good morning your honour's may please the court my name is john stickman and i'm here on behalf of the petitioners for like irrigation district and modesto irrigation district to consumer own utilities located right here in central california i would like to reserve two minutes for rebuttal at issue in this case is whether or not the federal energy regulatory commission properly interpreted the notice and study requirements of the district's interconnection agreements with pacific gas and electric when it will or will likely requirement before a study can be invoked however on their face the agreements indicate that the standard is may or may reasonably for its use of this higher those on sanction study in the agreements section one point eleven point one one point one point two expressly indicate that studies can only be conducted by either mutually agreed upon third party or if the parties are unable to agree on a third party they are required to conduct the study on a joint basis and i ask you a threshold question so the definition of adverse impact has the phrase materially degrades reliability it seems to me that perhaps the parties are using different definitions of reliability here and that that might be part of the disconnect could you tell me what you mean by reliability sure it's the ability to maintain the  in the system so in in the energy world you balance loads in resources and when you are unable to access generation for example because you're not able to use a supply line like is the instance here that being the california oregon transmission project the single largest inner connection to the district's resources in the pacific northwest and makes it difficult for you to meet your load and reserve requirements i e it makes it difficult to balance your resources so i think you're handsome if i understood it is that reliability for you is about having access to all the supplies of power that you want it's access to the northwest power pool in particular because a north west power pole is a  an entity that we share reserves with and we buy sharing those reserves that's how we meet or reliability needs so it seemed like p g any was talking about reliability being about operating within certain thermal and voltage limits so and they seem to take this from a nerve definition and that seemed much more about the physical operation of a line like do you have physical parts of the line that are impeding the flow of power that seems different to me than your definition which seems to be just about more like access to the people you have contracts with not the physical line do you agree with my assessment of the difference and how you're defining this i think p g is trying to take a hyper technical view of it because it benefits their position however in the past they have been thinking that position and they've looked at the contract as a whole and what its overall purpose is which is to maintain the reliability of each of the interconnected systems systems so if we were to define reliability though in this physical way that it has to do with whether power can actually physically get through the line do you admit that there is no impact on that here no in fact  conceded that in these circumstances when there is a reduction that can affect reliability in fact it actually affects the thermal and voltage limits of the line and yes how does it do that i'm so if you're not able to maintain access to those resources you or your reliability can go down the frequency of your system can go down and it can cause thermal overloads it can cause of writing of problems with your system so like i say the focus on the whether or not our system the details of our system can operate in a in a particular fashion is myopic i think you have to look at what is the purpose of this and you have to look at why in the in the agreement the definitional and long term change to operations includes a reference to modification of the raza remedial action scheme because that is exactly the circumstances that have occurred here and that is exactly that is exactly the type of event the reliability of meant that we would try to prevent it from occurring does the adverse impact on or point to that definition require it to be a material effect  your client's system as opposed to the broader california oregon system correct so it does and we have demonstrated that those impacts are dreck only to us in your mind think about it while  e a person's body can digest food if they've been separated and put in a room where they can't access any nourishment then what will happen they'll die right and that's really what's happening here they're taking the hyper technical view of saying well you can still digest food we don't give you access to it but you know and but i thought your answer so i'd like to go back your answer a moment ago because i thought you said i thought you were going to say this that you still can digest food we just don't have the food but a moment ago i thought you were starting to say actually lacking the food causes me to not be able to digest the food so there's two there's two elements to it if we're not able to access the c o t p and we're not able to meet our load because in the pacific northwest thirty five percent of the load to the energy can cover thirty five percent of the district's load so if they're not able to access that then physically the their ability to operate their system and maintain the reliability their system is affected in some way other than having enough food having enough power in some way actually it affects the digestion on your you're correct if if we if if if if the limits go low enough if we're in a situation where that line is completely cut off then if that happens then we are not able to operate our systems there could be blackouts etc and that's really why we're here at that wouldn't necessarily you can pass out from lack of food that doesn't mean you can't digest i mean i'd like to see if you really have evidence that something happens to the ability of the lines to carry the power when you when you lose some of the supply yes if you look in the brief we reference  saul years evidence where there was an event in the past where there was an outage on the c o t p and because of that outage let me get that reference  so there was no access to that particular line when that occurred it resulted in modesto