ALJ/MOD POD-UNC/lil/jt2 DRAFT Agenda ID # (Rev. 1)Adjudicatory

2/21/2019 Item #23Decision PRESIDING OFFICER’S DECISION OF ALJ SEMCER

(Mailed 9/7/2018)

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

County of Orange;

Complainant,

vs.

Southern California Edison Company (U338E),

Defendant.

Case 17-10-013

(See Appendix A for Appearances)

PRESIDING OFFICER’S DECISION DISMISSING COMPLAINT

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Table of Contents

Title Page

PRESIDING OFFICER’S DECISION DISMISSING COMPLAINT..........1Summary...............................................................................................21. Parties.............................................................................................22. Procedural History..........................................................................23. Factual Background........................................................................44. The Dispute.....................................................................................5

4.1. Complainant’s Position............................................................64.2. Defendant’s Position................................................................7

5. Discussion.......................................................................................86. Conclusion....................................................................................127. Outstanding Motions....................................................................128. Categorization and Need for Hearing...........................................139. Assignment of Proceeding............................................................1310. Appeal of Presiding Officer’s Decision..........................................13Findings of Fact..................................................................................18Conclusions of Law.............................................................................20ORDER ...............................................................................................21

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PRESIDING OFFICER’S DECISION DISMISSING COMPLAINT

SummaryThis decision denies and dismisses the complaint filed by County

of Orange against Southern California Edison Company (U338-E).Case 17-10-013 is closed.

1. PartiesCounty of Orange (County or Complainant) owns and operates a

Central Utility Facility (CUF) at 525 North Flower Street in the City of Santa Ana. The CUF provides various combinations of steam, chilled water and electricity to nearby government buildings. The CUF is operated in parallel with the Southern California Edison Company (SCE or Defendant) distribution system.

Defendant is a provider of electricity service and is an investor-owned public utility under the jurisdiction of the California Public Utilities Commission. Complainant contracts with Defendant to provide standby electric services1 to the CUF on rate schedule TOU-8-S2 through payment of a Capacity Reservation Charge (CRC).

2. Procedural HistoryOn October 13, 2017, Complainant filed a formal complaint

alleging that SCE had overcharged Complainant for the provision of standby electric service from the time that SCE commenced service to the CUF in 2009 through October 13, 2016. On May 16, 2017, Complainant notified Defendant that the standby level demand level was too high and requested a refund. On October 17, 2017, Defendant informed Complainant that it would not issue a refund.1 Standby services ensure that the building served by the CUF are not impacted when the CUF experiences planned or unplanned outages (Complaint at 1).2 Tariff Sheet No. 52253-E, effective as of April 1, 2013.

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In the instant case, Complainant alleges that Defendant was obligated under Special Condition 6 of TOU-8-S to inform Complainant of the difference between actual and contracted standby demand and lower the standby demand to a more appropriate level. Compliant seeks a refund of the difference between the amount charged under the CRC and a lower standby demand amount for the period May 2014 through October 2016.3

The Commission issued an Instruction to Answer to Defendant on November 1, 2017. Defendant filed an Answer to Complaint on December 1, 2017. Administrative Law Judge (ALJ) Semcer convened a prehearing conference on January 10, 2018, and the Assigned Commissioner issued a Scoping Memo and Ruling of Assigned Commissioner (Scoping Memo) on January 25, 2018.

On April 11, 2018, Complainant and Defendant, citing to a lack of disputed issues of fact, filed and served Joint Motion Requesting Cancellation of Evidentiary Hearings and Proceeding to Briefing on the Record of Submitted Testimony. ALJ Semcer granted the motion on the same date, April 11, 2018. On May 15, 2018, Complainant and Defendant filed and served Joint Motion for Submission of Evidence into the Record. This motion is addressed in the instant decision.

Pursuant to the schedule adopted in the Scoping Memo, Complainant and Defendant filed concurrent opening briefs and reply briefs on May 15, 2018 and June 15, 2018, respectively.

