BEFORE THE PUBLIC UTILITIES COMMISSION FILED 03/30/18 OF THE 04:59 PM STATE OF CALIFORNIA A1803018 Application of Trans Bay Cable LLC (U934-E) for an Exemption from the Reporting Application No. _________ Requirements of Certain General Orders APPLICATION OF TRANS BAY CABLE LLC FOR AN EXEMPTION FROM THE REPORTING REQUIREMENTS OF CERTAIN GENERAL ORDERS Lenneal Gardner Sean O’Reilly Corporate Counsel for Chief Operating Officer for Trans Bay Cable LLC Trans Bay Cable LLC One Letterman Dr., Bldg. C, 5th Fl. One Letterman Dr., Bldg. C, 5th Fl. San Francisco, CA 94129 San Francisco, CA 94129 Phone: (415) 291-2300 Phone: (415) 291-2300 Facsimile: (415) 651-9500 Facsimile: (415) 651-9500 Email: [email protected] Email: [email protected] March 30, 2018 1 / 21 BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA Application of Trans Bay Cable LLC (U934-E) for an Exemption from the Reporting Application No. _______________ Requirements of Certain General Orders. APPLICATION OF TRANS BAY CABLE LLC FOR AN EXEMPTION FROM THE REPORTING REQUIREMENTS OF CERTAIN GENERAL ORDERS In accordance with Article 2 of the California Public Utilities Commission’s (“Commission”) Rules of Practice and Procedure (“Rules”), Trans Bay Cable LLC (“TBC” or the “Applicant”) respectfully requests that the Commission issue TBC an exemption from the reporting requirements of General Orders (“GOs”) 65-A, 77-M and 104-A. TBC is a transmission-only utility (a) whose rates, and terms and conditions of service are subject to the exclusive jurisdiction of the Federal Energy Regulatory Commission (“FERC”), and (b) that has no retail California customers nor any Commission-established rates. TBC requests that the Commission issue an Order which exempts TBC from the requirements of GOs77-M and provides that TBC may satisfy the requirements of GO 65-A and 104-A by providing comparable FERC reports (Form 1 and Form 3Q). These requested exemptions will be referred to herein collectively as the “General Order Exemptions.” 1 2 / 21 The basic reason for the request is straightforward: given TBC’s FERC jurisdictional status (including and particularly FERC jurisdiction over TBC’s rates), its small size and that it has no retail customers, application of GOs 65-A, 77-M and 104-A does not serve the purpose of (i) helping the Commission to regulate utility rates, (ii) fulfilling Commission responsibilities in consumer protections or market monitoring, (iii) needlessly consumes the Commission’s time and resources, and (iv) increases TBC’s burden of complying with regulatory requirements. In a 2013 decision in connection with a financing for TBC, the Commission observed that: “TBC Cable LLC (TBC) is an energy transmission company under the jurisdiction of this Commission and the Federal Energy Regulatory Commission (FERC) that operates in the San Francisco Bay Area. TBC operates as a public utility in the Commission’s jurisdiction and is subject to Commission authority. TBC is also a FERC-regulated utility and its rates are subject to FERC’s exclusive jurisdiction.”1 Thus this Commission has recognized that although TBC has been held to be a public utility subject to the Commission’s jurisdiction, its rates, and terms and conditions of service are subject to the exclusive jurisdiction of FERC and that such exclusive FERC jurisdiction is the basis for exempting TBC from Commission rules and requirements that would be duplicative or relate to matters solely within the FERC’s jurisdiction.2 The Commission went on to note that the reasonableness of the terms of financing “is normally subject to review in the appropriate proceeding at FERC. Therefore, we will not make a finding in this decision of the reasonableness of the projected capital ratios for ratemaking purposes or the appropriate cost of capital. We do not make a finding in this decision on the reasonableness of TBC proposed construction program, which is reviewed in the appropriate FERC proceeding.”3 The Commission has also previously accepted TBC’s FERC jurisdictional status as sufficient grounds to issue an exemption 1 Decision 14-01-008. 2 Id., page 1. 3 Decision 14-01-008, page 5 and 6. 2 3 / 21 from the requirements of Public Utilities Code §§ 816 through 830 and a partial exemption from Public Utilities Code §851 (“2. Trans Bay Cable’s rates are set by FERC, not by this Commission. 