[00:00:01] Speaker 00: Base number 20-1084 et al. [00:00:03] Speaker 00: The city and county of San Francisco petitioner versus Federal Energy Regulatory Commission. [00:00:08] Speaker 00: Ms. [00:00:09] Speaker 00: Mapes for the petitioner. [00:00:10] Speaker 00: Mr. Edgar for the respondent. [00:00:12] Speaker 00: Mr. Liegenberg for Dean Kirby. [00:00:16] Speaker 05: Welcome back. [00:00:17] Speaker 01: Thank you. [00:00:20] Speaker 01: Good morning and your honors and may it please the court. [00:00:24] Speaker 01: This case again concerns FERC's open access tariff for providing service over its wholesale jurisdiction system, open access electric distribution system. [00:00:36] Speaker 01: The part of the tariff issue here is not ambiguous. [00:00:40] Speaker 01: It states that a tariff customer is eligible for service without intervening facilities when it meets the criteria for grandfathering in Section 212H of the Federal Power Act. [00:00:51] Speaker 01: Perk Central Error here is simple. [00:00:53] Speaker 01: It refused to apply Section 212H of the Federal Power Act in its entirety to this tariff that explicitly references it, that explicitly incorporates it, and explicitly defers to it. [00:01:05] Speaker 01: Before for the parties, including PG and E filed a joint brief agreeing to the meaning of the terrorist references. [00:01:12] Speaker 01: They stated that the parties could not agree on the scope of grandfathering under to 12 H that they knew they needed a commission decision as to that matter and that. [00:01:22] Speaker 01: A delivery or interconnection point would be ineligible for service under the tariff only if Section 212H will prohibit the commission from ordering wholesale service to that delivery point. [00:01:34] Speaker 01: And under FERC's Suffolk line of cases, which is the primary case law interpreting Section 212H, FERC would not be prohibited from ordering service to San Francisco. [00:01:44] Speaker 01: But FERC dodged construction of that statute. [00:01:48] Speaker 01: Instead of deferring, or instead of looking at the plain text of the statute, looking at the text of section 212H, looking at how it interpreted 212H in the past, and interrogating and reckoning with that precedent, [00:02:02] Speaker 01: FERC instead stated that it was a reference intended to give certainty to the date as to which grandfathering would attach. [00:02:10] Speaker 01: Maybe there was some strictures to class of customers, but it was not meant to refer to Section 212-H in its entirety. [00:02:19] Speaker 05: Can I just ask you a question about the joint filing? [00:02:23] Speaker 05: Mm-hmm. [00:02:23] Speaker 05: So I thought it was interesting that, and this is JA 613, [00:02:27] Speaker 05: The last sentence of the only full paragraph on that page says the intent of referencing section 212H in the WTT as it pertains to grandfathering was to ensure that the commission's interpretation of the statute was incorporated into the WTT's eligibility rules, which indicates that everybody understood that there was going to be an open question about how exactly the scope of 212H [00:02:53] Speaker 05: Yes, your honor was going to be resolved in circumstances this case, but what was intended by everybody was that whatever the commission's interpretation of the statute was that interpretation would be read into the terror. [00:03:04] Speaker 01: Yes, your honor. [00:03:05] Speaker 01: That was our intention. [00:03:06] Speaker 01: And, um, well PG&E now states it was intended to be ambiguous. [00:03:10] Speaker 01: They joined that brief. [00:03:18] Speaker 01: I would further state that FERC has argued that San Francisco's interpretation of the tariff would frustrate the point of delivery framework of the tariff. [00:03:27] Speaker 01: That's not correct. [00:03:28] Speaker 01: The two are consistent. [00:03:30] Speaker 01: It is true that the tariff has a point of delivery framework and that San Francisco and other tariff customers must apply for service at each point of delivery from which it seeks service for PG&E. [00:03:42] Speaker 01: But we must demonstrate using the criteria of Section 212H that we are entitled to grandfathering or we own intervening facilities at each point of delivery for which we apply. [00:03:53] Speaker 01: So the point of delivery approach and San Francisco's approach to grandfathering are consistent. [00:04:00] Speaker 01: I would say once again that the Western Area Power Administration has a settlement agreement with PG&E, which states that it may add new grandfather points of delivery, and it does so regularly. [00:04:12] Speaker 01: Like San Francisco, that is a, as we discussed, a customer with many small points of interconnection that was receiving service in 1992. [00:04:22] Speaker 01: And once again, this creates a discrepancy between two similarly situated customers that constitutes undue discrimination. [00:04:29] Speaker 01: I also think it's worth noting that Perk explicitly stated that San Francisco's interpretation was consistent with the interpretation in the Suffolk cases, which are the major cases in which it has interpreted the grandfathering provision of Section 212H. [00:04:51] Speaker 01: And if there are no questions. [00:04:52] Speaker 02: Let me just ask you a global question here. [00:04:56] Speaker 02: How would you best describe the impact of these two FERC decisions, the