3 Under Rule 17.D of SCE’s tariffs, the County can recover funds for three years prior to the date of its notification to SCE (May of 2017). Beginning on October 1,2016, the relevant tariff changed as a result of Commission Decision (D.) 16-10-030. Under the new tariff methodology, a customer’s actual standby demand levels are set using an algorithm that periodically and automatically adjusts based on actual recorded usage amounts (demand).

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3. Factual BackgroundThere are no disputed issues of fact in this case. The primary

facts are as follows. Complainant owns and operates the CUF with nameplate capacity of 10,600 kilowatts (kW). The contract executed by the Complainant and Defendant in 2009 set the standby demand level at 8,192 kW. The standby demand level of 8,192 kW was in effect for the period 2009-October 13, 2016. Actual demand for the CUF was lower. Complainant calculated that, for the period May 2013 through October 2016, the CUF’s actual monthly maximum demand averaged 3,813 kW and never exceeded 6,560 kW. The size and type of generation units, and the way they are operated, remained unchanged since commencement of service.

Defendant did not adjust the standby demand level for the CUF during the period 2009-October 13, 2016, and Complainant did not request a change to that standby demand level. On May 16, 2017, Complainant notified Defendant that standby demand had exceeded the County’s reserve capacity needs and requested a refund for what it deemed “excessive charges.” Complainant and Defendant engaged in multiple communications until, on October 11, 2017, Defendant informed Complainant that it would not issue a refund for the period May 16, 2014-October 13, 2016.4 Effective October 13, 2016, SCE adjusted standby demand for the CUF to 6,270 kW, pursuant to the mathematical formula adopted in D.16-10-030.

4 See previous footnote for an explanation of why Complainant seeks a refund for the time period May 16, 2014-October 13, 2016.

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4. The DisputeThe issue at present in this case is a dispute over the

interpretation of Special Condition 6 of rate schedule TOU-8-S. Special Condition 6 states:

Standby Demand. Standby Demand in kW represents the entire reserved capacity needed for SCE to serve the customer’s load regularly served by the customer’s generating facility when such facility experiences a partial or complete outage. The level of Standby Demand, which shall not exceed the nameplate capacity of the customer’s generating facility, is initially designated by the customer and is set forth interconnection agreement or the Contract for Electric Service. Once a customer’s designated Standby Demand has been set, it shall remain at such level for a minimum of 12 months, unless, in SCE’s determination, the Standby Demand needs to be adjusted to more accurately represent the customer’s actual reserve capacity needs. Upon SCE’s determination that the customer designated Standby Demand is too low and does not reflect the actual level of needed reserve capacity, over any 15-minute period or through on-site verification, SCE shall increase the Standby Demand to reflect the actual needed reserve capacity. Similarly, upon SCE’s determination that the customer’s designated Standby Demand is too high, over any 15-minute period or through on-site verification, SCE shall decrease the Standby Demand to reflect the actual needed reserve capacity. When the Standby Demand is adjusted by SCE as provided above, a qualified change in the Standby Demand shall not be made for 12 months from the last adjustment. The difference between the Maximum Demand and the Standby Demand is billed the Facilities Related Demand Charge, described above in RATES. The customer is

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responsible for notifying SCE of permanent or material changes in their generation facilities (size, type and operations) for future adjustments to Standby Demand.

4.1. Complainant’s PositionComplainant argues that, given actual usage, the standby

demand level of 8,192 kW was too high and should have been adjusted. Complainant asserts that the provisions of Special Condition 6 required SCE to make a determination that the CUF standby demand level was too high; therefore, Complainant is owed a refund for the period permitted under the tariff (May 16, 2014-October 13, 2016). Complainant states “SCE may contend that it has no obligation to adjust Standby Demand because, under the language of Special Condition 6, it was up to SCE, and SCE alone, to make the ‘determination’ that Standby Demand was ‘too high.’ But such an interpretation, in which SCE could decide to adjust the Standby Demand (or decide not to adjust the Standby Demand), even in stances where the Standby Demand clearly was excessive, would make the detailed language of Special Condition 6 superfluous.”5

