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Case number 20-1313 et al, City and County of San Francisco Petitioner versus Federal Energy Regulatory Commission.

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Ms.

[00:00:09] Speaker 00:
Mapes for the petitioner, Mr. Edgar for the respondent, Ms.

[00:00:12] Speaker 00:
Ward for the intervener.

[00:00:17] Speaker 01:
We'll just wait to begin until the court clears and counsel for the next case come in.

[00:00:23] Speaker 01:
Good morning, counsel.

[00:00:24] Speaker 01:
Ms.

[00:00:24] Speaker 01:
Mapes, please proceed when you're ready.

[00:00:28] Speaker 05:
Good morning, Your Honors, and may it please the court

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We're here to talk about a practice that PG&E has imposed under its wholesale distribution tariff, under which it denies secondary service for all but the smallest of loads.

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That secondary service allows loads to connect at a lower voltage level without expensive primary facilities that could cost hundreds of thousand dollars more.

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If it's too expensive or if it's physically impossible for San Francisco to install those primary facilities, San Francisco loses the customer.

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It becomes a PG&E retail customer.

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PG&E then serves those facilities using the same secondary facilities it would not allow San Francisco to use to serve the customer.

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Perk should have rejected this practice as the anti-competitive pretext that it is.

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Instead, it rubber-stamped it.

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In doing so, it did not make a single finding that the medium size or small loads discussed here interconnected as secondary threaten the reliability of the grid.

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It did not address a single operational argument made by PG&E or San Francisco's rebuttals to that argument.

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It did not even explain why PG&E can serve its own loads of that size as secondary, why it can serve previously connected San Francisco loads as secondary, why it can serve loads belonging to other wholesale distribution customers as secondary.

[00:01:49] Speaker 04:
Let me ask you, the agency did submit

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an affidavit or declaration that talked about safety and reliability.

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And I understand your point that at least I haven't found in the record a place where the agency said, for example, San Francisco requests X, but if you look at X, which PG&E denied,

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for secondary service, there are safety problems in that one, two, three, four, and there are liability problems, one, two, three, four.

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So that's not there.

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But what is the burden here?

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Because FERC's orders describe the system.

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It describes the relationship that's been going on for many years.

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And now,

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It also says that it's not as though there's an actual policy because sometimes San Francisco's requests have been approved.

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So what measure of specificity is required here?

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Your Honor, I have a couple of answers to that.

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The first is that under the Federal Power Act, FERC's decisions need to be supported by substantial evidence.

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Well, that's more than a scintilla.

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All right?

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So that's why I want to know.

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That's correct.

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However, the agency didn't describe a system.

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It described

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in terms of arguing just this morning, it's self-evident.

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This is a complex system, involves many interconnections.

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PGD has to make these determinations.

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And it has made these determinations and said why, but it hasn't said in this particular example, we didn't think the safety was adequate.

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Your honor, I think there's a number of things in the record that make perks rather conclusory determination that PG and he should have total discretion.

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Not supported by substantial evidence.

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The first is that as you noted for found that PG and he does not have a policy.

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of denying these loads, it grants them in some situations.

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That is actually flatly contradicted by the record.

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The record shows, and PG&E readily conceded in its brief, that in July of 2019, PG&E informed San Francisco that, well, in the past, it had granted a few accommodations for loads above 75 kilowatts.

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It was no longer going to do that going forward.

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That is in Joint Dependence 284,

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And you can see PG and E. That's not what the commission was reviewing in the decisions that we're considering, right?

[00:05:03] Speaker 01:
That's a prospective determination that still, as I understand it, that still hasn't been finally resolved because it's pending.

[00:05:12] Speaker 01:
It's pending now.

[00:05:14] Speaker 05:
I would disagree with that, your honor.

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Um, it is true that after the commission issued its decision in this case, PG and even filed a new tariff stating that it would not grant secondary service at all.

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However, the July, 2019 letter was before the commission.

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In this case, it was under the previous version of the wholesale distribution tariff that was before the commission and the commission did not address that in its order.

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There's actually another part of that that the commission failed to address, which is that if you look at the charts, the both, well, that the PG and E included below FERC and that FERC included in its brief here.

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FERC uses those charts as evidence to show that PG&E was granting secondary service on a regular basis.

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San Francisco alleged in its complaint that PG&E began this practice in late 2017, I believe November of 2017.

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Most of the instances where loads over 75 kilowatts were connected

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shown in those charts are in 2015 or 2016.

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There's a few in 2017, and there's only three in 2018.

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Because FERC didn't set this case for hearing, the record is not as developed as it might otherwise have been.

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But I think of the very few secondary in 2018, many of them might have been in process before 2017.

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So San Francisco filed this complaint relatively soon after PG&E began this new practice.

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FERC did not set up for hearing, and PG&E became more definitive about its practice as the briefing was ongoing at FERC.

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It was clear that as of July 2019, PG&E would not accept any more requests for secondary service.

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It left 75 kilowatts.

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The other thing I would say about that is that the tariff actually has a definitive process to ensure that the safety and reliability of the system are maintained.

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If you look at the tariff itself, it has a process by which San Francisco or any wholesale distribution customer submits an application.

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PG&E then has an obligation to do what is called a system impact study at the customer's expense to determine whether that interconnection can be undertaken safely.

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If it cannot PG&E has the obligation to use due diligence to expand or modify its distribution system to provide the requested service.

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The distribution system in the tariff is explicitly defined to include the secondary system.

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PG&E has not been doing that and it has stated so in the record when it receives a request for secondary service above 75 kilowatts.

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Its practice as of 2017 has been to deny it and to tell San Francisco to submit a new application for primary service.

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It does not perform the required system impact study.

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So there were a few cases in which San Francisco was able to go through a lengthy negotiations process with PG&E to resolve the issue, but it was not receiving proper service under the tariff.

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Um, let's make the tariff.

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Am I right that the tariff, the tariff itself is silent on where PG and he has to provide primary and secondary service, right?

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It is your honor as to which voltage levels.

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So in that case, um, we don't, don't we have to defer to the commission's interpretation?

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Your Honor, I would say that the Commission is entitled to deference as to its interpretation of the tariff.

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I would also say that because the Commission disregarded the process the tariff lays out, the system impact study process, the obligation to expand and modify its distribution system, it does not.