irrigation district having to scramble to maintain the operations and balance its system so its system started  have physical manifestations that required electricity from elsewhere they scrambled and because it was during an off season i e not in the summer when demand is high they were able to avoid a situation where they had outages so in your mind's eye i think the best way to think of the relationship is if you lose that access even though you can digest you can only sit in that room for so long before sources physically affect you and that's really what's going on now well what we see in the electric world is loads and resources are balanced in real time electricity moves at the speed of light so when you have a situation where that reduction goes on long enough then what happens is you have a situation where the system itself gets sick the system itself cannot maintain the reliability that is needed so the only option is blackouts and that's why we're here that's why we spent so much time and resources on this case because we need to study that that determines once and for all what happens when we lose access to the c o t p i what mr sailors yours declarations is the paragraph twenty six in part is that the restrictions may impair a d's ability to rely on operating reserves is that enough to yes your honor the virus study it is because the standard is may result are may reasonably result and why that matters so but it's also this is important he might he was able to get out of the out of the mess during those circumstances because it was a it was a time the meltwater it was him i want to correct but if that wasn't the case then then then it would be different situation i'm looking at these paragraphs twenty six to thirty that you cited and it sounds to me just like they're talking about a reduction on your analogy of sources of food i don't see anything here can you point me to something in these paragraphs that says that  wind started to not work because they other than just there was less supply coming into them so so when the what he says that you had to scramble to get other sources like wind i don't understand how that's not just about other sources of food right but again it's an issue of if you go long enough without those other sources of food what happens to that the system but i'm asking you where the evidence of that is i mean you're saying that to us but i think there needs to be some evidence that actually if their definition of reliability is right that some some evidence somewhere that there might be a problem with the actual transmission along the lines the physical ability to do that and you're saying that these paragraphs are evidence that there is but i don't see it in the graphs so so number one i just to be clear what i was trying to say is that our view of it is exactly what i said which is if you don't have access you can't maintain the reliability of your system it's just that simple so you do dispute their definition of reliability what happens is over time  n what mr sawyer references were to you getting more resources the whole intent there is if you don't if you're stuck where you can't get that vital supply of food then what happens the system goes down it shuts well sure because there's no supply but that doesn't mean there's something wrong with the physical ability once the supply is there it doesn't break the line the line doesn't melt and now it won't wear the other work later well it depends on the circumstances so it's possible that you could have overload you could have physical of events that occur on the line but i mean that's not discussed in paragraphs twenty six to thirty right so in those circumstances the physical impact is you're having to cut load you're having know you can't you can't you're argument if you can't balance a load in real time and you come up with shortages blackouts exactly what they got i don't think you're getting that in this particular instance so there's a physical damage to the line that occurs it's just a matter of balancing correct but to answer your honor's question if it goes on long enough there could be physical impacts to that that's i hope that i really don't but it seems like i mean maybe back to my first question and it seems like you are relying on a definition of reliability that has to do with enough sources of power coming in that you can keep the power going and they seem to be arguing that a definition of reliability is the actual physical ability of the line and those are different definitions of reliability so if i'm right about that then i'd like to know where what the support is for your definition of reliability so with regard to you know the view that we need access because without access you know you can't balance that's specifically why the remedial action scheme is referenced because the remedial action scheme as far as the districts are concerned has only one sole purpose and that is to protect the california oregon transmission project and maintain its operating limits and if you look in paragraph twenty six of the answer of the federal energy regulatory commission they've knowledge that by maintaining the the transfer capability on the c o t p that you maintain reliability of the district system they'd knowledge that and we pointed that out in our in our brief so that's really you know is there is there a case or a regulatory definition or something of reliability that i can look at that matches the way you seem to be using it well if you're not able to maintain voltage you have blackouts so that's why this idea of maintaining voltage on your system you require i mean that certainly seems like a possible definition of  seem to have a different one so i'm trying to figure out how are we supposed to choose or should we defer to the agency to choose so i believe you have to look at the broader context and purpose of the contract and you have to ask yourself what were they trying to protect here and i think what they were trying to protect is their access at least with regard to the references for me to actually scheme their access over the california oregon transmission project i have want to change focus for just moment i think time is out but if the the the commission's both the order and the order denying rehearing both referred to and i want to read from the your first order the record demonstrates the true lock in