Complainant argues that the dispute arises over the provisions of Special Condition 6 that pertain to how standby demand should be adjusted after initial designation when there have not been changes to the customer’s generating facilities. Complainant argues that standby demand is not meant to be established once when a customer initiates service and then never adjusted again. Rather, Complainant asserts that Special Condition 6 requires that standby demand be adjusted when actual needed reserve capacity and that the responsibility to determine when standby demand does not reflect the actual level of 5 Complaint at 2.

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needed capacity rests with Defendant, not Complainant. Furthermore, Complainant states that Defendant failed to define under what circumstances SCE would consider the standby demand to be inappropriate such that a revision was necessary. Complainant suggests that Defendant had no practice or policy in place to implement Special Condition 6. Finally, Complainant contends that SCE did have a mathematical formula after October 2016 to determine whether standby demand was “too high” or “too low,” which resulted in a reduction of the CUF standby demand from 8,192 kW to 6,270 kW.

4.2. Defendant’s PositionDefendant asserts that Special Condition 6 gives it the right, but

not the obligation to change the standby demand level if SCE, it its sole discretion, determines that a change is needed. Defendant argues that when a tariff provision imposes a mandatory obligation, as opposed to a discretionary right, the language of the tariff makes that clear. As an example, Defendant refers to Special Condition 7, which states, in relevant part, “On an ongoing basis, SCE will determine a revised [Supplemental Contract Capacity] based on the difference between the customer’s Maximum Demand during the previous 12 months and the established Standby Demand.” Defendant asserts that it was the responsibility of Complainant to notify Defendant of permanent or material changes in the customer’s generation facility. Finally, Defendant argues that the rules of statutory construction, which apply to tariffs, render Complainant’s argument moot at the first step. Defendant asserts that assigning the words of the tariff their ordinary meaning supports Defendant’s assertion that Special Condition 6 bestows a right, but not an obligation, on Defendant to

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adjust the standby demand level. Defendant further argues that the history of the development of Special Condition 6 and a harmonization across the tariff supports this conclusion.

5. DiscussionThe principal issue of this case is whether Complainant is

entitled to a refund for the period May 16, 2014 - October 13, 2016 as a result of the discrepancy between the contracted standby demand level of 8,192 kW and actual demand. There are no disputed material issues of fact. The dispute pertains to the interpretation of Special Condition 6 of TOU-8-S, specifically, did Defendant have the burden under Special Condition 6 to modify Complainant’s standby demand charge to align with actual needed reserve capacity.

Commission approved tariffs have the force and effect of law.6 As such, tariffs are interpreted using traditional statutory construction principles.7 Generally, any ambiguity in the tariff language is construed against the drafter (utility) and in favor of a customer. However, requiring interpretation of an ambiguity against the utility is not absolute.8

6 Dyke Water Company v. Public Utilities Commission of the State of California (1961) 56 Cal.2d 105, 123. 7 To interpret a tariff, the Commission must look first at its language, giving the words their ordinary meaning and avoiding interpretations which make any language surplus The Commission must interpret the words of the tariff in context and in a reasonable, common-sense way. If the language of the tariff is clear, the Commission need not look further to interpret the tariff. If ambiguity exists, the Commission may rely on sources beyond the plain language of the tariff, such as the regulatory history and the principles of statutory construction, to interpret the tariff. An ambiguity exists if language in a tariff may reasonably be interpreted in more than one way. The Commission has the discretion to determine whether an interpretation of a tariff sought by a party is reasonable (Zacky & Sons Poultry Co. v. Southern California Edison Company [D.03-04-058]) (2003) at p. 6, fn. 4.8 D.16-01-045 (2016) 2016 Cal. PUC Lexis 40.