grandfathering case and the secondary service case on San Francisco's system? [00:05:09] Speaker 02: What's the global impact of this on San Francisco's operation? [00:05:15] Speaker 01: Your Honor, I would say that it has [00:05:18] Speaker 01: created a constant struggle to connect the types of customers that San Francisco has served for decades. [00:05:28] Speaker 01: We transitioned to open access service, San Francisco did in 2015, under the understanding that loads served under the old IA would be served under the new tariff. [00:05:38] Speaker 01: That was explicit. [00:05:41] Speaker 01: And it has become clear [00:05:44] Speaker 01: throughout these cases that even when we install intervening facilities, San Francisco is then told that it needs to install primary facilities. [00:05:54] Speaker 01: So it creates layered barriers to surface that make it very difficult. [00:05:57] Speaker 02: And can you, if you lose both of these, can you quantify for us in some way what its impact will be on San Francisco? [00:06:04] Speaker 01: I'm sorry, I know the question was if we lose both. [00:06:06] Speaker 02: Yeah, if you lose both, it's hypothetical question. [00:06:09] Speaker 02: But if if the first two opinions stand, what can you quantify for us what the long term impact is on San Francisco? [00:06:18] Speaker 01: I don't believe I have a monetary quantification. [00:06:22] Speaker 01: I don't believe I have a numerical quantification. [00:06:25] Speaker 01: I would say there are some immediate impacts. [00:06:29] Speaker 01: PG&E has a certain type of network in the city. [00:06:37] Speaker 01: just can't take primary connections. [00:06:39] Speaker 01: So there's certain loads that will never be able to get connected. [00:06:42] Speaker 01: PG&E has trigger points that terminate service to some of San Francisco's old points in its tariff that it didn't deem eligible for grandfathering. [00:06:51] Speaker 01: So some of those, if they exceed capacity, might need expensive renovations or to be terminated. [00:06:57] Speaker 01: And we are also dealing with this additional tariff that's being contested at FERC, which PG&E mentioned in its brief, that would eliminate secondary service entirely. [00:07:07] Speaker 01: including terminating service to San Francisco streetlights and other small unmetered loads on, I believe, February 27th. [00:07:16] Speaker 02: You heard my question about an hour ago to Mr. Hedinger about the impact of all of this on the Hecheche arrangement and enabling San Francisco to compete. [00:07:28] Speaker 02: Did I overstate that? [00:07:30] Speaker 01: the impact on Hetch Hetchy's service of power. [00:07:33] Speaker 01: I don't think so, Your Honor. [00:07:34] Speaker 01: I think that Hetch Hetch, or San Francisco as a congressional mandate to bring Hetch Hetchy power into the city and use it first for municipal purposes. [00:07:42] Speaker 01: And that's what it's been trying to carry out and it's been very difficult to do. [00:07:46] Speaker 02: Does this, I don't want to put words in your mouth, but does this, do these two decisions, are they inconsistent with that goal? [00:07:52] Speaker 02: Do they undermine that objective? [00:07:55] Speaker 01: These decisions undermine that objective, yes, your honor. [00:07:58] Speaker 01: And I would say that Congress was quite explicit in the legislative history and in the statute that it wanted San Francisco to be an alternative to private power purveyors like PG&E. [00:08:09] Speaker 01: It's prohibited from reselling Hetch Hetchy power for resale to a private entity. [00:08:14] Speaker 01: And so its mandate is to do what it's been doing in an attempt to serve customers in the city itself. [00:08:24] Speaker 05: Thank you, Miss Mason. [00:08:25] Speaker 05: Also, my colleagues have additional questions for you this time will give you a remaining time for rebuttal. [00:08:29] Speaker 01: Thank you, Your Honor. [00:08:32] Speaker 05: Mr. Edgar. [00:08:46] Speaker 03: Thank you, Your Honor, and may place the court there. [00:08:50] Speaker 03: Three paragraphs of the commission's orders that I'd like to emphasize quickly in my time. [00:08:57] Speaker 03: The first paragraph is the finding in the initial order, the 2019 order, paragraph 68, the commission found in- What is that in the JA? [00:09:10] Speaker 03: That is at JA 648. [00:09:15] Speaker 03: The commission makes the finding that the tariff at issue here has a delivery point framework throughout. [00:09:23] Speaker 03: And there are other sections of the order that emphasize that as well. [00:09:28] Speaker 03: But the commission made reference to the general rule of section 14.2 of the tariff. [00:09:36] Speaker 03: And this is at, [00:09:42] Speaker 03: J.A. [00:09:43] Speaker 03: 393. [00:09:44] Speaker 03: And this is also the chart I think the court was questioning about the intervening facilities are also listed on that same page. [00:09:54] Speaker 03: But at the top of that page, J.A. [00:09:57] Speaker 03: 393, the commission made the finding that there is a general rule that under this tariff, the interconnections should be, that there should be intervening distribution facilities between- [00:10:11] Speaker 02: Can I just take you back to an antecedent point? [00:10:15] Speaker 02: You mentioned the tariff. [00:10:17] Speaker 02: You mentioned 14.2 in the tariff, okay? [00:10:22] Speaker 02: So