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passed the arbitrary and capricious test.

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And even even with deference, its interpretation fails.

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San Francisco is not, as Perk seems to be stating, stating that it gets total discretion over which voltage levels can be interconnected.

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It wants the tariff process to be followed.

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And what do you do with the commission's statement that in utility, utility,

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the interconnections.

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When you're talking about utility to utility interconnections, that primary service is the norm in the industry.

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Your honor, I would state that that's misleading.

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And I would say what that that's misleading.

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And in fact, I think we use sloppy language in one of our briefs as well.

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And I apologize for that.

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Utility to utility interconnections are normally at higher voltage.

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In many cases, most cases, I believe, that would be at transmission level voltages, where you would have, say, PG&E interconnecting with its southern neighbor, Southern California Edison.

[00:10:03] Speaker 06:
That's even higher than primary.

[00:10:04] Speaker 05:
That's even higher.

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So the kind of situation where we have here, where San Francisco's loads are dispersed within PG&E service territory is relatively unusual.

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It is not unheard of.

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There are other wholesale distribution customers, particularly the Western Area Power Administration that has a very similar setup and which does receive secondary service.

[00:10:32] Speaker 01:
I didn't read you to be taking issue with the premise that putting aside the situations in which is even higher than primary, that primary would be a normal mode or utility to utility.

[00:10:45] Speaker 01:
I didn't read your briefs to be taking issue with that.

[00:10:48] Speaker 05:
I don't think we would.

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I think we fully admitted this is a relatively unusual situation.

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And I would also say that even if we took primary service in all these circumstances, it would still be an unusual situation.

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The interconnection is just not the normal one.

[00:11:12] Speaker 01:
And so you're welcome to continue or to reserve your time for rebuttal, whichever you, whichever you prefer.

[00:11:18] Speaker 05:
Well, I would, I would make one more point, which is that I think it is worth talking about the Western area power administration for a minute.

[00:11:23] Speaker 05:
Um, that is another wholesale distribution customer that is similarly situated to PG or to San Francisco.

[00:11:30] Speaker 06:
Could you just say, who are you talking about?

[00:11:32] Speaker 06:
It is the Western area.

[00:11:34] Speaker 06:
Okay, now I know.

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I just didn't hear you.

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Yeah, that's what the Western area.

[00:11:38] Speaker 01:
Okay, fine.

[00:11:38] Speaker 01:
The one that have a settlement agreement.

[00:11:40] Speaker 05:
Yeah.

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So they have a settlement agreement with PG&E.

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I think they do take service under the same wholesale distribution tariff.

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That settlement agreement is pursuant to the same wholesale distribution tariff and enables them to take service under it.

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Like San Francisco, Western has many small points of interconnections scattered throughout

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The area in which they operate in San Francisco's case that's more constrained within the city in western's case is more spread out in northern California.

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PG&E allows the Western Area Power Administration to add these new secondary points of delivery.

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It has not pointed to any physical or operational or technical differences between them as far as we are aware as in the record none exist.

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The fact that Western receives this service pursuant to a settlement does not allow under this court's precedent

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for to claim that entirely insulates it from undue discrimination.

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This is open access service.

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Every customer under this tariff should receive comparable service if they're similarly situated.

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And that is not something that has happened to date.

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Um, and if there are no further questions, I can reserve the remainder of my time for rebuttal.

[00:12:52] Speaker 01:
Your honor.

[00:12:53] Speaker 01:
Miss Mase.

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We'll hear from the commission now.

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Mr. Edgar.

[00:13:09] Speaker 03:
Good morning.

[00:13:10] Speaker 03:
Thank you, Your Honor.

[00:13:11] Speaker 03:
May it please the court.

[00:13:12] Speaker 03:
I'm Scott Edgar for the Federal Energy Regulatory Commission, and thank you for hearing the case today.

[00:13:17] Speaker 03:
There are just a few points I would like to make in response to the arguments by San Francisco.

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And I do want to begin by emphasizing the point that the commission has made throughout the orders, challenged orders, is that the normal

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norm for interconnection from utility to utility is to connect at primary.

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And it truly is something exceptional that San Francisco is asking for here.

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And again, as we were just discussing, the

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only other arrangement of an eligible customer under this tariff is with the Western Power Administration.

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And I want to go straight to that.

[00:14:00] Speaker 06:
The commission addressed the settlement that was... Isn't the... I mean, that may be the norm, but this all goes back to this Techechi arrangement where

[00:14:12] Speaker 06:
Congress, the whole thing was designed, as I understand it, to let San Francisco compete, right, with providers like, with utilities like PG&E.

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It's a different, because of this history, it's not your normal utility-utility connection.

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Isn't that right?

[00:14:34] Speaker 06:
This is indeed a... And also, you know, and if you look at what PG&E has done in both of these cases,

[00:14:42] Speaker 06:
But with its narrow interpretation of the grandfathering clause and with its limiting of secondary service, it's basically eviscerated or greatly limited the ability of San Francisco to compete, which was the purpose of this whole Cheche project 100 years ago, wasn't it?

[00:15:04] Speaker 03:
I don't think so, Your Honor.

[00:15:06] Speaker 03:
I think San Francisco still can compete and it just has to follow.

[00:15:11] Speaker 03:
I think what the Commission is saying here is San Francisco has to follow the industry norm.

[00:15:17] Speaker 06:
Well, in other words, it can't compete the way it used to, right?

[00:15:21] Speaker 03:
I would agree with that, Your Honor.

[00:15:23] Speaker 06:
And isn't that

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Isn't that a pretty strong argument for suggesting that the normal utility to utility practices just don't apply in this case?

[00:15:33] Speaker 06:
We have a different situation.

[00:15:38] Speaker 03:
I would respond to that.

[00:15:40] Speaker 03:
It is an unusual situation, but I would respond to that by

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Taking the next point from the industry norm is the next point is that there's actual practical explanation for why this is the industry norm.

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And while this is an unusual situation, those practical matters still apply here.

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And the commission addressed this in the initial order, what we call the 2020 order,

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at paragraph 38, this is at JA 363, where the commission made the finding that primary facilities are necessary for the safe and reliable operation of the system.

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And I would also reference the court to paragraph 22 of that same order.

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This is at JA 357.

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The commission there described a little more about

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PG&E's rationale and explanation for- Let me just interrupt you.