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A plain reading of the language of Special Condition 6 yields that the standby demand level is designated by the customer (Complainant) at the time of execution of the Contract for Electric Service. The standby demand level, pursuant to Special Condition 6, represents (in kW) the entire reserved capacity needed for Defendant to serve the customer’s load regularly served by the customer’s generating facility when such facility experienced a partial or complete outage. The customer bears the burden for notifying Defendant of permanent or material changes in their generation facilities. However, in this case, it is undisputed that there were no material changes to the generation facilities in question (the CUF). Therefore, Defendant’s argument that Complainant should have notified Defendant of operational changes in order to change the standby demand level is unsupported.

Regarding changes to the standby demand level after initial election by the customer, the Commission must determine whether any ambiguity of language exists in the tariff. Interpretation of a tariff (applying the rules of statutory construction) requires the Commission to look first at the language giving the words their ordinary meaning. Here, an ordinary interpretation of the language of Special Condition 6 yields that Defendant was under no obligation to alter Complainant’s standby demand level, despite standby demand being higher than actual demand during the period in question. Special Condition 6 states: “Once a customer’s designated Standby Demand has been set, it shall remain at such level for a minimum of 12 months, unless, in SCE’s determination, the Standby Demand needs to be adjusted to more accurately represent the customer’s actual reserve capacity needs” (emphasis added). There is no language in

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Special Condition 6 that, from a plain reading, confers an obligation on Defendant to review the standby demand level for any particular customer (or all customers) and subsequently make adjustments. Rather, the tariff states that if Defendant does make such a determination then Defendant shall increase or decrease the standby demand level to reflect the actual needed reserve capacity. The ability for Defendant to make such a change is not the same as an obligation.

The words of a tariff must be construed in context, and different provisions relating to the same subject matter must be harmonized, to the extent possible.9 Special Condition 6 sets forth the actions Defendant must take if it determines that the standby demand level is too low or high, but it does not set forth the obligation for Defendant to conduct universal reviews of standby demand. As noted by Defendant, one must only look to Special Condition 7, which relates also to standby demand, to find language that confers an ongoing and affirmative obligation on Defendant.10

Harmonization across the tariff would require Special Condition 6 to contain such declaratory language as Special Condition 7 (e.g. will, shall) regarding an obligation to review standby demand charges. No such language exists;11 therefore, Special Condition 6 does not require affirmative action by Defendant. As found in Penn. Central 9 La Collina, Dal, Lago LP v. Pacific Bell Telephone Co. (D.12-04-051 (2012) at 7).10 “On an ongoing basis, SCE will determine a revised….” (TOU-8-S, Special Condition 7, emphasis added).11 While Special Condition 6 does contain declaratory language if Defendant determines that the standby demand level is too high or too low (SCE shall increase/decrease standby demand to reflect actual needed reserve capacity), Special Condition 6 lacks declaratory language that requires Defendant to undertake an evaluation of standby demand levels for all customers on an ongoing basis.

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Co. v. General Mill., Inc., 439 F.2d 1338, 1341, an ambiguity, should it exist, must be a reasonable one and should not be the result of a straining of the language. Absent clear declaratory language, as exists in Special Condition 7, it is a strain of the language of Special Condition 6 to find that Defendant had an obligation to notify and adjust Complainant’s standby demand level. That Complainant alleges that Defendant did not have a clear policy or procedure in place to review standby demand levels is not relevant; nothing in Special Condition 6 requires such a policy to be in place.

Complainant points to the fact that, following adoption of D.16-10-030, Complainant’s standby demand level was reduced, using an algorithm that periodically and automatically adjusts based on actual recorded usage amounts (demand), to support the finding that Defendant should have adjusted the standby demand level for the period May 16, 2014 - October 13, 2016. While the adoption of D.16-10-030 resulted in updates to the tariff that, in the case of Complainant, worked to its benefit, in the instant case, the Commission is required to look at the tariffs in effect at the time period for which Complainant seeks remedy. As discussed above, Special Condition 6 as in effect during the time period May 16, 2014 - October 13, 2016 did not confer an obligation on Defendant to adjust Complainant’s standby demand level.