let's just look at the language of it. [00:10:23] Speaker 02: It says that distribution customers must own intervening facilities. [00:10:30] Speaker 02: Now I'm quoting. [00:10:32] Speaker 02: except in the case where an eligible customer meets the criteria for grandfathering in section 212H2. [00:10:40] Speaker 02: Well, that 212H2. [00:10:44] Speaker 02: So can you just explain to me how the phrase meets the criteria for grandfathering in section 212H2 doesn't incorporate the criteria in section 212H2? [00:10:58] Speaker 02: I've seen a lot of ambiguous language [00:11:01] Speaker 02: in the decades I've been at this court. [00:11:03] Speaker 02: This is not ambiguous. [00:11:08] Speaker 02: I don't understand how FERC got past this problem. [00:11:11] Speaker 03: I think the commission explains more at paragraph 69 of the 2019 order at JS649 is that this language should not negate what it found in other sections of the tariff. [00:11:25] Speaker 02: And I should add, excuse me, that that's what the parties agree with me. [00:11:30] Speaker 02: That's what San Francisco and PG&E both said it means. [00:11:34] Speaker 02: It was intended to incorporate the 212-F standard into the tariff. [00:11:39] Speaker 02: So you've got the playing language of the tariff, and you've got the written agreement of the parties that that's what it means. [00:11:48] Speaker 02: I'm having trouble getting past that. [00:11:50] Speaker 03: A couple points to that. [00:11:52] Speaker 03: First of all, footnote 154 of the initial order, the commission recognized that the parties believe that precedent under the commission's precedent under Section 212 should apply here. [00:12:03] Speaker 03: And the commission flatly rejected that interpretation. [00:12:06] Speaker 02: But what about the language of the tariff? [00:12:07] Speaker 02: Well, first of all, we're interpreting a contract, basically. [00:12:12] Speaker 02: We're applying contract principles to interpret this, and you've got [00:12:17] Speaker 02: You've got language, plain language, at least I think it's plain, and you've got the interpretation of the parties to it. [00:12:24] Speaker 02: What's FERC's basis for saying that's not what... The parties say that's what they intended. [00:12:28] Speaker 02: FERC says that's not what they intended. [00:12:31] Speaker 02: How can FERC do that? [00:12:33] Speaker 02: How can FERC say that isn't what the parties intended when the parties told FERC that is what they intended? [00:12:40] Speaker 03: The commission has an obligation, again, as the commission explained in the footnote, that the commission acknowledged what the parties had agreed to here. [00:12:48] Speaker 03: The commission didn't overlook that. [00:12:52] Speaker 03: And the commission, of course, is in the best position to interpret its own precedent. [00:12:59] Speaker 03: And what the commission has decided was that precedent doesn't apply here. [00:13:02] Speaker 03: And while that isn't what the parties agreed, the commission explained in that footnote that the precedent applies to other sections of the Federal Power Act and not here. [00:13:17] Speaker 05: But if I could add... I don't understand that conceptually because suppose you have two parties that come together in a contract and they say, we're defining a particular phrase and the way we're going to define this phrase is by reference to the following decision of somebody. [00:13:32] Speaker 05: you know, decision A. It doesn't matter what anybody else thinks about that. [00:13:37] Speaker 05: The parties have already told you that decision A is going to define it. [00:13:40] Speaker 05: But the fact that the author of decision A might say, well, I never contemplated that it would govern that, it doesn't matter because the parties have said, we're going to operate in accordance with whatever decision A says. [00:13:50] Speaker 05: And that's exactly what the party said here at Jays 612 and 613 is that [00:13:56] Speaker 05: those kinds of Suffolk decisions, the interpretation of 212-H, all of that is going to feed into the interpretation of the tariff. [00:14:07] Speaker 05: So I don't understand what room there is for the commission to have a different understanding than what the parties themselves have already told us is their own understanding. [00:14:17] Speaker 03: Clearly from that joint brief, and I believe it's page three of the joint brief, while the parties did to a certain extent agree that the precedent should apply, and again, the commission acknowledged that, clearly there was a great disagreement about what grandfathering meant in the tariff. [00:14:39] Speaker 05: And that's not in the statute. [00:14:40] Speaker 05: I don't think there was any disagreement about the tariff. [00:14:42] Speaker 05: I think there was a disagreement [00:14:44] Speaker 05: about how the statute would be construed. [00:14:46] Speaker 05: But I think everybody understood what the tariff was doing and the tariff was incorporating the statute. [00:14:53] Speaker 05: As to that, I don't see any ground for concluding that there was disagreement. [00:14:57] Speaker 05: It seems like everybody had the same uniform understanding. [00:15:00] Speaker 05: And then they bracketed that, yeah, and I'm just quoting, what the settlement did not do was define grandfathering for purposes of the WDT. [00:15:07] Speaker 05: The parties were aware that