[00:16:42] Speaker 06:
I have a couple of questions.

[00:16:43] Speaker 06:
I'm sorry to interrupt you, but you've raised a couple of issues.

[00:16:47] Speaker 06:
You just said that, I think you just said that PG&E is responsible for the safety and reliability of the system, right?

[00:16:54] Speaker 06:
But I didn't see any place in the record where Burke addressed whether or not

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whether or not the voltage level related to safety.

[00:17:14] Speaker 06:
Where did it do that?

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Where did FERC say that above 75 creates a safety or reliability problem, but below 75 doesn't?

[00:17:26] Speaker 03:
The link is to the facilities.

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To the what?

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the link is to the facilities.

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And what the commission is saying is that primary facilities achieve the safety and reliability benefits.

[00:17:44] Speaker 06:
But that's the conclusion.

[00:17:46] Speaker 03:
That is a conclusion.

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This is an APA case, right?

[00:17:49] Speaker 06:
Yes.

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So Burke's decision has to be, Burke has to respond to the arguments that are made by San Francisco.

[00:18:00] Speaker 06:
And one of their arguments is,

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that FERC hasn't demonstrated that there's a relationship between safety in these particular levels.

[00:18:09] Speaker 06:
They say also that under 13.4 PG&E has to exercise due diligence to expand its distribution system to provide secondary services whenever they ask for it.

[00:18:28] Speaker 06:
Now, they may be right or wrong about that, but they say there's nowhere in the record where FERC responded to that.

[00:18:35] Speaker 06:
But their point is they've made arguments about PG&E's responsibility to respond to their request for secondary service.

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They've made arguments that there's no rational connection between the particular levels that PG&E has picked here.

[00:18:53] Speaker 06:
And their argument is that FERC didn't respond to any, which is kind of classic APA, isn't it?

[00:18:58] Speaker 03:
The commission did respond to the service argument and that leads to the commission's analysis.

[00:19:05] Speaker 03:
Wait, what do you mean by this?

[00:19:06] Speaker 06:
You mean the first or the second points I made?

[00:19:09] Speaker 03:
I'm sorry, Your Honor, I can't.

[00:19:10] Speaker 06:
The first or the second point?

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Which did FERC respond to?

[00:19:16] Speaker 03:
The commission made the finding that PG&E has not denied service to San Francisco.

[00:19:22] Speaker 03:
And in support of that, I would point the court to section 215 of the tariff.

[00:19:29] Speaker 03:
And this is in the joint appendix in the other case.

[00:19:32] Speaker 06:
What about the letter that Ms.

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Maeve mentioned?

[00:19:39] Speaker 03:
Which letter?

[00:19:40] Speaker 06:
The letter where PG&E, she said, yes, they were providing service on a case to case basis, but there's a letter dated.

[00:19:47] Speaker 06:
By 2019?

[00:19:51] Speaker 06:
Yeah, the July letter, which says we're not going to do it anymore.

[00:19:56] Speaker 06:
And FERC didn't respond to that either.

[00:19:58] Speaker 03:
The Commission did make the finding in a couple of places in

[00:20:05] Speaker 03:
that the rehearing order, paragraph 10, note 27, this is a JA-15, that some of the examples that we cite in our brief had occurred after 2017.

[00:20:15] Speaker 03:
And I'll also point out that PG&E filed this information in 2017.

[00:20:25] Speaker 03:
I believe the information went up through 2018 and PG&E filed it in May.

[00:20:31] Speaker 03:
So it provided the most up-to-date information and that's the information that we relied on in our brief.

[00:20:39] Speaker 03:
And I think it demonstrates a couple of things that of the interconnections that have been made since San Francisco started taking service in 2015,

[00:20:52] Speaker 03:
Over 40% have been for greater than 75 kilowatts and a majority of those have been at secondary service.

[00:21:06] Speaker 03:
So it's not the case that PG&E has been denying service to San Francisco under the terror.

[00:21:17] Speaker 01:
Um, ask a question about the, although I want to, I don't want to cut off their fatal if, um, I have a question about the filed rate doctrine and it's applicability here.

[00:21:28] Speaker 01:
So as I understand the commission's understanding of the filed rate doctrine, if there were an unwritten policy to the effect that, um, for loads larger than 75 kilowatts,

[00:21:45] Speaker 01:
the service is going to be primary service.

[00:21:47] Speaker 01:
That's not anywhere spelled out in the tariff, obviously.

[00:21:50] Speaker 01:
But if that were the policy that PGNA were implementing, then it would be inconsistent with the file rate doctrine not to have that policy in the terms of the tariff.

[00:22:02] Speaker 03:
I think that's right, your honor.

[00:22:03] Speaker 03:
And I think that's what the commission was getting at.

[00:22:05] Speaker 01:
Right.

[00:22:06] Speaker 01:
So then the question becomes, yeah, I think that is what the commission was getting at at paragraph 12.

[00:22:10] Speaker 01:
on JA 416 to 417 as I read that.

[00:22:14] Speaker 01:
And so then the question becomes, if that would need to be in the tariff, then if there's a policy that that's just the default assumption, as opposed to an inexorable rule, it's a default assumption that if it's above 75 kilowatts, the service is going to be primary.

[00:22:31] Speaker 01:
But we can have a negotiation to figure out whether we're actually going to allow secondary service.

[00:22:35] Speaker 01:
And why doesn't that also need to be

[00:22:37] Speaker 01:
the tariff.

[00:22:38] Speaker 01:
What's the difference between an ironclad rule and a default assumption for purposes of the filed rate doctor?

[00:22:45] Speaker 03:
For the filed rate doctor, and I would refer the court to the to the rule of reason here, this is what your honor is suggesting is it would be a very difficult

[00:22:55] Speaker 03:
rule to codify in the tariff.

[00:22:58] Speaker 03:
And what the commission has found here is that PG&E has actually been flexible in its application.

[00:23:03] Speaker 01:
But I don't know what's difficult about the default assumption.

[00:23:05] Speaker 01:
I mean, it may be that what's difficult is what happens to try to kind of controvert the assumption.

[00:23:11] Speaker 01:
But in terms of the existence of the assumption to begin with, it seems like a pretty straightforward specified rule, which is that the default assumption, unless we put it this way, if there's no further submissions,

[00:23:25] Speaker 01:
by the city, then service is going to be primary if the load is over 75 kilowatts.