Finally, the relationship between standby demand and realized demand is not necessarily correlated. Standby demand level is set by the customer and represents the amount of capacity Defendant must be ready to serve in the case of a partial or complete outage of Complainant’s facility. Realized demand over any particular time period will depend on outages and other factors. Realized demand

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over the course of the period May 16, 2014-October 13, 2016 cannot be used as evidence to find that standby demand (actual needed reserve capacity) is too high.

Defendant did not violate any statute, Commission order or tariff in maintaining a standby demand level of 8,192 kW for Complainant during the time period May 16, 2014 - October 13, 2016.

6. ConclusionIt is clear that actual needed reserve capacity for the CUF for

the period 2009 - October 13, 2016 was significantly below the 8,192 kW initially elected by the Complainant in the Contract for Electric Service. However, in order to meet the burden of proof and prevail in the instant proceeding, the Complainant must prove a violation of a specific standard contained in a rule, statute or order of the Commission, or a tariff which has been approved by the Commission. Complainant has not done so. The instant complaint should be dismissed.

7. Outstanding MotionsOn May 15, 2018, Complainant and Defendant jointly filed a

Motion for Submission of Evidence into the Record. The motion is granted. The following exhibits are identified and received into the record on August 14, 2018:

Exhibit COO (County of Orange)-1: Prepared Testimony of Barbara Tidball on Behalf of County of OrangeExhibit COO-2: Prepared Testimony of Michael Kerkorian on Behalf of County of OrangeExhibit COO-3: Rebuttal Testimony of Michael Kerkorian on Behalf of County of OrangeExhibit SCE-2: Reply Testimony of Southern California Edison

Company

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8. Categorization and Need for HearingThe Scoping Memo and Ruling of the Assigned Commissioner

(Scoping Memo), issued on January 25, 2018, confirmed the categorization of Case 17-10-013 as adjudicatory. The evidentiary determination in the Scoping Memo is changed to find that hearings are not necessary. The instant case presented no disputed issues of fact.

9. Assignment of ProceedingClifford Rechtschaffen is the assigned Commissioner and Melissa

K. Semcer is the assigned ALJ and Presiding Officer in this proceeding.

10. Appeal of Presiding Officer’s DecisionOn October 8, 20192018, County of Orange (Complainant) filed

an appeal of the Presiding Officer’s Decision (POD) alleging numerous errors in the decision. On October 23, 2018, SCE (Defendant) filed its response to Complainant’s appeal. Complainant alleges that the Presiding Officer wrongly concluded that SCE did not have an affirmative obligation to adjust Complainant’s standby demand level for the period May 16, 2014-October 13,2016 under the provisions of Special Condition 6. Complainant’s arguments fall into three main categories: 1) Complainant’s actual demand level over the period in question never exceeded 6,560 kW (below the contracted standby demand level of 8,192 kW); thus, the contracted standby level was too high; 2) Defendant had an obligation under Special Condition 6 to initiate review of actual demand levels and adjust accordingly; and 3) the POD errs in concluding that an ordinary interpretation of the

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language of Special Condition 6 confers no obligation on Defendant to adjust standby demand levels.

In support of its first argument, in addition to providing actual demand data, Complainant points to Defendant’s Answer to Complaint where Defendant acknowledges that, after Complainant elected a standby level of 8,192 kW, the CUF used “materially less capacity.”12 Complainant further asserts that Defendant lacked any policy to review and adjust standby demand levels under Special Condition 6 prior to October 2016, instead adjusting standby demand on a case by case basis. Furthermore, upon adoption of a formula to determine if standby demand was “too high” or “too low,” Defendant adjusted Complainant’s standby demand to 6,270 kW. Complainant argues that the POD erred by failing to find affirmatively that the contracted standby demand level was too high.

