120 FERC ¶ 61,173

UNITED STATES OF AMERICA

FEDERAL ENERGY REGULATORY COMMISSION

Before Commissioners: Joseph T. Kelliher, Chairman;

Suedeen G. Kelly, Marc Spitzer

Philip D. Moeller, and Jon Wellinghoff.

+--------------------------------------------+----------+-------------+
| Pacific Gas and Electric Company           | Docket   | ER          |
|                                            | Nos.     | 02-1330-008 |
|                                            |          |             |
|                                            |          | E           |
|                                            |          | R03-358-003 |
+--------------------------------------------+----------+-------------+

ORDER APPROVING UNCONTESTED SETTLEMENT

(Issued August 20, 2007)

1.  On July 5, 2007, Pacific Gas and Electric Company (PG&E) filed an
    explanatory statement and settlement agreement (Settlement) between
    PG&E and Delta Energy Center, LLC and Los Medanos Energy Center,
    LLC, pursuant to Rule 602 of the Commission's Rules of Practice and
    Procedure.[^1]

2.  PG&E states that the Settlement resolves all contested issues
    addressed by the Commission's prior orders in these proceedings, as
    well as several pending appeals from these orders.[^2] The
    Settlement sets forth, among other things, the payments and charges
    that result from the parties' resolution of the issues of Network
    Upgrade Refunds, Direct Assignment Amounts, Cost of Ownership
    Charges, and Income Tax Component Contribution (ITCC) Security.

3.  The parties request that the public interest standard of review
    apply to their Settlement. Paragraph 10 of the Settlement states:

    It is the Parties' intent that the Commission's right to change any
    provision of this Settlement Agreement shall be limited to the
    maximum extent permissible by law and that any such change, if
    permissible, shall be in accordance with the *Mobile-Sierra* public
    interest standard applicable to fixed rate agreements. *United Gas
    Pipe Line Co. v. Mobile Gas Service Corp.,* 350 U.S. 332 (1956);
    *FPC v. Sierra Pacific Power Co.,* 350 U.S. 348 (1956)
    \[(*Mobile-Sierra*)\].

4.  Further, paragraph 16 of the Settlement states, in part:

    While the Parties agree to the application of the public interest
    standard to this Settlement Agreement and may not unilaterally file
    any complaint regarding this Settlement Agreement, the Parties wish
    to have a means of resolving any implementation disputes that may
    arise.

5.  Comments on the Settlement were due on or before July 26, 2007. No
    comments were filed.

6.  The applicable standard of review for any changes to the Settlement,
    whether proposed by a party, a non-party, or the Commission, acting
    *sua sponte*, is the *Mobile-Sierra* public interest standard of
    review.[^3] The Commission hereby approves the Settlement, finding
    it to be fair and reasonable and in the public interest. The
    Commission's approval of the Settlement does not constitute approval
    of, or precedent regarding, any principle or issue in this
    proceeding.

7.  This order terminates Docket Nos. ER02-1330-008 and ER03-358-003.

By the Commission. Commissioner Kelly concurring with a

separate statement attached.

( S E A L ) Commissioner Wellinghoff dissenting in part

with a separate statement attached.

Nathaniel J. Davis, Sr.,

Acting Deputy Secretary.

UNITED STATES OF AMERICA

FEDERAL ENERGY REGULATORY COMMISSION

 

Pacific Gas and Electric Company Docket Nos. ER02-1330-008

ER03-358-003

(Issued August 20, 2007)

KELLY, Commissioner, *concurring*:

 

The parties to this settlement request that the *Mobile-Sierra* "public
interest" standard of review apply with respect to any future changes to
the settlement, whether proposed by a party, a non-party or the
Commission acting *sua sponte*. This uncontested settlement resolves
issues concerning charges and payments associated with generator
interconnection agreements and generator special facilities agreements
between the parties. These agreements are bilateral contracts between
the parties, similar to the contracts at issue in *Mobile*[^4] and
*Sierra*,[^5] and they do not appear to affect non-settling parties.
Therefore, while I do not agree with the order's statements regarding
the applicability of the *Mobile-Sierra* "public interest" standard of
review, I concur with the order's approval of this settlement agreement.

+-----------------------------------+-----------------------------------+
|                                   | \_\_\_\_\_\_\_\_\_\_\             |
|                                   | _\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ |
|                                   |                                   |
|                                   | Suedeen G. Kelly                  |
+-----------------------------------+-----------------------------------+

UNITED STATES OF AMERICA

FEDERAL ENERGY REGULATORY COMMISSION

Pacific Gas and Electric Company Docket Nos. ER02-1330-008

> ER03-358-003

(Issued August 20, 2007)

WELLINGHOFF, Commissioner, [dissenting in part]{.underline}:

The parties in this case have asked the Commission to apply the "public
interest" standard of review when it considers future changes to the
instant settlement that may be sought by any of the parties. With regard
to such changes sought by the Commission acting *sua sponte*, the
parties have asked the Commission to be limited to the maximum extent
permissible by law and, if permissible, the "public interest" standard
of review. In response to the latter request, the Commission states that
the "public interest" standard should apply in this case.

Because the facts of this case do not satisfy the standards that I
identified in *Entergy Services, Inc*.,[^6] I believe that it is
inappropriate for the Commission to grant the parties' request and agree
to apply the "public interest" standard to future changes to the
settlement sought by a non-party or the Commission acting *sua sponte*.
In addition, for the reasons that I identified in *Southwestern Public
Service Co*.,[^7] I disagree with the Commission's characterization in
this order of case law on the applicability of the "public interest"
standard.

For these reasons, I respectfully dissent in part.

> \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
>
> Jon Wellinghoff
>
> Commissioner

[^1]: 18 C.F.R. § 385.602 (2007).

[^2]: *See e.g.*, *Pacific Gas and Electric Co.,* 101 FERC ¶ 61,079
    (2002), *order on reh\'g*, 102 FERC ¶ 61,070 (2003), *order on
    reh\'g*, 102 FERC ¶ 61,212 (2003), *order on reh\'g*, 117 FERC ¶
    61,294 (2006), *order accepting compliance filing* (July 12, 2007)
    (unpublished letter order), *appeal pending*, *Pacific Gas and
    Electric Co., et al. v. FERC*, Nos. 07-1045 and 07-1047 (D.C.
    Circuit). *See also Pacific Gas and Electric Co.,* 102 FERC ¶ 61,232
    (2003), 108 FERC ¶ 61,038 (2004), *order denying reh\'g*, 118 FERC ¶
    61,106 (2007).

[^3]: As a general matter, parties may bind the Commission to the public
    interest standard.  *Northeast Utilities Service Co. v. FERC*, 993
    F.2d 937, 960-62 (1^st^ Cir. 1993).  Under limited circumstances,
    such as when the agreement has broad applicability, the Commission
    has the discretion to decline to be so bound. *Maine Public
    Utilities Commission v. FERC*, 454 F.3d 278, 286-87 (D.C. Cir
    2006).  In this case we find that the public interest standard
    should apply.

[^4]: *United Gas Pipe Line Co. v. Mobile Gas Service Corp.*, 350 U.S.
    332 (1956).

[^5]: *FPC v. Sierra Pacific Power Co.*, 350 U.S. 348 (1956).

[^6]: 117 FERC ¶ 61,055 (2006).

[^7]: 117 FERC ¶ 61,149 (2006).