[00:23:31] Speaker 01:
Not inexorable, because there could be some other stuff.

[00:23:34] Speaker 01:
And I might agree with you that as to the other stuff, that's not reducible to the level of specificity that would implicate the filed rate doctrine.

[00:23:42] Speaker 01:
But in terms of the existence of the assumption in the first place,

[00:23:45] Speaker 01:
because it's tethered to a particular level, 75 kilowatts, and it just implements an assumption, I just, I don't know enough about the, and I'm not suggesting that I know the answer, I don't know enough about the filed rate doctrine to understand why there would be a distinction between a rule and an extrovert rule that would have to be in the tariff and a default assumption that's equally specific as 75 kilowatts, but for some reason that doesn't have to be in the tariff.

[00:24:09] Speaker 03:
At the end of the day, I think in both cases, whether the assumption is in the tariff or whether it's not, at the end of the day, this is something that PG&E was flexibly working with San Francisco.

[00:24:22] Speaker 03:
And I guess it just, my answer would be that it wouldn't matter because what really matters is

[00:24:30] Speaker 03:
is the particular facts of the case.

[00:24:33] Speaker 03:
And these are the things that we couldn't codify easily in the tariff.

[00:24:37] Speaker 03:
And I think under the rule of reason, the commission was right not to demand that codification.

[00:24:42] Speaker 03:
And the commission referred to some of these things in paragraph 43 of the 2020 order, the ZJI 366, and talked about load size, location, and other factors.

[00:24:53] Speaker 03:
There's also references

[00:24:55] Speaker 03:
in the record when a request is made too far from the facilities, that secondary voltage isn't sufficient to serve that.

[00:25:07] Speaker 04:
No, but here you have San Francisco.

[00:25:10] Speaker 04:
It's not all spread out.

[00:25:12] Speaker 04:
And then the other comment was, well, some of the parts are not numbered.

[00:25:19] Speaker 04:
So it's difficult for inspectors to inspect and report.

[00:25:25] Speaker 04:
I mean, that's just, so put some numbers on.

[00:25:29] Speaker 04:
It seems to be the obvious response there.

[00:25:32] Speaker 04:
And then if there is some part of Northern San Francisco that's too far, FERC can say that, but it hasn't said that, hasn't as to particular request.

[00:25:48] Speaker 04:
And now we have this letter, and I know your point about you just going to 2017.

[00:25:55] Speaker 04:
These options aren't available.

[00:25:58] Speaker 04:
So do you understand that to mean that even if you're in settlement negotiations, FERC would not be able to agree?

[00:26:16] Speaker 03:
I'm sorry, I'm not sure I follow the question.

[00:26:21] Speaker 04:
We're all having problems getting our questions across.

[00:26:24] Speaker 04:
All right?

[00:26:30] Speaker 04:
Your position, as I understand it, is PG willing to negotiate on a case-by-case basis.

[00:26:43] Speaker 04:
And it put that chart out and the agency put it in its opinion.

[00:26:50] Speaker 04:
But then San Francisco comes back

[00:26:54] Speaker 04:
It talks about what's really happening on the ground.

[00:27:00] Speaker 04:
And I don't see where the response to that exists in the order.

[00:27:08] Speaker 04:
I mean, it talks about factors, et cetera.

[00:27:10] Speaker 04:
It talks about an industry preference.

[00:27:18] Speaker 04:
But San Francisco, and I don't see PG in saying not.

[00:27:22] Speaker 04:
is we're different for all these reasons about all these multiple interconnections.

[00:27:28] Speaker 04:
A lot of them are high voltage areas.

[00:27:35] Speaker 04:
In other words, if you read the record, it looks like there is this settled position.

[00:27:43] Speaker 03:
Well, I respectfully disagree with that, Your Honor.

[00:27:46] Speaker 03:
I think our charts support what the findings of the Commission were.

[00:27:50] Speaker 04:
The Commission made the specific finding that the interconnections had continued and the... But you would agree, wouldn't you, that all of San Francisco's requests are not in remote areas and that all of San Francisco's requests, if they involve

[00:28:12] Speaker 04:
units of the system that are not marked, they can be marked.

[00:28:22] Speaker 03:
Yes, Your Honor.

[00:28:23] Speaker 03:
In addition to the point about the markings of the facilities, the PG&A

[00:28:31] Speaker 03:
Also, and the commission talks about this in paragraph 22, this is a JF 357 and there the commission cites PG&E's answer at page 17 and also the previous paragraph 21 and

[00:28:52] Speaker 03:
further references to the answer and the declaration of PG&E's expert.

[00:28:57] Speaker 04:
Okay, we've been through that, haven't we?

[00:28:59] Speaker 04:
These are general statements.

[00:29:00] Speaker 04:
They're not specific to particular requests by San Francisco.

[00:29:06] Speaker 04:
And furthermore, do you agree that PG&E is not following the tariff provision?

[00:29:15] Speaker 03:
No, I don't agree with that.

[00:29:17] Speaker 03:
I believe what the tariff says is that

[00:29:22] Speaker 03:
that PG&E must provide service and service is defined in section 215 of the tariff.

[00:29:28] Speaker 03:
And this is in the JA on the other case, JA 370.

[00:29:33] Speaker 04:
Judge Tatel's questions as framing the question, okay.

[00:29:39] Speaker 04:
And you can put San Francisco out of business basically.

[00:29:43] Speaker 04:
I understand that because it doesn't say PGA has to provide the service that's requested

[00:29:53] Speaker 04:
But doesn't it have to say why you can't have it, particularly since there are these provisions of the tariff that talk about expanding facilities and also having a study done at San Francisco's costs.

[00:30:09] Speaker 03:
That's right, your honor.

[00:30:10] Speaker 03:
There is a provision in the tariff for expanding the system, and that's at 13.4 of the tariff.

[00:30:21] Speaker 03:
There are two problems with that.

[00:30:23] Speaker 03:
First of all, that section refers to denial of service under the tariff.

[00:30:28] Speaker 03:
And then I would refer the court back to the definition of what is service under the tariff.

[00:30:34] Speaker 03:
And that section,

[00:30:36] Speaker 04:
To 15 is it's anything PG and he says it is right, so what do you do with the other provision, then it says that they're supposed to be this study.