In support of its second argument, Complainant argues that Defendant failed in its responsibility to appropriately adjust Complainant’s standby demand under Special Condition 6. Complainant alleges that the POD errs by allowing Defendant the ability to decide both “how to make this determination13, but [also] whether to make this determination.” Complainant argues that Defendant had an affirmative obligation under Special Condition 6 to initiate evaluation of actual demand and adjust standby demand levels accordingly. Otherwise, Complainant argues, the provisions in the tariff would be superfluous and would violate the Commission’s tariff

12 Answer to Complaint at 6. 13 Appeal at 9, referring to Defendant’s ability under Special Condition 6 to determine if standby demand is too high or too low, and to adjust accordingly, emphasis in original.

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interpretation rule, which requires “avoiding interpretations that make any language surplus.”14

Finally, in support of its third argument, Complainant argues that the POD incorrectly concludes that Special Condition 6 does not impose a mandatory obligation on Defendant (and relies on Special Condition 7 in error to make this determination), and the POD incorrectly concludes that Defendant’s lack of an articulated policy relating to Special Condition 6 is not relevant. Complainant argues that, due to a lack of adopted policy, one can interpret that Defendant “has never intended to ‘determine’ anything under Special Condition 6.”15 Furthermore, Complainant asserts that, although Special Condition 6 does not state that Defendant is obligated to review a customer’s standby demand level, it also does not state that Defendant is not obligated to review standby demand. Therefore, Complainant argues, the tariff is ambiguous, and any decision by Defendant is necessarily arbitrary and capricious.

Defendant, in its Response to Complainant’s Appeal of Presiding Officer’s Decision, argues that the POD is correct in its interpretation of Special Condition 6. Defendant asserts that, applying the first rule of statutory construction, giving the words of the tariff their plain meaning does not confer an obligation on Defendant to monitor on an ongoing basis actual demand and adjust standby demand levels to reflect actual demand. Defendant points to the language in Special Condition 7 as an example of language that does confer such a responsibility and asserts that the POD is correct in harmonizing the

14 D.15-08-007 at Section 3.1 (as cited in Appeal at 9). 15 Appeal at 17.

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language of Special Condition 7 to facilitate its interpretation of Special Condition 6.

Defendant further argues that the standby demand level is chosen by the customer, and that standby demand, as defined in Special Condition 6, is not generally linked to the amount of electricity supplied by the utility (i.e. actual demand). This is because standby demand is the amount of capacity that the utility must be ready to serve if the customer’s own generation facilities are unavailable. Finally, Defendant points to the history of the development of Special Condition 6 to support its interpretation of the tariff, noting that in its initial iteration, standby levels were set by Defendant; however, over time, the burden to set standby level and to notify Defendant of changes to operations moved to the customer. Defendant argues that the tariff history shows that Defendant was given the right, but not the obligation to adjust standby levels, and that the tariff does not require ongoing monitoring and adjustment of standby levels by Defendant.

After reviewing the appeal and response to the appeal, the presiding officer has determined that Complainant has failed to demonstrate any material procedural or legal error in the POD. However, the presiding officer has elected to add additional clarifying language to the POD mailed on September 7, 2018 pertaining to the relationship between standby demand and actual demand, along with a new Finding of Fact # 11. In addition, the presiding officer has adjusted the language of Finding of Fact # 6 for clarity. Minor typographical errors are corrected throughout.

There is no compelling legal argument that the language of Special Condition 6 places an affirmative obligation on Defendant to

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conduct ongoing monitoring of standby demand levels and to adjust standby demand levels according to realized demand. As noted by Defendant, standby demand, according to Special Condition 6, is the amount of capacity that the utility must be ready to serve if the customer’s own generation facilities are unavailable. Complainant would presumably have the best knowledge of its own generation needs, and the obligation to set an initial standby demand level, pursuant to Special Condition 6, rests with the customer. Standby demand is held without change for 12 months, unless, in Defendant’s determination, the standby demand level needs to be adjusted to more accurately reflect the customer’s actual reserve capacity needs. Realized demand may not correlate directly with required standby demand (the actual level of needed reserve capacity).

