On February 24, 2011, the California Public Utilities Commission held its regularly scheduled agenda meeting. President Peevey started the meeting by noting the recent passing of former Commissioner Frederick Duda, who served on the Commission from 1984-1991. During his tenure, Commissioner Duda was active in matters involving gas industry restructuring, the Diablo Canyon nuclear power plant, the new regulatory framework for telephone companies, and the development of rules governing wireless carriers. Most of the meeting was devoted to hearing from the public, who addressed the commissioners on the importance of the new gas pipeline safety proceeding, the lessons to be learned from the San Bruno pipeline explosion, and their objections to deployment of smart meters by PG&E based on health and privacy concerns. Commissioners Florio and Simon joined President Peevey on the dais. Commissioner Sandoval was unavoidably absent. The Governor has not yet appointed the fifth member of the Commission. Items of interest from the meeting are discussed in further detail below.
REGULAR AND CONSENT AGENDA ITEMS
- Amendments to the Rules of Practice and Procedure (Resolution ALJ-260, Item 3, adopted on consent agenda) — The Commission approved changes to the Rules of Practice and Procedure to be submitted to the Office of Administrative Law for inclusion in the California Code of Regulations. The resolution clarifies the rules governing the parties eligible to participate in the rehearing process and implements minor changes in the formal requirements for documents tendered to the Commission. The draft resolution voted upon at the meeting is available at: http://docs.cpuc.ca.gov/PUBLISHED/AGENDA_RESOLUTION/131107.htm.
- Certificate of Public Convenience and Necessity Granted to DTS of CA, Inc. (Item 5, adopted on consent agenda) — This Decision grants a certificate of public convenience and necessity (CPCN) to DTS of CA, Inc. to construct telecommunications facilities and to provide local exchange and interexchange service to unserved territories in California. DTS plans to provide service using satellite technology. The CPCN granted provides DTS with exclusive authority to provide service to all currently unserved areas for twelve months from the effective date of the decision. After that time, if another carrier applies to provide service within any local access and transport area area where DTS is not providing service to at least one customer, DTS must surrender that local access and transport area without protest. The proposed decision considered at the meeting is available at: http://docs.cpuc.ca.gov/Cyberdocs/AgendaDoc.asp?DOC_ID=3D445008.
- Annual Fee to Implement the Digital Infrastructure and Video Competition Act of 2006 (Item 26, adopted on consent agenda) — This Resolution reduces the annual fee for fiscal year 2010-2011 to be paid by each video franchise holder to 4.17 cents per household in its video franchise territory, a 3.9% decrease from the prior rate. The draft resolution associated with this item is available at: http://docs.cpuc.ca.gov/Cyberdocs/AgendaDoc.asp?DOC_ID=3D444633.
- SureWest Communications and SureWest Telephone to Encumber Assets (Item 38, adopted on consent agenda) — This Decision grants an application to encumber the assets of SureWest Telephone for the purpose of securing debt. The proposed decision voted upon by the Commission is available at: http://docs.cpuc.ca.gov/Cyberdocs/AgendaDoc.asp?DOC_ID=3D445014.
- Rulemaking into Issues Concerning Master-Metering at Mobilehome Parks (Item 49, adopted on regular agenda) — Partly in response to a petition by the Western Manufactured Housing Community Association, this Decision opens a rulemaking to examine what should be done to encourage the replacement of submeter systems that supply electricity and natural gas at mobile home parks and manufactured housing communities with direct utility service. The proposed decision associated with this item is available at http://docs.cpuc.ca.gov/Cyberdocs/AgendaDoc.asp?DOC_ID=3D445063.
- Rulemaking to Adopt New Safety and Reliability Regulations for Natural Gas Transmission Pipelines and Related Ratemaking Mechanisms (Item 50, adopted on regular agenda) — This Decision institutes a rulemaking to examine the rules governing natural gas transmission transmission pipelines. Commissioner Florio, introducing this item, stated that he was deeply committed to improving the safety of the gas transmission system. This proceeding will be forward-looking to establish a new model for gas pipeline safety. Past conduct, the San Bruno explosion for example, would be considered separately. Among the many objectives identified by Commissioner Florio were: (1) providing the public with the means to make their views known; (2) providing the public with expert panel findings and recommendations; and (3) developing safety related changes related to the operation and documentation of gas pipeline systems. Notably, Commissioner Florio identified ratemaking changes as a topic to be examined in connection with implementation of safety related changes. Options in this regard could include reducing the rate of return on utility plant investments related to improving infrastructure safety or implementation of a sharing mechanism between ratepayers and shareholders for the cost of improving facilities. A recent draft of the rulemaking voted on by the Commission is available at: http://docs.cpuc.ca.gov/Cyberdocs/AgendaDoc.asp?DOC_ID=3D445123.