[00:30:50] Speaker 04:
At San Francisco's expense.

[00:30:53] Speaker 03:
I would point out that furthermore in that section, there's a reference to good utility practice.

[00:31:00] Speaker 03:
And that gets us back to where we started with this is that the arrangement between to provide utility to utility service as secondary voltage is entirely novel and entirely- Well, it's not council on this record because we know that

[00:31:20] Speaker 04:
Settlements are entered.

[00:31:22] Speaker 04:
We also know that some of PGE's customers, own customers, are receiving secondary service.

[00:31:31] Speaker 04:
So that's just not a viable argument, is it?

[00:31:36] Speaker 03:
So a couple of things in response to that.

[00:31:38] Speaker 03:
First of all, with respect to the one other eligible customer that's receiving secondary voltage that is by settlement, and the commission discussed that in its order,

[00:31:49] Speaker 04:
You know it says it's under Section 210 and 211, we're under 206.

[00:31:56] Speaker 07:
Yes?

[00:31:56] Speaker 04:
Therefore what?

[00:31:59] Speaker 04:
The tariff still applies in all those cases.

[00:32:03] Speaker 03:
Well, what the Commission was saying in paragraph 42 of the initial order was that the arrangement with Western is a bargain for arrangement that resulted from a settlement.

[00:32:15] Speaker 04:
My point, Council, is that

[00:32:18] Speaker 04:
I'm not contesting that that is what happened.

[00:32:22] Speaker 04:
But the fact that PGE agreed suggests that maybe the fact these utilities aren't marked, maybe the fact that there don't seem to be any safety problems, it would be an unusual situation, would it not, for PGE to agree to such a settlement if it forced it to violate

[00:32:48] Speaker 04:
good utility practice and everything else.

[00:32:51] Speaker 03:
I think that's right, Your Honor, but I think that's only part of the equation.

[00:32:55] Speaker 03:
The import of the bargain for agreement is that there was a trade-off.

[00:33:01] Speaker 03:
And PG&E, I would submit, made a determination in the settlement that allowed for it to accommodate this unusual circumstance for Westerners.

[00:33:13] Speaker 04:
So you acknowledge at the beginning that San Francisco presents an unusual circumstance.

[00:33:18] Speaker 04:
It's not the typical.

[00:33:21] Speaker 03:
Yes.

[00:33:22] Speaker 04:
All right.

[00:33:24] Speaker 04:
So I don't know where these arguments get us.

[00:33:26] Speaker 04:
Doesn't the agency have to be more specific?

[00:33:35] Speaker 03:
The agency was specific here, I would submit, Your Honor.

[00:33:37] Speaker 03:
I see I'm out of time.

[00:33:40] Speaker 01:
You can answer that question.

[00:33:41] Speaker 01:
I know that Judge Tatel has another question as well.

[00:33:45] Speaker 03:
I would just refer the court again to the norm that the commission found here and the unusual circumstance of connecting at secondary for the utility to utility connection.

[00:34:01] Speaker 03:
And I would refer the court as well to paragraph 38 of the initial order, which fleshed this out in addition to its summary of PG&E's arguments at paragraphs 21 and 22.

[00:34:15] Speaker 06:
Mr. Edinger, I spent quite a bit of time trying to figure out the relationship between this case and the next case.

[00:34:27] Speaker 06:
And since you're arguing that, I think it's a fair question for me to ask you this question, which is that, and I want to emphasize, this is a totally hypothetical question.

[00:34:37] Speaker 06:
But if I think Burke is wrong in the grandfather case, if I think it's wrong,

[00:34:43] Speaker 06:
And that decision has to be vacated.

[00:34:46] Speaker 06:
Will all grandfathered facilities continue to get secondary service?

[00:34:52] Speaker 06:
In other words, is this case just about non-grandfathered customers?

[00:34:58] Speaker 06:
Do I have that right or not?

[00:35:05] Speaker 03:
This case is, in the case of grandfathering the San Francisco, so the other case, San Francisco does not own facilities for those delivery places.

[00:35:20] Speaker 06:
No, but if FERC is wrong about that and what governs is,

[00:35:27] Speaker 06:
212 F. In other words, if I don't want to get into that argument, because we'll do that in the next 10 minutes or five minutes.

[00:35:36] Speaker 06:
I just want to know that if you lose that case, is this case only about non-grandfather or am I missing something?

[00:35:45] Speaker 03:
I think going forward, Your Honor, that there would

[00:35:49] Speaker 03:
If I understand San Francisco's argument in the other case is they're advocating for a much broader class of grandfathering going forward.

[00:35:57] Speaker 03:
So they would argue, and if the commission were to lose that case, there would be a broader class of facilities that- So the answer to my question is yes, right?

[00:36:12] Speaker 06:
Grandfathered facilities will get

[00:36:14] Speaker 06:
However broadly you define it now or broad, if you do it broadly as San Francisco does, grandfather facilities will get secondary service.

[00:36:24] Speaker 06:
Right?

[00:36:24] Speaker 06:
So this case either way is only about un-grandfathered.

[00:36:30] Speaker 06:
Right?

[00:36:31] Speaker 01:
That's correct.

[00:36:32] Speaker 06:
Okay.

[00:36:32] Speaker 06:
Thank you.

[00:36:35] Speaker 01:
If my colleagues don't have additional questions for you, Mr. Ediger, we'll hear from PG&E council.

[00:36:58] Speaker 02:
May it please the court.

[00:36:59] Speaker 02:
My name is Alexandra Ward on behalf of the intervener for the respondent, PG&E.

[00:37:05] Speaker 02:
First, I'd like to address questions about the system impact study.

[00:37:10] Speaker 02:
The system impact study process was not raised by San Francisco.

[00:37:16] Speaker 02:
So their failure to raise this argument means it cannot be presented to this court.

[00:37:20] Speaker 02:
But for further background on how a system impact study works, it comes after the initial review.

[00:37:25] Speaker 02:
PG&E reviews the application.

[00:37:28] Speaker 02:
There's nothing in this record that speaks to whether or not PG&E disregarded its system impact study practices.

[00:37:38] Speaker 02:
Next, I'd like to address the operating numbers question by Judge Rogers.

[00:37:43] Speaker 04:
Can I just be clear then?