As the POD states, there is no evidence to support a permanent or material change in Complainant’s generation facilities, thus requiring Complainant to notify Defendant of such change, and the POD finds that actual (realized) demand during the time period in question was lower than the contracted standby demand level. However, nothing about the plain language of Special Condition 6 supports a finding that the standby demand level elected by Complainant was too high nor that the language of Special Condition 6 required Defendant to adjust Complainant’s standby demand level.

The language of Special Condition 6 is clear: standby demand level shall be adjusted (an affirmative obligation) if, in Defendant’s determination, such a change is warranted. Special Condition 6 places the obligation on Defendant to adjust standby demand level only if Defendant determines such changes are warranted, with the

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exception of notification by the customer of any material physical or operational changes.

Here, Defendant did not find the standby demand level elected by Complainant to be too high or too low, and did not make, nor was Defendant required to make pursuant to Special Condition 6, such an adjustment. The POD is correct in relying upon the affirmative ongoing monitoring and adjustment obligation contained in Special Condition 7 to find that Special Condition 6 contains no such affirmative obligation. Although Complainant alleges that Defendant, under such a reading of Special Condition 6, would never adjust standby demand levels, the evidence shows that Defendant has indeed adjusted standby demand levels for other customers. Therefore, Complainant’s appeal is denied, and the POD is upheld with only the minor clarifications discussed above.

Findings of Fact1. Complainant own and operates a CUF at 535 North Flower

Street in the City of Santa Ana. The CUF provides various combinations of steam, chilled water and electricity to nearby government buildings.

2. The CUF is operated in parallel with the SCE distribution system.

3. Defendant is a provider of electricity and natural gas service and is an investor-owned public utility under the jurisdiction of the Commission.

4. Complainant contracts with Defendant to provide standby electric services to the CUF on rate schedule TOU-8-S through payment of a Capacity Reservation Charge.

5. The nameplate capacity of the CUF is 10,600 kW.

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6. Complainant elected a standby demand level for the CUF of 8,192 kW at the time of contract execution in 2008.

7. A standby level of 8,192 kW was in effect for the period 2009 – October 13, 2016.

8. For the period May 2013 through October 2016, the CUF’s actual monthly maximum demand averaged 3,813 kW and did not exceed 6,560 kW.

9. The size and type of the generation units at the CUF, and the way they were operated, have remained unchanged since commencement of standby service.

10. Defendant did not adjust the standby demand level for the CUF during the period 2009-October 13, 2016, and Complainant did not request a change to the standby demand level during the same time period.

11. Actual demand over a given time period may not correlate directly with contracted standby demand.

12. On May 16, 2018, Complainant notified Defendant that standby demand had exceeded Complainant’s reserve capacity needs and requested a refund for the period permitted under the tariff, May 16, 2014 - October 13, 2016.

13. Complainant and Defendant engaged in multiple conversations until, on October 11, 2017, Defendant informed Complainant that it would not issue a refund for the period May 16, 2014 - October 13, 2016.

14. Effective October 13, 2016, Defendant adjusted the standby demand level for the CUF to 6,270 kW, pursuant to the mathematical formula adopted in D.16-10-030.

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15. Under the tariff methodology adopted in D.16-10-030, a customer’s actual standby demand levels are set using an algorithm that periodically and automatically adjusts based on actual recorded usage amounts.