they did not fully agree [00:15:10] Speaker 05: on the interpretation or scope of grandfathering under section 212H, and that issue would need to be resolved. [00:15:15] Speaker 05: But that has been caveat. [00:15:18] Speaker 03: I would emphasize again that the language your honor just read, that the parties did not agree on grandfathering, and that's a word that's in the tariff, not in the statute. [00:15:29] Speaker 03: And the statute only refers to the two criteria, what are the criteria of [00:15:36] Speaker 03: of 212H, they are that a state or a political subdivision and that the entity is providing service on October 24th, 1992. [00:15:51] Speaker 03: There's nothing in that language that would help the commission determine whether this tariff should grandfather a class or existing delivery points. [00:16:04] Speaker 02: And with the commission precedent under 212 F does answer that question. [00:16:09] Speaker 02: So first case law suffix two answers that question. [00:16:12] Speaker 02: Now first response is, well, this isn't a 212 F case. [00:16:16] Speaker 02: Of course it's not a 212 F case. [00:16:19] Speaker 02: But the parties, the language of the tariff incorporates Section 212F into the tariff. [00:16:26] Speaker 03: I would add to that analysis. [00:16:28] Speaker 02: No, you don't have to add to it. [00:16:29] Speaker 02: What's wrong with what I just said? [00:16:32] Speaker 03: Well, I would point out in paragraph 28 of the rehearing order that the commission observed that there is a type of class application of grandfathering that PG&E does with these replacement agreements. [00:16:47] Speaker 03: It's actually the same as San Francisco's approach. [00:16:51] Speaker 03: The difference is that the commission doesn't approve grandfathering in perpetuity for new or relocated delivery points. [00:16:59] Speaker 03: And given the delivery point framework of this [00:17:02] Speaker 03: the commission was reasonable to make that finding. [00:17:08] Speaker 02: Can you just tell me once more, I'm sorry I asked the question, my initial question, I'm sorry I asked both about the language of the tariff and the intent of the parties because we ended up talking about the intent of the parties. [00:17:21] Speaker 02: Can you go back to the language of the statute, I'm sorry, the tariff? [00:17:25] Speaker 02: And tell me what's ambiguous about, quote, except in the case where an eligible customer meets the criteria for grandfathering in section 212. [00:17:38] Speaker 02: What's ambiguous about that? [00:17:39] Speaker 03: If I may respond two ways to that, your honor, I think what the commission is finding, and this goes back to paragraph 69 of the initial order, the commission is looking at this language and finding ambiguity. [00:17:54] Speaker 03: The language does not simply say except where... Where is the ambiguity, Mr. Edenshire? [00:18:00] Speaker 02: That's what I don't... I know the commission found ambiguity, but where is it? [00:18:05] Speaker 03: The language doesn't read except where an eligible customer meets. [00:18:09] Speaker 03: It's in the case where an eligible customer meets. [00:18:13] Speaker 03: And the second sentence to the tariff is also important. [00:18:19] Speaker 03: That begins with to the extent [00:18:23] Speaker 03: an eligible customer intends to invoke the grandfathering provision, the eligible customer must do so as part of its application and at that time must provide evidence demonstrating that for each point of delivery. [00:18:36] Speaker 03: And I think what the commission is finding is that it's striking that that doesn't read simply that evidence demonstrating it meets the criteria of 16 USC criteria. [00:18:50] Speaker 03: 824K. [00:18:52] Speaker 03: If it read something like that, it might be clear that a customer class is grandfathered and the commission disagreed with that interpretation of this tariff. [00:19:04] Speaker 03: And in addition to all the other... And what about Suffolk 2? [00:19:09] Speaker 03: And as the commission explains in paragraph 69 of the initial order, that the Suffolk type precedent isn't sufficient to overcome that delivery point framework here that's evident in section 14.2 and other sections. [00:19:26] Speaker 02: Sorry. [00:19:28] Speaker 02: I get your argument. [00:19:29] Speaker 02: I hear your argument. [00:19:30] Speaker 05: So there was one point being made, I think you referenced it, and I know the commission has too in the briefing and in the orders that [00:19:36] Speaker 05: It seems difficult to believe that there would be this kind of in perpetuity result. [00:19:43] Speaker 05: That is the result of Suffolk, right? [00:19:47] Speaker 03: That may be the result of Suffolk. [00:19:51] Speaker 05: Why is there even a may? [00:19:52] Speaker 05: I thought that is the result of Suffolk. [00:19:55] Speaker 03: I just don't want to get in front of the Commission on this. [00:20:01] Speaker 03: there's a public interest component of section 210 and 211. [00:20:06] Speaker 03: And I just, I don't want to get in front of the commission what the commission would have determined. [00:20:12] Speaker 03: Had this been a case under those sections? [00:20:14] Speaker 03: I think in fact, the commission makes this point explicit and it's- But I think the result of Suffolk is that a class gets protected in perpetuity. [00:20:24] Speaker 03: If that