[00:37:45] Speaker 04:
Before PG&E knows what the system impact study would show, it rules on the request.

[00:37:56] Speaker 02:
Your honor.

[00:37:57] Speaker 04:
And it moves on their request on the broad statement of concerns about safety and reliability.

[00:38:07] Speaker 02:
When PG&E receives an application, we conduct an initial review and determine whether or not there's capacity.

[00:38:13] Speaker 04:
My question, yes.

[00:38:17] Speaker 02:
Can you please repeat your question, your honor?

[00:38:23] Speaker 04:
My question is,

[00:38:27] Speaker 04:
As I understand what you're telling me, PG&E interprets the tariff to mean that it can consider a request, deny it on concerns generally about safety and integrity and reliability.

[00:38:57] Speaker 04:
without knowing what the system impact study would show as to any of those factors?

[00:39:09] Speaker 02:
The answer is no, Your Honor.

[00:39:10] Speaker 02:
PG&E would not just deny a request.

[00:39:12] Speaker 02:
What PG&E looks for in an application

[00:39:15] Speaker 02:
is whether all of the information is complete on how the connection and how you would connect at that point of interconnection.

[00:39:21] Speaker 04:
And then the system- So my hypothetical is it's a complete application down to the very last attachment.

[00:39:30] Speaker 04:
Every statement is complete and accurate.

[00:39:35] Speaker 04:
But the utility says we have no obligation

[00:39:42] Speaker 04:
to ask the requesting party to conduct this study because our concern about safety and reliability convinces us we should not grant it.

[00:39:58] Speaker 02:
No, Your Honor, what PG&E would do is decide, okay, this request means that you need a primary interconnection and let's study the primary interconnection.

[00:40:06] Speaker 02:
So it's a matter of studying the details of the best point of interconnection.

[00:40:10] Speaker 04:
So do you understand what I'm getting at?

[00:40:13] Speaker 04:
San Francisco has said, A, it has limited space, B, if it's not given the secondary, it's got to spend all this money on these facilities.

[00:40:24] Speaker 04:
Money it doesn't have.

[00:40:28] Speaker 04:
No one wants to know what the system impact might be.

[00:40:35] Speaker 04:
And given that PG&E is a provider, and so it has this overview, et cetera, of the system as a whole, it doesn't need to know the details.

[00:40:48] Speaker 04:
In other words, this tariff provision, which appears

[00:40:53] Speaker 04:
to be there for a purpose of informing the utility, and maybe the utility will simply say, well, we don't need it, I mean, provider.

[00:41:03] Speaker 04:
But that's not what you're saying they say.

[00:41:05] Speaker 04:
They just don't need to ask for it at all.

[00:41:10] Speaker 04:
And they would only ask for it if they say, well, we're not sure, so we want to get this study.

[00:41:17] Speaker 02:
If San Francisco would like to interconnect a point, has an application submitted to PG&E

[00:41:23] Speaker 02:
PG&E will review the application and, per the terms of the tariff, conduct a system impact study if necessary.

[00:41:32] Speaker 04:
PG&E does it at its own cost?

[00:41:35] Speaker 02:
PG&E does it at San Francisco's cost, Your Honor.

[00:41:38] Speaker 04:
As I understand San Francisco, it's not asking for these studies.

[00:41:47] Speaker 02:
Your Honor, I think

[00:41:48] Speaker 02:
This case really does not come down to the particulars of system impact studies, and there's really not enough in the record to discuss how PG&E conducts its system impact studies.

[00:42:01] Speaker 02:
What's really at issue is the fact that San Francisco wants to continue to receive the type of service that it previously received under its old expired agreement.

[00:42:09] Speaker 04:
When it didn't have to own any of its own facilities and it depends on it, the utilities point is we're concerned about safety and reliability of the system as a whole.

[00:42:19] Speaker 04:
Furthermore, some of these areas may be removed.

[00:42:22] Speaker 04:
Furthermore, the individual units are not Mark.

[00:42:27] Speaker 04:
What more has the utility provided?

[00:42:33] Speaker 02:
Your honor, I believe that the record has evidence about the engineering rationale behind why primary interconnections.

[00:42:40] Speaker 04:
Well, I've read the declaration.

[00:42:42] Speaker 04:
It's very general.

[00:42:44] Speaker 04:
He doesn't believe it's good practice.

[00:42:47] Speaker 02:
Yes, and beyond that, the operating numbers, which you've asked about earlier, there are no operating numbers at the secondary voltage level.

[00:42:55] Speaker 02:
And so the only way.

[00:42:56] Speaker 04:
Oh, why can't you put them on?

[00:42:58] Speaker 04:
That's what I don't understand.

[00:43:00] Speaker 02:
According to my.

[00:43:02] Speaker 04:
He didn't say it's impossible for us to add these numbers.

[00:43:08] Speaker 02:
It's standard utility practice, your honor, in which only primary facilities receive operating numbers and the switch logs are focused on primary interconnections and so it gives the directions operating procedure.

[00:43:21] Speaker 04:
We're under a tariff.

[00:43:23] Speaker 04:
This is a situation of a request by.

[00:43:28] Speaker 04:
a requesting party that is not the usual type of request.

[00:43:32] Speaker 04:
I'm just trying to understand what we're dealing with here.

[00:43:35] Speaker 04:
Otherwise, it looks like there is this unwritten policy.

[00:43:43] Speaker 02:
Your honor, the use of the operating numbers in the practice of having a switch log, that all goes to why it's important for PG&E as the service provider to have discretion when looking at each application on a case-by-case basis on whether- I don't think that's an issue, all right?

[00:44:05] Speaker 04:
Candidly, FERC has agreed to that.

[00:44:08] Speaker 04:
And that's not what the court's questions have been.

[00:44:11] Speaker 04:
addressing.

[00:44:13] Speaker 04:
I think I understand your position.

[00:44:17] Speaker 06:
I'm sorry.

[00:44:19] Speaker 06:
Were you done, Judge Rogers?

[00:44:20] Speaker 04:
Yes, I am.

[00:44:21] Speaker 04:
Thank you, Judge Tatel.

[00:44:23] Speaker 06:
Can I just pursue this operating number thing?

[00:44:25] Speaker 06:
Maybe you could just explain that to me.

[00:44:27] Speaker 06:
As I understand it, secondary connections don't have operating numbers, right?

