PG&E Corporation

118 Cal. App. 4th 1174 (May 21, 2004), 13 Cal. Rptr. 3d 630, 2004 Cal. App. LEXIS 785

The Court of Appeal (First District, Division 5) affirmed a Commission decision denying the motions of three holding companies (Petitioners) for dismissal from a Commission investigation of the Petitioners’ actions during the electricity crisis of 2000-1.  The Court held that the Commission’s construction of statutes delimiting the Commission’s jurisdiction was not entitled to the level of deference required (described in Edison, Para. 27, infra) with regard to the Commission’s construction of other statutes.  (In 2013, the U.S. Supreme Court adopted a contrary view with regard to Chevron deference.  See City of Arlington cited at footnote 24, infra.)  The Court nonetheless agreed with the Commission that the statutes pursuant to which regulated energy utilities sought authority to create the holding companies in the first instance, coupled with Section 701,[1] provided the Commission with limited authority over the resulting holding companies such that the Commission could (1) enforce the holding companies’ compliance with conditions in the orders authorizing their creation and (2) do so in its own forum.  The opinion does not, however, hold that affiliates of public utilities, without more, are subject to commission jurisdiction.  (As the Commission held in D.17-04-042, the decision also does not hold that the Commission has jurisdiction over a non-public utility that does business with a public utility.)  The Court also held that challenges to the fashion in which the Commission was construing one of those conditions were premature.  The Court expressly affirmed the Commission’s construction on an interim basis, however, because denial of the petitions on the issue would “foreclose further review of the interim decision.”  The discussion reminds practitioners of the burden borne by those seeking review of Commission decisions in the state appellate courts; if a petition is summarily denied because the court deems the issue raised unripe, the denial is treated as res judicata on all grounds which were raised in the Petition or could have been raised unless the court, as it did in this decision, disclaims finality.  There are also instances in which a party may seek review of a technically ripe issue (one with respect to which the Commission has denied rehearing) even though other issues arising out of the same Commission decision (with respect to which rehearing was granted) remain pending.  In 2009, the California Supreme Court denied the petition for writ of review in such a case but expressly did so without prejudice to the petitioner’s right to again seek review of the issue after the Commission decided the remaining issues before it.

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