is, [00:20:27] Speaker 03: if that's the way the case is applied. [00:20:30] Speaker 03: I just don't know that it absolutely would. [00:20:34] Speaker 03: There are other parts, like I said, there's a public interest component of those proceedings. [00:20:39] Speaker 03: This isn't one of those proceedings and I just don't wanna prejudge what that case would look like. [00:20:45] Speaker 03: But there is a class, I think the commission is acknowledging here that there is a type of class approach under Suffolk. [00:20:56] Speaker ?: Okay. [00:20:57] Speaker 05: Thank you, Your Honor. [00:20:57] Speaker 05: Well, my colleagues have additional questions for you, Mr Edgar. [00:21:01] Speaker 03: Thank you, Your Honor. [00:21:01] Speaker 05: Thank you. [00:21:02] Speaker 05: We'll hear from PG&E Intervenor Council, Mr Levenberg. [00:21:14] Speaker 04: Thank you, Your Honor. [00:21:14] Speaker 04: May it please the court, Joshua Levenberg for Intervenor Pacific Gas and Electric Company. [00:21:20] Speaker 04: I'd like to turn to a couple of the questions [00:21:25] Speaker 04: in particular, the joint brief. [00:21:30] Speaker 02: So was the commission wrong that that's not what you agreed to? [00:21:34] Speaker 04: I think the commission is right in that what we agreed to was what Judge Srinivasan suggested earlier was that we were going to let the commission determine when this issue came to the commission what that meant. [00:21:46] Speaker 04: How do we interpret the statutory provision in light of the context of this case? [00:21:54] Speaker 04: The reason that I think that I might disagree with perhaps some of the hypotheticals that you were proposing before is that both parties were aware of the underlying precedent at FERC, the Suffolk cases. [00:22:06] Speaker 04: And before they entered into the agreement, before they filed the brief, in fact, the complaint that San Francisco filed in the fall of 2014 arose because San Francisco made an application to PG&E to apply grandfathering to [00:22:21] Speaker 04: all of its delivery points. [00:22:23] Speaker 04: San Francisco rejected that based upon its interpretation of 212H. [00:22:29] Speaker 04: San Francisco said, we're relying upon Suffolk to say that they're all grandfather because they're all in the class. [00:22:34] Speaker 04: And PG&E said, that's not our interpretation. [00:22:37] Speaker 04: PG&E's interpretation embedded in the statutory, sorry, embedded in the tariff to refer to the statutory provision was to use a temporal delivery point approach as the statute reads, which is, [00:22:51] Speaker 04: in service as of that date, then you are grandfathered. [00:22:56] Speaker 04: But the new approach, which was the new wholesale distribution tariff, required intervening facilities on a going forward basis. [00:23:04] Speaker 04: So PG&E's interpretation was any new applications are going to have to have intervening facilities, just like all of our other customers do. [00:23:11] Speaker 04: But this is new to you. [00:23:12] Speaker 04: You had a different agreement before where you didn't need those. [00:23:15] Speaker 04: But all other customers have been [00:23:17] Speaker 04: required to install intervening facilities. [00:23:20] Speaker 04: So if you don't have them as of the date that the tariff becomes applicable, we'll leave them and serve them as is. [00:23:28] Speaker 04: But on a going forward basis, you will need those. [00:23:32] Speaker 05: So do you disagree? [00:23:33] Speaker 05: I thought what the commission had told us was that, what the commission council just told us, is that the parties intended to incorporate the commission's decisions. [00:23:43] Speaker 05: Absolutely not. [00:23:44] Speaker 04: I don't think that was an agreement at all. [00:23:46] Speaker 04: And as I said, that dispute has been a dispute between San Francisco and PG&E since, at the earliest, 2013, articulated between the parties and PG&E's answer [00:23:59] Speaker 04: to San Francisco's complaint makes it clear that we do not interpret [00:24:03] Speaker 04: 212H to mean what San Francisco does. [00:24:06] Speaker 04: San Francisco insists that the statute must be read in light of or you have to read in precedent into that interpretation and neither the tariff nor the statute include the language that says class of customers. [00:24:21] Speaker 05: But the last sentence of that paragraph on 613 says the intent of referencing section 212H in the WTT as it pertains to grandfathering was to ensure that the commission's interpretation of the statute. [00:24:34] Speaker 05: was incorporated into the WTT's eligibility rule. [00:24:37] Speaker 04: Right. [00:24:37] Speaker 04: And I think from our perspective, that was a prospective interpretation. [00:24:41] Speaker 04: When it gets to FERC, we will live with whatever the decision is. [00:24:45] Speaker 04: That decision was that the prior precedent doesn't apply in this case. [00:24:50] Speaker 04: And that's why we're here. [00:24:53] Speaker 02: Wait, it says. [00:24:58] Speaker 02: So let me see if I understand this. [00:25:01] Speaker 02: So you think the language [00:25:05] Speaker 02: Here. [00:25:07] Speaker 02: Oh, let's see. [00:25:08] Speaker 02: To ensure that the commission's interpretation of the statute was incorporated into the eligibility rules, right? [00:25:18] Speaker 02: You say that what you were talking about there