16. Special Condition 7 contains language that imposes an obligation on Defendant by inclusion of the word “will.”

17. Special Condition 6 contains no language conferring an obligation on Defendant to adjust standby demand levels.

18. There is no disputed or triable issue of material fact within the Commission’s jurisdiction in this proceeding.

19. Complainant and Defendant provided the following exhibits in this case:

Exhibit COO (County of Orange)-1: Prepared Testimony of Barbara Tidball on Behalf of County of OrangeExhibit COO-2: Prepared Testimony of Michael Kerkorian on Behalf of County of OrangeExhibit COO-3: Rebuttal Testimony of Michael Kerkorian on Behalf of County of Orange

20. Exhibit SCE-2: Reply Testimony of Southern California Edison Company

Conclusions of Law1. The applicable tariffs at the time of standby delivery for the

period May 14, 2015 - October 13, 2016 is TOU-8-S, Tariff Sheet No. 52253-E, effective as of April 1, 2013. Applicable to the setting and adjustment of the contracted standby demand rate is Special Condition 6 of TOU-8-S.

2. Complainant must prove a violation of a specific standard contained in a statute, rule or order of the Commission, or a tariff which has been approved by the Commission.

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3. Under Rule 17.D of SCE’s tariffs, Complainant can only recover funds for three years prior to the notification of Defendant, or May 16, 2014.

4. Commission approved tariffs have the force and effect of law.5. Tariffs are interpreted using traditional statutory construction

principles.6. Assigning the ordinary meaning to the words of Special

Condition 6 of TOU-8-S yields that Defendant had the right, but not the obligation, to adjust Complainant’s standby demand level.

7. Harmonization across tariff provisions Special Condition 6 and Special Condition 7 of TOU-8-S yields that Special Condition 6 does not impose an obligation on Defendant to alter Complainant’s standby demand level.

8. Absent clear declaratory language, as exists in Special Condition 6, it is a strain of the language of Special Condition 6 to find that Defendant had an obligation to notify and adjust Complainant’s standby demand level.

9. Complainant has not demonstrated by a preponderance of the evidence that Defendant has violated TOU-8-S, Special Condition 6.

10. Evidentiary hearings are not necessary.11. The following exhibits should be identified and received into the

record as of August 14, 2018:Exhibit COO (County of Orange)-1: Prepared Testimony of Barbara Tidball on Behalf of County of OrangeExhibit COO-2: Prepared Testimony of Michael Kerkorian on Behalf of County of OrangeExhibit COO-3: Rebuttal Testimony of Michael Kerkorian on Behalf of County of Orange

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C.17-10-013 ALJ/MOD POD-UNC/jt2 DRAFT (Rev. 1)

Exhibit SCE-2: Reply Testimony of Southern California Edison Company

12. The Complaint against the Defendant should be denied and dismissed, effective immediately.

O R D E R

IT IS ORDERED that:1. The Complaint of County of Orange against Southern California

Edison Company is dismissed. The Complainant’s request for relief is denied.

2. The hearing determination is changed to “no hearings are necessary.”

3. The following exhibits are identified and received into the record as of August 14, 2018:

Exhibit COO (County of Orange)-1: Prepared Testimony of Barbara Tidball on Behalf of County of OrangeExhibit COO-2: Prepared Testimony of Michael Kerkorian on Behalf of County of OrangeExhibit COO-3: Rebuttal Testimony of Michael Kerkorian on Behalf of County of OrangeExhibit SCE-2: Reply Testimony of Southern California Edison Company

4. Case 17-10-013 is closed.Dated , at San Francisco, California

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Appendix A

C.17-10-013 ALJ/MOD POD-UNC/jt2 DRAFT (Rev. 1)

APPENDIX A

Russell A. Archer Sr. Attorney SOUTHERN CALIFORNIA EDISON COMPANY 2244 WALNUT GROVE AVE. / PO BOX 800 ROSEMEAD CA 91770 (626) 302-2865 Russell.Archer@SCE.com For: Southern California Edison Company

Michael Kerkorian UTILITY COST MANAGEMENT LLC 1100 W. SHAW AVENUE, SUITE 126 FRESNO CA 93711 (559) 261-9230 mk@utilitycostmanagement.com For: County of Orange

(End of Appendix A)Attachment 1: C1710013 Semcer MOD POD Rev. 1 8-24-18 (Redline Version).pdf