 of the California Water Code. 2 The Settlement Proponents use this term to avoid confusion with defined terms in the Settlement. 3 Comments of the California Independent System Operator Corporation in Support of the Joint Offer of Settlement Involving TransAlta, Docket Nos. EL00-95-000, et al. (Apr. 7, 2014 ( ISO Comments. 4 Initial Comments of the California Power Exchange Corporation on Joint Offer of Settlement Filed by TransAlta Energy Marketing (U.S. Inc., TransAlta Energy Marketing (California Inc. and the California Parties, Docket Nos. EL00-95-000, et al. (Apr. 4, 2014 ( PX Comments. 2
20140416-5073 FERC PDF (Unofficial 4/16/2014 11:34:33 AM Energy North America (US, L.P. and TransCanada Energy Ltd. (jointly, Indicated Respondents 5 and FERC Trial Staff ( Trial Staff. 6 The ISO supports the Settlement and the PX does not oppose it. The ISO and PX merely propose hold harmless conditions, which are acceptable to the Settlement Proponents. Indicated Respondents and Trial Staff partially oppose the Settlement on grounds that Section 2.2.5 of the Settlement Agreement adversely affects their alleged right in Docket No. EL01-10-085 to rely on evidence and other materials in the now-closed record, including evidence the Settlement Proponents adduced against each other. Although the Settlement Proponents do not agree with Indicated Respondents and Trial Staff s rationale, they are willing to agree to the requested result in order to eliminate the only opposition to the Settlement. The Settlement Proponents therefore clarify that, for the purpose of this Settlement, Section 2.2.5 should not be interpreted to prevent non-settling parties such as Indicated Respondents or Trial Staff in Docket No. EL01-10-085, or the Commission or other tribunal, from referring to or relying on any materials that are part of the record in that docket, including any materials placed in the record by the Settlement Proponents. 5 Indicated Respondents Comments Partially Opposing Joint Offer of Settlement, Docket Nos. EL00-95-000, et al. (Mar. 21, 2014 ( Indicated Respondents Comments. Indicated Respondents filed a single set of comments on March 21, 2014, opposing the California Parties settlements with: (1 Avista Utilities and Avista Energy, filed on March 6, 2014, and (2 TransAlta. These reply comments address only the Settlement between TransAlta and the California Parties. Separate reply comments as to the Avista Utilities and Avista Energy Settlement were filed on April 7, 2014. 6 Initial Comments of the Commission Staff on Joint Offers of Settlement, Docket Nos. EL00-95-000, et al. (Mar. 27, 2014 ( Trial Staff Comments. Trial Staff filed a single set of comments on March 27, 2014, opposing the California Parties settlements with: (1 Avista Utilities and Avista Energy, filed on March 6, 2014, and (2 TransAlta. These reply comments address only the Settlement between TransAlta and the California Parties. Separate reply comments as to the Avista Utilities and Avista Energy Settlement were filed on April 7, 2014. 3
20140416-5073 FERC PDF (Unofficial 4/16/2014 11:34:33 AM Given these representations, the Settlement should be treated as unopposed and the Settlement Proponents urge the Commission to approve it promptly without modification. I. REPLY COMMENTS A. The Settlement Proponents Do Not Oppose Certain Assurances Requested By the ISO and PX. The ISO and PX each requests that, in approving the Settlement, the Commission include certain language holding harmless the ISO and PX, as well as their directors, officers, employees, and consultants, with respect to the Settlement and accounting functions needed to implement the Settlement. 7 Such language, they note, has been included in Commission orders approving prior settlements. 8 TransAlta and the California Parties stated in the Joint Explanatory Statement that they would not oppose such a provision in the order approving the Settlement. 9 To avoid any uncertainty, they affirm that position here. B. The Settlement Proponents Do Not Oppose the Assurances Indicated Respondents and Trial Staff Seek Concerning Section 2.2.5. Indicated Respondents and Trial Staff s sole objection to the Settlement is that Section 2.2.5 of the Settlement Agreement impermissibly proposes to preclude [them] from relying on evidence and pleadings filed in Docket No. EL01-10-085 by the Settlement Proponents (i.e., evidence and pleadings directed by the Settlement Proponents against each other, in violation of Indicated Respondents and Trial Staff s alleged right to rely on the evidence and pleadings of others that are in the record of that case. 10 The Settlement Proponents do not agree with 7 ISO Comments at 4-7; PX Comments at 3-6. 8 ISO Comments at 4 n.6; PX Comments at 5. 9 Joint Explanatory Statement at 24, Attachment A to the March 18, 2014, Settlement filing. 10 Indicated Respondents Comments at 2-3; see Trial Staff s Comments at 3. 4