modesto conceded that a study of the potential impacts there jointly own facilities was not necessary at and that's what they say in order that's what they say and  and the rehearing again at paragraph thirty six and they're referring basically to your complaint which seems to suggest that based on the information you have been given you did not it isn't it's actually a p g facility and why that matters is because at that's one of the inner connections with the genie and the viewer the position that first is taken is well if there's no overloads on that set of facilities that by the way are not the districts facilities then there is no there is no impact on your systems that between the california oregon system and yours it's one of the sets of facilities that interconnect our system to p g any system at a that as a myopic view because it would be irrational to say that a set of facilities that aren't on your system that we've conceded have nothing to do with the with the remedial action scheme and never have would somehow be affected by an overload on the c o t p the references to the remedial action scheme in the contracts again has only one purpose and that's to protect the california oregon transmission project and by reading out of that reading that protection out of the contract we lose one of the fundamental purposes purposes says of this agreement without without that protection the agreement really provides good morning carol the answer for the commission and i've agreed to share three minutes of my time with his crew for p g any i think the core of this case actually goes to judge friedland's questions but i want to clear up a couple things before getting to that also just for clearing up any confusion about the lines there's a very helpful diagram in the den or in the excerpts of record sorry at p e r one seven zero i think it commission the complaint by the districts focused entirely on the california oregon transmission project but in the record there had been earlier discussion among the parties about also whether there might be problems with this little blue line the last panels westley line over whether reprogramming the remedial action scheme which actually has to do a lot with  situation anyway p g any was able to show to the districts that the existing remedial action scheme hadn't relied on those blue lines for other things so that it wasn't going to implicate their inner connection on the l wesley line and the districts agreed with that so the only reason that's relevant to this proceeding is after we get past the question which i'll get to about the california oregon line p genie came in with evidence that not so much re that because as the commission found that is districts hadn't made the showing they need to make their p g and e came in and said in addition here's everything that we looked at about reprogramming the remedial action scheme and anything that could  possibly be an adverse impact and the only thing we came up with was this last banus wesley line we talked about them they conceded it so it's not at issue here so that's the reason p g and e was focusing on that it was putting in its evidence which the commission didn't didn't have to go that far it could have denied the complaint based on the show we made there but the commission cares about reliability and wanted to consider all the evidence and are there any other effects we need to be concerned about but going to the core of this case is judge friedman's question i think judge thomas as well about the definition of reliability that the commission is using and i would point the court especially to paragraph thirty four in the rehearing order it's it p e r seventeen or the commission says we recognize the significance of import capability of these facilities and the associated benefits i will read the whole thing it says operate these operational aspects are separate from the liability impacts and i know it doesn't flush it out more there but this is a concept that the commission has used in in many orders and perhaps the most relevant ones are the transmission agency orders that were firm by the d c circuit  paragraph sixty one one three three paragraph fifty five of that order it says in very similar language the difference between operational flexibility and reliability impacts now there's no question the operational flexibility which is your ability to schedule your reserves or bringing your energy from where you want to where you purchased that your ability to use these contract rights on the california oregon line the commission doesn't downplay the importance of that and in the transmission agency orders repeatedly said to the parties work together to to figure out how to make make this work for everyone this is important but the question before the commission in this proceeding is whether p g and e had breached its inter connection agreement with the districts in such a way that it should be responsible because this isn't just about a study if you look at private land talking about the definition reliability you would agree that we're not simply talking about the physical capability of the system and sure we're talking about the delivery of energy yes and the commission in in this distinction between operational aspects and reliability i think it really is looking at the thermal voltage kind kind of but you're talking about else to keep the energy flowing so for instance after the reprogramming of the remedial action scheme the california independent system operator which is the path operator for the california oregon line concluded and i think this finding is actually in the transmission agency orders although it's referenced in paragraph thirty four the system operator concluded that the reliability is maintained on the california oregon line so it's not going to so what definition i'm completely confused now i thought you were going to say no but you said yes so what definition of reliability are you using oh the that it's likely to overload and go out of service with something over in other words you're green with a of blackout for example would be that would be unreliable well the commission sometimes never actually has reliability but it is operational it is it is dropping your load it's not because the the line went out of service because it overheated or a switch trip somewhere it's because so again it is something the