3. Trans Bay Cable’s transactions must be approved by FERC.”)4 Relatedly, the Commission has previously granted exemptions to other applicants “based on the fact that either the Commission was preempted from setting rates or chose to no longer regulate the rates of the utility being exempted”.5 Given the Commission’s observations in Decisions 14-01-008 and 16-09-003 , relevant case law, and the facts applicable to TBC, TBC’s compliance with the reporting requirements of GO 65A, 77M, and 104-A does not advance the Commission’s purpose of procuring information useful in setting utility rates. Indeed, compliance with the requirements is an inefficient use of Commission resources since TBC’s rates are regulated by FERC and FERC proceedings are the appropriate arena to assess the justness and reasonableness of TBC’s rates. I. BACKGROUND TBC is the owner and operator of a fifty-three mile, approximately 400 megawatt High Voltage Direct Current transmission line and associated facilities (the “Project”), which provides direct electric transmission between the Pacific Gas and Electric Company’s (“PG&E”) Pittsburg Substation located at a site adjacent to the City of Pittsburg, California, in Contra Costa County, and PG&E’s Potrero Substation within the City and County of San Francisco. The Project’s commissioning enabled the retirement of the only “in city” generation at Potrero and thus eliminated the environmental impact of that generation, and also increased overall system reliability by relieving grid congestion. Although TBC is subject to this Commission jurisdiction’s, TBC has, since its inception, been a FERC-regulated transmission-only company, and FERC has exclusive jurisdiction over 4 Decision 16-09-003, page 8 and 9. 5 Decision 12-11-017, page 20. 3 4 / 21 TBC’s rates and terms and conditions of service.6 In addition, the Project is under the operational control of the California Independent System Operator Corporation (“CAISO”), which recovers its transmission service rates through its own FERC-approved tariff. TBC has no retail California customers, and TBC recovers its entire revenue requirement pursuant to its FERC-jurisdictional Transmission Owner Tariff (“TO Tariff”). These FERC-established rates are paid through the Transmission Access Charge that the CAISO charges to scheduling coordinators that utilize the transmission system which is under FERC’s jurisdiction. TBC’s TO Tariff and transmission revenue requirement have been reviewed and approved by FERC in three rate cases7 in which all interested parties, including the Commission8, had an opportunity to participate. Trans Bay Cable LLC, 161 FERC ¶ 61,134 (2017); Trans Bay Cable LLC, 149 FERC ¶ 61,081 (2014); Trans Bay Cable LLC, 137 FERC ¶ 61,258 (2011). Future changes in TBC’s rates and terms and conditions are, likewise, subject to FERC’s exclusive jurisdiction, pursuant to Federal Power Act (“FPA”)9 Section 20510 (changes proposed by TBC) and FPA Section 20611 (changes proposed by FERC, the Commission or others). These FERC rate cases include an opportunity for FERC to review TBC’s cost of service and for all parties to challenge the reasonableness and prudence of all aspects of TBC’s revenue requirement. Rate cases before the FERC are the appropriate forum for review and assessment of elements of TBC’s rate as the Commission has previously recognized12. 6Trans Bay Cable LLC, 112 FERC ¶ 61,095 (2005) and Trans Bay Cable LLC, 129 FERC ¶ 61,225 (2009) 7 FERC Docket Nos. ER10-116, ER13-2412 and ER16-2632. 8 Trans Bay notes that the Commission, through its legal department, has been an active participant in each of Trans Bay’s FERC rate cases. 9 16 USC §§ 791a et seq. 10 16 USC § 824d. 11 16 USC § 824e. 12 Decision 14-01-008, page 5 and 6. 4 5 / 21 In April 2011, Representatives from TBC met with Commission staff members to describe the Trans Bay Cable Project, its relationship with the CAISO, and its Commission and FERC jurisdiction. TBC explained that since all of its facilities were under the operational control of the CAISO and that TBC is subject to FERC regulatory authority, it was unclear which Commission reporting and compliance requirements applied to TBC. TBC made it clear that it had every intention to comply with all appropriately applicable Commission reporting and compliance requirements. With respect to GOs 65-A and 104-A, TBC highlighted that it was required to file similar annual and quarterly reporting with the FERC and offered to provide those filings to the Commission staff. Since the April 2011 meeting, TBC, proceeding on staff’s guidance, has regularly filed its FERC Form No. 1 and Form No. 3Q with the Commission without fail, but has not filed Form 77-M or its predecessor form. Questions have recently been raised regarding information filing requirements that TBC had believed were addressed by staff’s prior guidance and TBC now seeks to formalize the advice previously provided permitting exemption from such information filing requirements. Given this history, TBC requests that the Commission formally exempt TBC from complying with the reporting requirements of GO 77- M, GOs 65-A and 104-A provided that TBC continue