USA – CALIFORNIA Law and Practice Contributed by: Nora Sheriff, Gwenneth O’Hara, Samir Hafez, Antonio Carrejo and Timothy Lee, Buchalter LLP
Appeals and Complaints IOUs and other parties to the proceeding in which a CPUC decision was adopted have a right to appeal the CPUC decision. Parties must first file an “appli- cation for rehearing” with the CPUC itself, outlining the alleged legal error. If the rehearing application is denied, or if it is granted but the decision remains unsatisfactory, the applicant may then file a petition for a writ of review with the California Court of Appeal or the California Supreme Court. This judicial review is typically limited to whether the CPUC violated appli- cable law or acted within its authority, and whether the CPUC’s findings are supported by substantial evidence. Customers and other parties can also challenge exist- ing rates, service quality, or alleged violations of rules or tariffs through the CPUC’s complaint process. The CPUC provides both an informal complaint process (via its Consumer Affairs Branch, which attempts mediation) and a formal complaint process. The CPUC can order remedies such as bill adjustments or cor- rective actions, but generally cannot award damages for personal injury or property damage.
The CPUC establishes distribution system charges under a cost-of-service model. Under this model, the following applies. • The CPUC determines the utility’s revenue require- ment, which is the total amount of money that the utility is authorised to collect from customers to cover its operational costs (eg, maintenance, administration) and provide an opportunity to earn a reasonable rate of return on its capital invest- ments (rate base – the value of infrastructure such as poles, wires, etc). • This revenue requirement is typically examined and set every few years in a formal proceeding called a General Rate Case (GRC). The GRC involves public hearings, input from stakeholders (including consumer advocates), and review of the utility’s expenses and investment plans. • Once the revenue requirement is approved (Phase I of a GRC for large IOUs), the costs are allocated among different customer classes (residential, commercial, industrial, agricultural), and specific rates are designed to collect the allocated revenue from each class (Phase II of a GRC). Rates often include fixed charges, volumetric charges (per kWh), and, for some customers, demand charges (per kW). Distribution terms of service are typically reviewed, established or modified within formal CPUC proceed- ings; this can occur concurrently with rate-setting in GRCs or separately in specific rule-makings dedicat- ed to particular aspects of service (such as net energy metering or interconnection).
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