20140416-5073 FERC PDF (Unofficial 4/16/2014 11:34:33 AM Indicated Respondents and Trial Staff s rationale for objecting to Section 2.2.5. However, to remove the objection and promote certainty, the Settlement Proponents hereby clarify that Section 2.2.5 of the Settlement should not be interpreted to prevent non-settling parties such as Indicated Respondents and Trial Staff in Docket No. EL01-10-085, or the Commission or other tribunal, from referring to or relying on in ongoing or future proceedings any materials that are part of the record in that docket, including any materials placed in the record by the Settlement Proponents. C. Section 2.2.5 was not at issue before Judge McCartney in Docket No. EL01-10-085 Having agreed to the relief that Indicated Respondents and Staff seek, and thereby eliminating any opposition to the Settlement, the Settlement Proponents feel constrained to respond briefly, for the purpose of setting the record straight concerning Indicated Respondents incorrect assertions that the Settlement Proponents made misrepresentations about Section 2.2.5 to Deputy Chief Administrative Law Judge Bobbie J. McCartney, who presides in Docket No. EL01-10-085. 11 Contrary to Indicated Respondents suggestion, the Settlement Proponents did not mislead Judge McCartney about the provision that is now included as Section 2.2.5 in the Settlement Agreement, as part of their post-trial pleadings relating to entry into the Settlement. Those pleadings mentioned Section 2.2.5, but the Settlement Proponents could not have been more clear that they were not asking her to make any ruling on Section 2.2.5. 12 Judge 11 Indicated Respondents Comments at 3-7. 12 The only issue presently before Your Honor in the Joint Motions is whether to suspend the initial decision as it relates to the California Parties allegations against [TransAlta]. To grant that relief, Your Honor need not make any decision that would limit the ability of Your Honor or any non-settling party to rely on evidence in the closed record ; rather, Your Honor need only write an Initial Decision that refrains from publicly addressing and resolving the California Parties claims against TransAlta. Joint Request to File Answer and Answer to Indicated 5
20140416-5073 FERC PDF (Unofficial 4/16/2014 11:34:33 AM McCartney s order expressly stated that no settlement or settlement provision (such as Section 2.2.5 was before her for disposition and that the issue of whether Indicated Respondents would be permitted to rely for their own purposes on evidence submitted by TransAlta or the California Parties was not presented to her. 13 CONCLUSION WHEREFORE, for the foregoing reasons, TransAlta and the California Parties respectfully request that the Commission promptly approve the Settlement without modification. Respectfully submitted, /s/ Stephen Angle Stephen Angle Damien R. Lyster Vinson & Elkins 2200 Pennsylvania Avenue, NW Suite 500 West Washington, DC 20037-1701 John Kousinioris Chief Legal and Compliance Officer TransAlta Corporation 110 12 th Avenue, SW P.O. Box 1900, Station M Calgary, Alberta T2P 2M1 Attorneys for TransAlta Energy Marketing (U.S. Inc. and TransAlta Energy Marketing (California Inc. /s/ Richard L. Roberts Richard L. Roberts Jane I. Ryan Steptoe & Johnson LLP 1330 Connecticut Avenue, NW Washington, DC 20036 Russell C. Swartz J. Eric Isken Russell Archer Southern California Edison Company 2244 Walnut Grove Avenue Rosemead, CA 91770 Attorneys for Southern California Edison Company Respondent s Answer in Partial Opposition to Joint Motions for Procedural Relief, Docket No. EL01-10-085, at 4 (Mar. 5, 2014 (footnotes omitted. 13 [T]he Movants have clarified that they simply seek to suspend that part of the Initial Decision that decides claims that the California Parties made against TransAlta and Avista and are not seeking to withdraw evidence from the closed record or to limit the undersigned s ability, or any non-settling parties ability, to rely on evidence in the closed record for other purposes. Order Granting Procedural Relief, Docket No. EL01-10-085, at 5 (Mar. 6, 2014. 6
20140416-5073 FERC PDF (Unofficial 4/16/2014 11:34:33 AM /s/ James R. Dean, Jr. James R. Dean, Jr. Covington & Burling LLP 1201 Pennsylvania Avenue, NW Washington, DC 20004-2401 Randy Nicholson San Diego Gas & Electric Company 8330 Century Park Court, CP32H San Diego, CA 92123 Attorneys for San Diego Gas & Electric Company /s/ Stan Berman Stan Berman Eric Todderud Sidley Austin LLP 701 Fifth Avenue, Suite 4200 Seattle, WA 98104 Mark D. Patrizio Joshua S. Levenberg Pacific Gas and Electric Company 77 Beale Street, B30A Post Office Box 7442 San Francisco, CA 94120 Attorneys for Pacific Gas and Electric Company 7
20140416-5073 FERC PDF (Unofficial 4/16/2014 11:34:33 AM /s/ Christopher E. Clay Karen V. Clopton, Acting General Counsel Christopher E. Clay Candace J. Morey Public Utilities Commission of the State of California 505 Van Ness Avenue San Francisco, CA 94102 Attorneys for the Public Utilities Commission of the State of California /s/ David M. Gustafson Kamala D. Harris Attorney General of the State of California Mark Breckler Chief Assistant Attorney General Martin Goyette Senior Assistant Attorney General 455 Golden Gate Avenue, Suite 11000 San Francisco, CA 94102-7004 David M. Gustafson Deputy Attorney General 1515 Clay Street, 20 th Floor Oakland, CA 94612-0550 /s/ Kevin J. McKeon Kevin J. McKeon Judith D. Cassel Whitney E. Snyder Hawke McKeon & Sniscak LLP Harrisburg Energy Center 100 North Tenth Street P.O. Box 1778 Harrisburg, PA 17101 Attorneys for the People of the State of California ex rel. Kamala D. Harris, Attorney General April 16, 2014 8
20140416-5073 FERC PDF (Unofficial 4/16/2014 11:34:33 AM CERTIFICATE OF SERVICE I hereby certify that on this 16 th day of April 2014, I have caused to be served a copy of the foregoing upon all parties on the official service list in these proceedings in accordance with the requirements of Rule 2010 of the Commission s Rules of Practice and Procedure, 18 C.F.R. 385.2010 (2013. /s/ Whitney E. Snyder Whitney E. Snyder
20140416-5073 FERC PDF (Unofficial 4/16/2014 11:34:33 AM Document Content(s Joint_Reply_Comments_of_TransAlta_Energy_Marketing_et_al.PDF...1-9