Southern California Edison

101 Cal. App. 4th 982 (2002), 125 Cal. Rptr. 2d 211, 2002 Cal. App. LEXIS 4594

The Court of Appeal (Second District, Division 7) affirmed most of a Commission order that determined the level of short run avoided costs (“SRAC”) for electric utilities.  (SRAC returned to the court in 2005; see Para. 21.)  The Court reversed that portion of the order in which the Commission refused to consider adjusting SRAC retroactively, holding that PURPA required that the Commission at least consider whether such an adjustment was required by the evidence.  (The court did not, as some have suggested, find that there was no “substantial evidence” to support the outcome already rendered.)  The opinion addresses Section 1708.5(f) of the Public Utilities Code and holds that it applies not only to proceedings initiated by parties but to proceedings initiated by the Commission itself as well.  The court also held that, pursuant to Section 1708.5(f), the Commission was not required to hold a hearing to modify a prior rule unless the rule was adopted after a hearing.  In a footnote (fn. 17) the Court recognized that “at some point a failure to hold hearings could be a violation of due process.”  While the parties to non-adjudicatory matters are theoretically not entitled to “due process” in the constitutional sense (Henry Wood, Para. 69), prejudicial failure to follow procedures can lead to annulment of a Commission decision (see Huntington Beach, Para. 14 and Edison, Para. 19.)  This decision and the following one (Para. 32) are relevant to any analysis of Younger abstention (Younger v. Harris, 401 U.S. 37 (1971)) in federal court actions.  Both should dispel any suggestion that federal claims may not be adequately pursued in state court, a question raised in the past in connection with Younger.  See Communications Telesystems International v. Public Utilities Commission, 196 F.3d 1011 (9th Cir. 1999).  Parties, with some justification, had argued that the paucity of written decisions (under writ review prior to the enactment of SB 779) precluded a finding that state court review of federal questions existed to any meaningful degree.

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