[00:44:35] Speaker 06:
That is correct, Your Honor.

[00:44:39] Speaker 06:
And so what's a switch log?

[00:44:41] Speaker 02:
So a switch log is the directions that the utility has on how to operate the system.

[00:44:47] Speaker 02:
So an example would be if San Francisco has a police station that's interconnected and PG&E needs to go out there and for purposes of maintenance or if there's an emergency, we can read the switch log and all the operating numbers and we have a clear guide and there's a distinction that the ownership stopped at the meter panel.

[00:45:09] Speaker 02:
But it's after that point in which, and that's why there's the importance of having clarity in the system in a distinct division, is because if the end user, the police station, is taking service from San Francisco, the secondary system does not allow for a clear understanding of whose materials are whose.

[00:45:31] Speaker 06:
Okay, so I see.

[00:45:34] Speaker 06:
So I hope I understand this enough to ask this question,

[00:45:39] Speaker 06:
Why doesn't that same problem, that is the absence of operating numbers, apply to all of the other customers PG&E serves at the secondary level?

[00:45:53] Speaker 06:
Like, for example, the 96% of San Francisco customers.

[00:45:59] Speaker 06:
PG&E's own retail customer.

[00:46:03] Speaker 06:
And the Western Area Power Administration.

[00:46:04] Speaker 06:
How come it doesn't?

[00:46:06] Speaker 06:
They all get secondary service.

[00:46:08] Speaker 06:
Why?

[00:46:09] Speaker 06:
Why hasn't the absence of operating numbers been a problem for them?

[00:46:15] Speaker 02:
Well, the difference, Your Honor, for PG&E's retail customers is that we understand where the ownership stops and then it's our retail customer.

[00:46:22] Speaker 02:
What about the 96%?

[00:46:24] Speaker 02:
For the previously interconnected, the 96% of interconnections that are secondary, those were connected at a time in which under the 1987 interconnection agreement where we treated San Francisco like a retail customer, which it is not.

[00:46:41] Speaker 02:
And so now good utility practice and looking forward, which is why we're ending and this is in

[00:46:49] Speaker 02:
our brief that we are currently stating that we will no longer offer primary service.

[00:46:55] Speaker 02:
And when the settlement agreements end with Western, we will no longer offer primary secondary to them.

[00:46:59] Speaker 06:
I think that's just circular.

[00:47:03] Speaker 06:
You said it's, it's not been a problem in the past for

[00:47:09] Speaker 06:
primary service, but now we're not going to offer it anymore.

[00:47:13] Speaker 06:
Why can't PG&E just assign operating numbers to secondary service?

[00:47:17] Speaker 02:
Sorry, can you speak up, Your Honor?

[00:47:18] Speaker 02:
Just a little bit.

[00:47:19] Speaker 02:
I'm sorry.

[00:47:19] Speaker 06:
Yeah, I'm sorry.

[00:47:20] Speaker 06:
Why can't PG&E just assign operating numbers to customers getting secondary service?

[00:47:27] Speaker 02:
Your Honor, from my understanding is that secondary equipment does not include operating numbers and the operating numbers are only applied at primary.

[00:47:35] Speaker 06:
That's not in the record, by the way, is it?

[00:47:37] Speaker 02:
That is correct.

[00:47:38] Speaker 02:
That's just from my understanding speaking with our engineers.

[00:47:41] Speaker 06:
When I read this, I wondered, my first reaction to this, when I saw your argument about it, I looked in the record to see what the explanation was for why you couldn't just assign operating numbers and FERC didn't even ask that question, did it?

[00:47:55] Speaker 06:
FERC didn't address this at all, right?

[00:47:58] Speaker 02:
Your honor, I would say that FERC as the agency that understands the system has technical expertise, understands that interconnections at primary are the utility, the preference for utility to utility interconnections.

[00:48:10] Speaker 02:
And that although might not, why you can't add it to secondary might not be in the record is something that FERC could have understood with their expertise when making that determination.

[00:48:23] Speaker 04:
Well, too bad they didn't let the court know.

[00:48:27] Speaker 04:
I guess my point is I can understand if I own a piece of equipment, I don't want PG&E coming in and putting numbers all over it.

[00:48:37] Speaker 04:
All right?

[00:48:38] Speaker 04:
But PG&E can say, well, we're not going to provide service unless we can put numbers so that we can identify the equipment.

[00:48:46] Speaker 04:
And therefore, when we got a call from the police station saying there's a fire or something not working, we'll know what piece of equipment to look at because our service logs will identify it.

[00:48:57] Speaker 04:
I mean, that's a problem that PG&E appears to be of its own making.

[00:49:06] Speaker 04:
That's all I'm getting at.

[00:49:08] Speaker 04:
And maybe there's a good explanation, but it's not in the record.

[00:49:13] Speaker 02:
Your Honor, I would say it's really about the utility-to-utility relationship that's most important.

[00:49:18] Speaker 02:
The police station, in your example, shouldn't be calling PG&E.

[00:49:22] Speaker 02:
They should be calling

[00:49:23] Speaker 02:
San Francisco as their provider.

[00:49:25] Speaker 04:
The call comes in from San Francisco saying, we've got a problem at the police station.

[00:49:32] Speaker 04:
PGE says, well, we have no idea where it's located because those facilities are not marked.

[00:49:42] Speaker 04:
I mean, council, this is not rocket science.

[00:49:44] Speaker 04:
That's all I'm getting at.

[00:49:47] Speaker 04:
Anything further?

[00:49:51] Speaker 06:
We had we had a debate a little bit of a debate with Council for San Francisco and FERC about this July 2019 letter from PG&E and its role in this.

[00:50:09] Speaker 06:
Do you want to say something about that?

[00:50:10] Speaker 06:
Can you help us understand what role that letter played and whether FERC is right?

[00:50:17] Speaker 06:
I mean, FERC says in its decision that PG&E had no written or unwritten policy of denying service interconnections serving more than 75 kilowatts.

[00:50:32] Speaker 06:
But this letter seems to suggest the opposite, doesn't it?

[00:50:35] Speaker 02:
Your honor, when I read the letter, I don't think that it explicitly states that moving forward from that date on that we are no longer providing service secondary service for loads above 75 KW.