commission's concerned about but the question is is it p is it on p n p genie under the interconnection agreement to deal with that i understand you to be saying i think now that reliability for purposes of this agreement and what p g and e is responsible for is or is just the physical line and not the contractual sources of power well i'm going to say that's what the commission said  distinguishes between operational aspects which is the scheduling of reserves from the northwest rather than somewhere locally where you find the reserves if a lie if if you were curtailed because of because the california organ line is since we're for that paragraph twenty seven of the rehearing order which is p r fourteen where the commission said that the district's complaint focuses heavily on potential impacts on the california oregon line and a few sentences later it talks about the allocation of transmission capacity on that facility is governed by the district's membership in the transmission agency and the rights and obligations under the operation agreement those rights aren't considered part of the district systems as defined in the inner connection agreements so just step so so it seems like they're saying this is going to maybe cause us to pay a lot of money for wind power because we're not going to get the california organ line and i think you're saying that's not p g and his problem because that's not rely ability within the meaning of the contract now is that right so far yes again not to say the commission doesn't care about about that but in interpreting this contract is it p g and e s responsibility ok so if that's what you're saying then how do we know that from what burke said i mean are we supposed to just is this like everyone is just supposed to know that that's what for a commune's when it says reliability because it seems like they didn't know that that's what you meant and i i don't know how we affirm th agency and if we can really tell from the face of it it could be fleshed out more yes that's why i looked a pair of thirty four where the commission does make a distinction in time back to twenty seven when it says operational characteristics is talking about your ability to schedule the power you want the power that you already have under contract as a post to finding power that you need right now which which might be more expensive if if you're that that matters but but it's not what's at issue here so i look at period thirty four and again i look at i even search for the words and in the transmission agency orders the commission relied on the same distinction and it has made that distinction and i think dozens of so in the world that i normally live in which is does not include this and we talk about summary judgments and we talk about whether there is any evidence to support the nonmoving party is that what i see that more often gas and electric company case versus the federal energy regulatory that case talks about this rule and says that in a summary disposition for goods held that there can be no disputed issues of material fact do you concede that that's the burden that you have to have us affirm the commission's rulings oh well the commission didn't treat it as a summary disposition but i impact and the page before they say the districts offer scant information regarding the facts now they did provide some decorations to challenge the effect  reliability what the commission said and i'm i'm going again i think to a pair of twenty seven among others is that yes the districts put in evidence but all of their evidence went to the california oregon transmission project and none of it scheme could do to the california oregon line and what that in turn could do to the district's operational ability to use their contractual rights to access certain reserves and a different definition of reliability than you are using that's right and so when p g and e came in with this evidence talking about the lifespan is wesley a line the commission also looked at that just as contrary evidence just suggesting that the one potential impact had been addressed to everyone's satisfaction apparently and i do want to leave time for a intervener but i would just make i hesitate to go with digestion alledged analogy because i didn't understand all of myself but but the commission agreed with p g and e and not contested by the districts that food would still be coming in from the last dentist wesley it might not be the food that you prepaid you know already contracted for in the northwest but that food is still coming into the system a cold you had actually asked about our definition of reliability it is we did take it from the north standards it is also the definition set forth in the federal power act section two fifteen that's the problem with the district's argument is the impacts that they're talking about are on the kind of tan colored line on the left hand side but the interconnection agreements only protects the reliability of the little red lines down at the bottom and as this chart shows there are many lines that feed into the little red line so to take the food just an analogy it's like you want to hamburger and you want to order it from mcdonald's and maybe there's a problem getting it from mcdonald's i agree i would never want it for mcdonald's there's a problem getting to go back to power yeah you can there's a problem getting it from well in the way that sorry analyzed this is that there is no reasonable belief no way you could have a reasonable belief that the impacts of the c o t p would actually have an effect on the reliability of the district system which is what is protected in the interconnection agreements and to say that because they can't use a particular contractual arrangement would make any have to guarantee any contractual arrangement they have whether we know about it or not on any lines outside of their system and this goes way beyond what the interconnection agreements provide good points for the study so well i mean and go with it on a summary basis here on affidavits and the threshold to me seems to be pretty low it just may may have an impact and you say well i can't there can't be and you may be right but we're not talking about the ultimate conclusion here we're just talking about the right to g not have shown any impacts because you don't look at what the contractual arrangements are you look at the