was whatever the commission's future decision was? [00:25:24] Speaker 04: Pardon me, I couldn't hear the end of your... I'm sorry. [00:25:26] Speaker 02: This is referring to a future commission interpretation, not the current one? [00:25:31] Speaker 04: Correct. [00:25:31] Speaker 04: I mean, as we discussed in our brief, [00:25:34] Speaker 04: The chronology of events was such that the decision to include that language in this. [00:25:42] Speaker 02: I don't understand why. [00:25:44] Speaker 02: Why would the parties, why would that even be on the table? [00:25:52] Speaker 02: I don't get it. [00:25:55] Speaker 04: It arose because in 2013, PG&E filed a new wholesale distribution tariff. [00:26:01] Speaker 04: And while those negotiations were ongoing, the dispute arose about how to interpret grandfathering, the grandfathering clause of 212H, despite the fact that the complaint was filed. [00:26:12] Speaker 02: I'm sorry to interrupt you. [00:26:13] Speaker 02: I'm truly trying to understand your argument. [00:26:17] Speaker 02: Why would the parties have to agree that a future FERC decision interpreting that a future FERC decision was [00:26:28] Speaker 02: incorporated into the tariff. [00:26:30] Speaker 02: Wouldn't it automatically be when the FERC interprets the tariff, that's the interpretation of the tariff. [00:26:36] Speaker 02: The parties don't have to agree on that. [00:26:39] Speaker 04: The reason was because it was still being disputed. [00:26:41] Speaker 04: So that was a live issue in a FERC proceeding in order to settle what was the wholesale distribution tariff litigation. [00:26:52] Speaker 04: And that settlement wasn't approved by FERC until the day before [00:26:57] Speaker 04: the day before the new tariff became effective for purposes of San Francisco. [00:27:05] Speaker 04: The only way to settle that was for both parties to agree to put a placeholder in there. [00:27:11] Speaker 04: What do you think? [00:27:12] Speaker 04: Had PG&E thought that the president applied, we wouldn't have been litigating [00:27:21] Speaker 04: from 2013 until today. [00:27:23] Speaker 04: We would have said that the president applied. [00:27:25] Speaker 02: The other side of this is, okay, so San Francisco is on the other side of the screen. [00:27:30] Speaker 02: What's Miss Maite going to say when she stands up here and I ask her what she thinks about what you just said? [00:27:35] Speaker 04: I mean, I think their brief makes it clear that they think she agrees with this. [00:27:39] Speaker 04: They think that the tariff embeds the precedent that was distinguished. [00:27:46] Speaker 04: That's the approach that San Francisco has been taking, but that's not what the language of the tariff says. [00:27:51] Speaker 04: The language of the tariff was negotiated after the complaint was filed. [00:27:55] Speaker 02: Do you have any other evidence to support this interpretation of the language? [00:28:00] Speaker 02: I don't mean the interpretation. [00:28:02] Speaker 02: Do you have any other evidence you can point us to that this is what you meant? [00:28:06] Speaker 04: I mean, as your client meant when it said- In the record, I think it's just the chronology of events. [00:28:13] Speaker 04: As I said, we filed a tariff in 2013 to require intervening facilities. [00:28:18] Speaker 04: San Francisco then applied for servicing. [00:28:20] Speaker 04: All of our points are grandfathered because we don't have intervening facilities and we're grandfathered. [00:28:27] Speaker 04: Eugenie rejected that approach. [00:28:29] Speaker 04: and said, you're not grandfathered. [00:28:32] Speaker 04: We're not using a class of customers approach. [00:28:35] Speaker 04: That approach is not applicable here. [00:28:39] Speaker 05: Do you read the commission to have actually carried out what even you are saying was the intent of the statute, which is to ensure that the commission's interpretation of the statute? [00:28:56] Speaker 05: was incorporated? [00:28:57] Speaker 05: I do. [00:28:57] Speaker 04: I thought the commission made pretty clear that it wasn't interpreting the statute because... As I said, I think San Francisco took an approach that was the statute should be interpreted through the lens of Suffolk. [00:29:11] Speaker 04: And PG&E's interpretation was that the statute should be interpreted through the lens of the face value of it, which was drawing a temporal line in the sand. [00:29:20] Speaker 04: So in 1992, when Congress amended the Federal Power Act, [00:29:24] Speaker 04: It stated that from this point forward, intervening facilities would be required, but any existing interconnections that did not have intervening facilities were grandfathered. [00:29:35] Speaker 04: That's PG&E's approach. [00:29:37] Speaker 04: And so that's when the commission issued its order, that's the approach that PG&E had proposed and proffered throughout. [00:29:47] Speaker 05: Let me ask my colleagues if they have any additional questions for you, Mr. Levener. [00:29:50] Speaker 04: If you don't mind, I'd like to at least respond to one of Judge Tatel's questions to San Francisco about what the impact is. [00:29:57] Speaker 04: I think it's worth mentioning that in the grandfathering context, there has been no impact. [00:30:02] Speaker 02: I'm sorry, in the grandfathering context, what? [00:30:05] Speaker 04: In the context of you, I think you