[00:50:46] Speaker 02:
What Mr. Helen Michael's declaration says and what PG&E's practice is that when CCSF applies for an interconnection and requests secondary service that PG&E looks at the existing distribution infrastructure in the vicinity of the service request to determine whether there'll be sufficient existing capacity to serve CCSF load at secondary.

[00:51:10] Speaker 02:
So it is CCSF.

[00:51:13] Speaker 02:
PG needs practice and you can there have been connections beyond the letter in 2018.

[00:51:18] Speaker 02:
I think that's most important to know.

[00:51:19] Speaker 02:
If you were to look at filings at first that there have been connections at secondary loads above above 75 KW.

[00:51:26] Speaker 01:
Okay, thank you, Miss Ward.

[00:51:32] Speaker 01:
Well, Miss Mase, you have I believe you had seven minutes left in the argument.

[00:51:37] Speaker 01:
Use rebuttal if you'd like.

[00:51:45] Speaker 05:
Thank you.

[00:51:46] Speaker 05:
I have a few points I'd like to clarify if I can.

[00:51:48] Speaker 05:
The first is I want to address what Ms.

[00:51:51] Speaker 05:
Ward just referenced, which was Mr. Highland-Michael's declaration.

[00:51:56] Speaker 05:
And you can find this, I believe, at JA 172.

[00:52:02] Speaker 05:
And unfortunately, Burke and PG&E have been quoting one sentence of that declaration where he does say that if they receive a request for secondary service, they evaluate the capacity on the system.

[00:52:13] Speaker 05:
If you continue on to the next sentence, he says that if that request is for 75 kilowatts or above, they will deny it.

[00:52:21] Speaker 05:
I would also say that we did address the process for connecting loads under the tariff in our initial brief.

[00:52:27] Speaker 05:
Unfortunately, I don't have the JA site, but that was pages 53 and 54 of our brief.

[00:52:33] Speaker 05:
So that is not a new argument.

[00:52:37] Speaker 05:
And there was one other point I wanted to make a correction on.

[00:52:40] Speaker 05:
Judge Tatel, in response to your question about the relationship between this case and the grandfathering case, I would differ with FERC counsel.

[00:52:49] Speaker 05:
The primary and secondary facilities at issue here are different than the intervening facilities.

[00:52:55] Speaker 05:
So if you look at section fourteen point two of the tariff, you'll see a chart showing the facilities intervening facilities needed for primary interconnections and the intervening facilities needed for secondary interconnections.

[00:53:08] Speaker 05:
So San Francisco does actually at many points own intervening facilities at primary and at secondary.

[00:53:14] Speaker 05:
Those are different sets of facilities.

[00:53:17] Speaker 05:
Even if we win in the 212H case, if we lose in this case, PG&E would continue to say that we cannot connect even grandfathered loads above 75 kilowatts to the secondary system.

[00:53:31] Speaker 06:
That's very helpful.

[00:53:32] Speaker 06:
Thank you.

[00:53:33] Speaker 06:
Okay.

[00:53:33] Speaker 06:
Great.

[00:53:34] Speaker 05:
More broadly, I wanted to talk a little bit.

[00:53:36] Speaker 04:
Can I ask you to repeat the JA site?

[00:53:40] Speaker 05:
Yes, Your Honor, that Highland-Michael declaration was JA- No, the intervening facilities, knowing the difference.

[00:53:48] Speaker 05:
Oh, that was the tariff section 14.2.

[00:53:51] Speaker 05:
And I apologize, I don't have that JA site.

[00:53:54] Speaker 04:
Oh, I thought you had a listing.

[00:53:56] Speaker 04:
No, I've got 14.2.

[00:53:57] Speaker 04:
I thought there was an actual listing.

[00:54:00] Speaker 04:
All right, thank you, Council.

[00:54:01] Speaker 05:
There's, you know, I believe it might be in a,

[00:54:04] Speaker 05:
There's a chart it's further down in 14.2 there's a chart showing the intervening facilities for different kinds of interconnections because it also includes.

[00:54:12] Speaker 05:
Right, thank you.

[00:54:14] Speaker 05:
More broadly, I wanted to talk about the relationship of this case to first open access policies, because we've been hearing a lot about.

[00:54:22] Speaker 05:
Well, PG&E might deny San Francisco's requested interconnection and then negotiate with San Francisco or PG&E negotiated with Western or, well, they got that under the old bilateral tariff.

[00:54:34] Speaker 05:
PG&E transitioned to service under this open access tariff to San Francisco in 2015.

[00:54:39] Speaker 05:
FERC has been very clear that part of the reason it enacted its open access reforms in Order 888 was to remedy the kind of discrimination it found in bilateral agreements under the old system.

[00:54:51] Speaker 05:
And frankly, it called PG&E out explicitly in Order 888 as an example of a utility that was creating that kind of discrimination in bilateral agreements

[00:55:01] Speaker 05:
Requiring San Francisco to go through a lengthy negotiation for each routine city pool or library that it wants to connect to PG&E secondary system is more or less the epitome of undue discrimination.

[00:55:14] Speaker 05:
It is not open access to PG&E's distribution system, which is what is provided for in its wholesale distribution tariff.

[00:55:21] Speaker 05:
And moreover, the July 2019 letter actually says the PG&E won't do that anymore.

[00:55:28] Speaker 01:
I believe what it says- Can you just point me to where that is, July 2019 letter?

[00:55:32] Speaker 05:
Where that is?

[00:55:40] Speaker 05:
The July 2019 letter is at JA 284.

[00:55:49] Speaker 05:
And it's discussed in, I believe PG&E's pleadings at JA 158 and JA 172.

[00:55:56] Speaker 05:
And what that says is that PG&E will not continue granting accommodations unless essentially the entire case is settled or the resolution of the entire case is reached.

[00:56:06] Speaker 05:
And if a resolution of the entire case was reached, we wouldn't be here.

[00:56:09] Speaker 05:
That went up to FERC.

[00:56:10] Speaker 05:
FERC denied our complaint.

[00:56:11] Speaker 05:
That was the resolution.

[00:56:13] Speaker 05:
And unless there are any more questions, I'm going to yield my time.

[00:56:18] Speaker 05:
Thank you very much.

[00:56:20] Speaker 01:
Thank you, counsel.

[00:56:21] Speaker 01:
Thank you to all counsel.

[00:56:22] Speaker 01:
We'll take this case under submission.