- Order Instituting Investigation into Operations and Practices of Pacific Gas and Electric Company with Respect to Facilities Records for its Natural Gas Transmission System Pipelines (Item 62, adopted in closed session) – In closed session, the Commission adopted an order instituting investigation to determine whether Pacific Gas and Electric Company (PG&E) violated any provision or provisions of the California Public Utilities Code, Commission general orders or decisions, or other applicable rules or requirements pertaining to safety recordkeeping for its gas service and facilities. This proceeding will pertain to PG&E’s safety recordkeeping for the San Bruno, California, gas transmission pipeline that ruptured on September 9, 2010, killing eight persons. This investigation will also review and determine whether PG&E’s recordkeeping practices for its entire gas transmission system have been unsafe and in violation of the law. The Order Instituting Investigation is available at: http://docs.cpuc.ca.gov/published/FINAL_DECISION/131209.htm.
SIGNIFICANT HELD OR WITHDRAWN ITEMS
- Resolution Making the Rates of Cost-Of-Service Rate Regulated Utilities Subject to Refund Under Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (Res. L-411, Item 53, held by President Peevey to 3/10/11) — This Draft Resolution proposes establishment, for each cost-of-service rate-regulated utility with the exception of Class C and D water and sewer utilities, a memorandum account to reflect, on a CPUC-jurisdictional, revenue requirement basis, impacts from the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act Of 2010 (“the “2010 Tax Law”).This memorandum account would track on a revenue requirement basis the impacts of the 2010 Tax Law not otherwise reflected in rates during the period starting on the effective date of the resolution if adopted until the effective date of revenue requirement changes in each utility’s next general rate case. This memorandum account would be used in determining whether any future rate reduction is appropriate to reflect impacts of the 2010 Tax Law. The draft resolution associated with this item is available at: http://docs.cpuc.ca.gov/Cyberdocs/AgendaDoc.asp?DOC_ID=3D445119.
- Nexus Communications Inc.’s Limited Eligible Telecommunications Carrier Status Within California (Res T-17258, Item 27, held by staff to 3/10/11) — This Draft Resolution would deny a request for limited eligible telecommunications carrier status. The Draft Resolution associated with this item is available at: http://docs.cpuc.ca.gov/Cyberdocs/AgendaDoc.asp?DOC_ID=3D442483.
- Virgin Mobile USA, LLC for a Limited Eligible Telecommunications Carrier Status (Res. T-17284, Item 19 held by staff to 3/10/11) — This Draft Resolution would grant a request for limited eligible telecommunications carrier status. The Draft Resolution associated with this item is available at: http://docs.cpuc.ca.gov/Cyberdocs/AgendaDoc.asp?DOC_ID=3D441923.
- Order to Show Cause Why a Fine Should not be Levied for Failure to Disclose Public Utility Revenue in California High Cost Fund A Advice Letters and for Violation of Rule 1 (Item 51, held by Commissioner Simon to 3/10/11) — This Proposed Decision would impose fine on certain small local exchange carriers for allegedly failing to disclose receipt of funds from the Rural Telephone Bank Dissolution. A recent version of the draft under consideration by the Commission is available at: http://docs.cpuc.ca.gov/Cyberdocs/AgendaDoc.asp?DOC_ID=3D445124.
MANAGEMENT AND COMMISSIONER REPORTS
- Commissioner Florio announced that Melissa Slawson would join his interim staff. He also reported on the Listening Tour that he has initiated to meet people throughout California to whom he was appointed to serve. Commissioner Florio’s Listening Tour was received warmly during the public comment portion of the meeting.
- Commissioner Simon reported on his participation on a panel during the San Jose Clean Tech conference and on various activities at the latest meeting of the National Association of Regulatory Utility Commissioners.
- President Peevey commented on upcoming meeting of the State Broadband Council and on his activities at the NARUC meeting.