Toward Utility Rate Normalization

44 Cal. 3d 870 (1988), 750 P.2d 787

The Court affirmed a Commission decision which authorized interim rate increases for PG&E pursuant to its major additions adjustment clause (“MAAC”). The Commission authorized the rate increase prior to reaching a final determination on the prudency of PG&E’s investment in the plant. TURN asserted that the Commission could award interim rate relief only where (1) such relief was required to forestall a financial emergency or (2) the cost basis for the relief was beyond dispute. The Court, without really fixing the parameters of the Commission’s authority to provide interim relief, found that the Commission had the discretion to order it here as a means of insuring that present and future ratepayers fairly shared in recovering PG&E’s costs. Future disputes related to interim relief may turn on what is “required by law” (see Paras. 7 and 16 supra) before any order is issued. Does any provision of Section 454, restrict the broad authority vested in the Commission by Section 701?

Download PDF