asked, what's the impact of the outcome of both of these cases? [00:30:11] Speaker 04: The primary versus secondary case and the grandfathering case. [00:30:13] Speaker 04: I think in the context of the grandfathering case, there's been no impact. [00:30:18] Speaker 04: So the fact that [00:30:21] Speaker 04: work ruled in favor of PG&E has not led to any changes at San Francisco. [00:30:26] Speaker 04: San Francisco sort of had in its briefing a suggestion that there was off tariff service or this alternative. [00:30:34] Speaker 04: In fact, all of the delivery points that were previously served under the prior 1987 interconnection agreement have currently been served under the wholesale distribution tariff. [00:30:46] Speaker 04: There have been no disconnections, there have been no [00:30:49] Speaker 04: The concerns were that PG&E was going to say you're not grandfathered and therefore you're converting it to PG&E's retail service. [00:30:55] Speaker 04: There are zero examples of that. [00:30:58] Speaker 04: So nothing has happened. [00:30:59] Speaker 04: There has been no impact to San Francisco because of the grandfathering decision. [00:31:03] Speaker 04: with respect to the primary versus secondary decision, which is, you know, there's an overlap. [00:31:08] Speaker 04: I think the San Francisco, there has been, we have had disputes, and I think some of them are raised in San Francisco's pleadings. [00:31:16] Speaker 04: But I think, you know, ultimately, what I think is important to understand, which I think appears in our briefs, there's nothing that prevents San Francisco from providing secondary service to its own customers. [00:31:27] Speaker 04: It's a utility. [00:31:29] Speaker 04: So that case seems to me to suggest when San Francisco says we don't want to do this is it would be expensive or we don't have room. [00:31:37] Speaker 04: The argument I think is that why should that be why should that responsibility be foisted upon PG&E? [00:31:44] Speaker 04: Why doesn't San Francisco take on the role or responsibility of providing secondary service to its own customers in the way that other utilities do? [00:31:51] Speaker 04: You mean by developing intervening? [00:31:54] Speaker 02: Pardon me? [00:31:54] Speaker 02: By developing intervening, right? [00:31:57] Speaker 02: Its own intervening. [00:31:59] Speaker 02: Sorry, I couldn't hear you. [00:32:01] Speaker 02: How would it do that? [00:32:03] Speaker 04: All utilities have the opportunity to provide whatever facilities they want. [00:32:08] Speaker 02: So if you want to provide... So it would develop its own intervening facility. [00:32:12] Speaker 04: Absolutely. [00:32:13] Speaker 04: San Francisco, if PGD only provides primary service on a going forward basis, just like every other utility in the United States, San Francisco can step down with transformers and provide secondary service to its own customers. [00:32:26] Speaker 04: The question is, why should PG&E provide secondary service to San Francisco's customers directly? [00:32:31] Speaker 04: Why should it? [00:32:32] Speaker 05: I think the question is, why should PG&E continue to? [00:32:34] Speaker 05: Because it's not as if the world started without any secondary service before. [00:32:38] Speaker 05: Absolutely. [00:32:39] Speaker 05: Their secondary service wasn't in existence. [00:32:40] Speaker 05: And the question is whether it's going to continue. [00:32:44] Speaker 05: OK. [00:32:45] Speaker 05: OK. [00:32:45] Speaker 05: Thank you, Council. [00:32:46] Speaker 05: Thank you. [00:32:47] Speaker 04: Appreciate it. [00:32:52] Speaker 05: Ms. [00:32:53] Speaker 05: Mapes, you have the rest of your time remaining, which [00:32:57] Speaker 05: I don't know exactly how long it was. [00:32:58] Speaker 05: I think it was around seven minutes. [00:32:59] Speaker 01: Thank you, Your Honor. [00:33:01] Speaker 01: Well, I'll briefly address Mr. Levenberg's last point first, which is that it gets to the heart of why FERC exists. [00:33:07] Speaker 01: The reason San Francisco can't easily provide secondary service to its own customers is that it would have to build a duplicative distribution system throughout San Francisco for the most part and [00:33:19] Speaker 01: By and large, we've as a society judge that to be an inefficient use of resources. [00:33:24] Speaker 01: San Francisco actually does own distribution facilities at various points within the city. [00:33:29] Speaker 01: For instance, it serves, and I believe this is in the record, the new Hunter's Point development in a certain portion of the city using its own distribution facilities. [00:33:38] Speaker 01: in an old space-constrained city like San Francisco to serve streetlights, libraries, police stations throughout the city would truly require building a duplicative distribution system. [00:33:50] Speaker 01: You'd have two sets of wires running under the streets. [00:33:53] Speaker 01: I have a few other points I wanted to make. [00:33:58] Speaker 05: The first is related... Could you address the party joint's omission and... [00:34:04] Speaker 01: Absolutely, Your Honor. [00:34:05] Speaker 01: And unsurprisingly, I do not agree with Mr. Levenberg about our intent. [00:34:10] Speaker 01: I think probably the best place, the best evidence in the record as to that is if you look at the briefs that PG&E filed before the ALJ, who heard this case