Commissioner Richard Glick Statement
October 1, 2019
Docket Nos. ER18-169-001, EL18-144-001
Concurrence of Commissioner Richard Glick Regarding Southern California Edison Company
Although I dissented from the underlying order in this proceeding,1
I concur in today’s order denying rehearing because I believe that the Commission has now adequately addressed the arguments against awarding Southern California Edison Company (SoCal Edison) a 50 basis point RTO participation adder. In the underlying order, the Commission took the position that the voluntariness of SoCal Edison’s membership in CAISO was irrelevant to whether an RTO-Participation Incentive was just and reasonable; all that mattered was that SoCal Edison remained a CAISO member.2
I dissented from that order because, assuming that the California Public Utilities Commission was correct in arguing that SoCal Edison was required to remain in CAISO—an argument that the Commission at that point did not dispute3
—there was nothing for the RTO-Participation Incentive to incentivize.4
I concluded that awarding a 50 basis point ROE adder under those circumstances was unjust and unreasonable and not the product of reasoned decisionmaking.
Shortly thereafter, the U.S. Court of Appeals for the Ninth Circuit issued its decision in a substantively similar proceeding involving Pacific Gas & Electric (PG&E). The court held that the Commission was arbitrary and capricious in awarding PG&E an RTO-Participation Incentive.5
The court explained that the Commission has “a longstanding policy that incentives should only be awarded to induce future behavior”6
and that awarding an RTO-Participation Incentive to a utility that is required to remain in an RTO conflicted with that policy.7
In addition, the court held that by granting PG&E an RTO-Participation Incentive without addressing the California Public Utilities Commission’s arguments that there was nothing to incentivize, the Commission had created a “generic incentive” in violation of its own clearly articulated policy.8
On remand from the Ninth Circuit, the Commission concluded that PG&E’s membership in CAISO is voluntary and not required by California law or regulation.9
As a result of that conclusion, PG&E was presumptively eligible for an RTO-Participation Incentive.10
The Commission further found that no party rebutted that presumption and it awarded PG&E a 50 basis point ROE adder.11
I joined those conclusions in full.
The same conclusions apply to this proceeding. For the reasons explained in today’s order, SoCal Edison’s membership in CAISO is voluntary and not required by California law or regulation. As a result, under Commission precedent, SoCal Edison is presumptively eligible for an RTO-Participation Adder. Again for the reasons explained in today’s order, no party has successfully rebutted that presumption and SoCal Edison is, therefore, entitled to a 50 basis point ROE adder.
For these reasons, I respectfully concur.
- 11 S. Cal. Edison Co., 161 FERC ¶ 61,309 (2017) (Glick, Comm’r, dissenting) (SoCal Edison Order).
- 22 Id. P 25; see also Cal. Pub. Utilities Comm’n v. FERC, 879 F.3d 966, 974 (9th Cir. 2018) (CPUC v. FERC) (explaining that, under the Commission’s interpretation in place at the time, a transmission owner’s “ongoing membership itself is the sole criterion for receipt of an incentive adder”).
- 33 SoCal Edison Order, 161 FERC ¶ 61,309 at P 25 & n.49.
- 44 Id. (Glick, Comm’r, dissenting at 2).
- 55 CPUC v. FERC, 879 F.3d at 977-79.
- 66 Id. at 977; see id. at 979 (“FERC needed to inquire into PG&E’s specific circumstances, i.e., whether it could unilaterally leave the Cal-ISO and thus whether an incentive adder could induce it to remain in the Cal-ISO.”)
- 77 Id. at 978-79 (explaining that the Commission’s award of an incentive adder to PG&E was an unexplained departure from the Commission’s longstanding policy).
- 88 Id. at 979.
- 99 Pac. Gas & Elec. Co., 168 FERC ¶ 61,038, at P 42 (2019).
- 1010 See Promoting Transmission Investment through Pricing Reform, Order No. 679, Promoting Transmission Investment through Pricing Reform, Order No. 679, 116 FERC ¶ 61,057, at P 327, order on reh’g, Order No. 679-A, 117 FERC ¶ 61,345 (2006), order on reh’g, 119 FERC ¶ 61,062 (2007)) (“An entity will be presumed to be eligible for the incentive if it can demonstrate that it has joined an RTO, ISO, or other Commission-approved Transmission Organization, and that its membership is on-going.”).
- 1111 Pac. Gas & Elec. Co., 168 FERC ¶ 61,038 at P 52.