physical nature of the grit and so it would not have and i can find you the  it is at our two one four two one five when is pandy describes what the study would comprise and how you would perform the study so it seems like it's a small thing to have p j need to perform a study but it is time consuming it's the use of resources and if there's no reasonable basis to think that the impact would actually i think that the effect on the c o t p would actually have an effect on the district systems it is not an efficient use of resources and but in the contract you have or the internet interconnection agreement you have adverse impact defined as affecting the system or physical transfer so arguably when they talk about physical operation of the system they're with that they're within the bounds of asking for the stuff i mean it's i can't i cannot read this is still the same as it was they may not be able to bring power down on this one transmission line but that's a contractual arrangement they can bring power in some other way there are numerous lines that interconnect with their system that is not what it says in the agreement though that's right i understand your argument and why it doesn't matter but the agreement doesn't seem to say that it just says it's going to have an adverse impact either on their operations or the physical it is commonly understood term within the industry and that's why i first was applying it special specialized expertise and interpret what reliability means so i think that she is asking a good question i hear about the definition of adverse impact in the contract why is there a one or two because it seems like the definition you're giving us today of reliability would make one in two say the same thing there are other ways you can impact reliability other than the transfer of power into out her within the system there could be voltage support issues are there could be i'm actually not a technical expert so i can't think of too many right now but there are other ways to impact reliability so you're saying with this materially degrades the reliability and then materially reduces the ability to transfer power in and out those are both not about the contracts they're both about something physical about the lines and somehow they wrote them separately yes the point of the interconnection agreements is to maintain the cordon it operation of the grids of the districts that are connected with p g and e we don't talk about contractual arrangements of where you get power this is meant to preserve the operation of the grid make sure for example you don't add a new generator that would cause a voltage collapse on the other system it's not up to us to know where they get their power from  as long as they are still able to transfer power into their system that is protected under the interconnection agreement and you for the questions thank you you three minutes for a bottle thank you your honors i think you are spot on let's start with the map the concept that there are other lines that interconnect to our system does not in any way demonstrate that somehow there are going to be impacts there's a pre supposition there that we have transmission rights in that we can use these lines and all those things which you didn't hear any of that and the reason you didn't hear any of that is no studies been done how you figure that out as you do study just that and they point to the evidence that the contract would not be looked at in a study you disagree with that absolutely if you take their interpretation of the contract they interpret out completely the reference to remedial actions scheme as the very first definition to a long term change to operations that can trigger the study so with their definition what happens under the circumstances when you have  reduction on the c o t p what you have is again the inability to balance your load and resources so the reference to the remedial action scheme as far as the districts are concerned is it has only one purpose and that is it's disingenuous all of a sudden say that you know there are these contract to obligations and we had no idea about the c o d p well the reference to the media action scheme it's undisputed that reference has one purpose for the districts and that's a protected california oregon transmission project that's it so once we lose those protections we lose the essence of this contract at least as to that particular provision let's talk about coordinated operations that were has been thrown around quite a bit and i think your honor went right to the heart of that which is you know if our systems go down because of their actions we can't coordinate our operations there is no ability to coordinate operations if we don't have access to a vital supply line that we rely on it just doesn't make sense it it's just a rational all of this can be sorted out with a simple study and if we're wrong and we use a third party we pay thirty three quarters of the cost so i don't know what p g is afraid of you know we have t they're the ones with all the data and information about their system they refused to provide it to a so we can't even do our own study it's so but it seems like they're you guys are like ships passing in the night i mean what you think that that is going to look at is different than what they say the state is going to look at so do we is this or do we need to resolve that here today are really not who resolves what you meant when you entered this contract so let's just assume this gets reversed and a study is ordered what would happen is that we would either jointly agree or we would get a third party if there is a dispute as to what is required in the study there's a very detailed process as to dispute resolution regarding studies so this court doesn't have to touch on that later fundamentally starts with what you meant in the contract who's going to decide that it is if there is a disagreement which i actually don't think there is i think ultimately once we get an independent third party there's only really one way to look at this but let's just assume that there is if that occurs then the contracts themselves have a very specific dispute resolution process that we can get to but i don't think the court needs to go anywhere near that at this point for the questions thank you thank you thank you both yards were very helpful and the case of serve to be s