adhering at the commission, and its briefs on exceptions to the commission, PG&E argued whether or not its interpretation fit within FERC's precedent in those briefs. [00:34:30] Speaker 01: It did not argue that FERC's precedent was irrelevant to those briefs. [00:34:34] Speaker 01: It argued that its interpretation fit that precedent. [00:34:38] Speaker 01: It may also have argued that that precedent should be overturned. [00:34:41] Speaker 01: If the commission viewed differently, it did not argue that somehow 212-H in this tariff exists in some kind of state divorce from the commission precedent. [00:34:51] Speaker 01: And that argument at no point appeared in the record until it appeared in the commission's order. [00:34:59] Speaker 01: Another point I wanted to make was that Mr. Levenberg mentioned that the statute, in his view, refers to points of delivery. [00:35:08] Speaker 01: I would point to the language in 212-H, which refers to such ultimate consumer that was receiving power on October 24, 1992. [00:35:16] Speaker 01: It does not refer to point of deliveries. [00:35:19] Speaker 01: It does not refer to [00:35:22] Speaker 01: Locations and I believe the commission suffix decision will not directly at issue here was informed by that such ultimate consumer issue. [00:35:30] Speaker 01: I also wanted to address the contention that we haven't suffered any harm from the grandfathering decision. [00:35:38] Speaker 01: I would note that the new wholesale distribution tariff case that PG&E references in its briefs actually does terminate service to a very large category of load that PG&E has argued is not entitled to grandfathering, and that is its street lights and other small municipal loads that have traditionally not been metered. [00:35:57] Speaker 01: PG&E has since 2015 classified that load as not qualified for service under the wholesale distribution tariff and not entitled to grandfathering. [00:36:07] Speaker 01: and it now seeks to terminate service to that load originally at the end of the year, but I believe it is filed for a stay of a month or two. [00:36:13] Speaker 01: And its concept is that that load would become PG&E retail customers instead. [00:36:22] Speaker 01: And I wanted to offer one analogy that I thought might be helpful on the issue of the point of delivery framework in the tariff. [00:36:30] Speaker 01: I believe Mr. Ediger discussed while the tariff doesn't just say you apply for grandfathering, it says you apply for a point of delivery. [00:36:37] Speaker 01: And that's true, but I would note that the tariff contemplates that [00:36:40] Speaker 01: Customers might apply for many points of delivery and they might apply for many points of delivery at one time. [00:36:46] Speaker 01: So for instance, if San Francisco submitted an application for 10 points of delivery and five of them were privately owned coffee shops and five of them were public libraries, San Francisco would have the obligation under the tariff to show it owned intervening facilities for those privately owned coffee shops. [00:37:02] Speaker 01: And under San Francisco's interpretation, it could then show evidence of eligibility for grandfathering for the five libraries. [00:37:08] Speaker 01: And that's how our interpretation [00:37:10] Speaker 01: gives meaning to the point of delivery approach. [00:37:15] Speaker 01: And if there's no other questions, I'll thank you for hearing this case. [00:37:19] Speaker 01: Could you just repeat the last point you were making? [00:37:23] Speaker 01: Yeah, absolutely. [00:37:24] Speaker 01: And so I was trying to make [00:37:27] Speaker 01: there is that under the terrorist point of delivery approach, grandfathering belongs to the ultimate consumer that is taking service at a particular point of delivery. [00:37:39] Speaker 01: So if we submit multiple applications, five of them might be for customers like libraries that are eligible for grandfathering, and five of them might be for customers like Starbucks. [00:37:50] Speaker 01: on private property that are not. [00:37:52] Speaker 01: So we would need to show that we owned eligibility, or we owned intervening facilities for those five Starbucks. [00:37:57] Speaker 01: And we would also show that we met the criteria of 212-H as the grandfathering for the five libraries. [00:38:03] Speaker 01: So we would be presenting evidence for each point of delivery, but it may be different for each point of delivery, and we may be eligible for service for different reasons. [00:38:12] Speaker 05: And in fact, as I think as I think you pointed out in the recent in the record, San Francisco obviously has filed applications that involve showing that they're intervening facilities because the grandfathering issue just doesn't even come up with some points of. [00:38:25] Speaker 01: That's right, Your Honor. [00:38:26] Speaker 01: And the reason the points of issue here we have argued are entirely eligible for grandfathering. [00:38:31] Speaker 01: But that is effectively why we submitted them in this application. [00:38:34] Speaker 01: There are other points of delivery that whenever part of this case where it's clear we on intervening facilities and therefore grandfathering doesn't even come up. [00:38:42] Speaker 01: That's right. [00:38:44] Speaker 05: Thank you, counsel. [00:38:45] Speaker 05: Thank you to all counsel will take this case under submission as well.