`Public Utilities Commission of the
`
`State of California
`
`
`
`
`
`
`
`Complainant,
`
`
`
`v.
`
`
`
`
`Sellers of Long-Term Contracts to the
`California Department of Water Resources
`
`
`
`Respondents.
`
`
`
`California Electricity Oversight Board
`
`
`
`
`Complainant,
`
`
`
`v.
`
`
`
`
`Sellers of Energy and Capacity under
`
`Long-Term Contracts with the
`
`California Department of Water Resources
`
`
`
`Respondents.
`
`
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`)
`)
`)
`)
`)
`)
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`)
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`)
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`Docket No. EL02-60-007
`
`
`
`
`Docket No. EL02-62-006
`
` (Consolidated)
`
`
`UNITED STATES OF AMERICA
`BEFORE THE
`FEDERAL ENERGY REGULATORY COMMISSION
`
`
`
`
`
`
`CALIFORNIA PARTIES’ ANSWER TO REQUEST OF AVANGRID
`RENEWABLES, LLC FOR AN ORDER ON THE INITIAL DECISION
`
`Pursuant to Rule 213 of the Rules of Practice and Procedure1 of the Federal
`
`Energy Regulatory Commission (“FERC” or “Commission”), the California Parties2
`
`oppose the request of Avangrid Renewables, LLC (“Avangrid”) to suspend the accrual of
`
`interest on its refund obligation while the parties wait for an order on the Initial
`
`Decision.3 Full interest is indispensable to complete relief for Californians who incurred
`
`
`
`1 18 C.F.R. § 385.213 (2021).
`2 For purposes of this Answer, the California Parties are the People of the State of California, ex rel. Rob Bonta,
`Attorney General, the Public Utilities Commission of the State of California, Pacific Gas and Electric Co., and
`Southern California Edison Co.
`3 Public Utils. Comm’n of the State of California, Request of Avangrid Renewables, LLC for an Order on the Initial
`Decision, Docket Nos. EL02-60, et al. (July 9, 2021) (“Avangrid Motion”).
`
`
`
`
`
`excessive and unlawful power costs as a result of the dealings with Avangrid’s
`
`predecessor.
`
`Background
`
`In the Initial Decision4 in this proceeding, Presiding Administrative Law Judge
`
`Glazer ruled that the contract by which Avangrid sold electricity to the State of California
`
`was unreasonably priced and imposed excessive burdens on consumers.5 Judge Glazer
`
`determined the harm to Californians under the Avangrid contract to be $258.7 million
`
`dollars before interest. That amount increased to $371 million with FERC interest
`
`accrued through 2015. 6 Interest has continued to accrue since that decision.7
`
`Avangrid now seeks to avoid its interest obligation and short-change California
`
`ratepayers on the relief to which they are entitled, claiming that the continued accrual of
`
`interest is unjust to Avangrid.8
`
`Argument
`
`Commission rules9 mandate an award of interest to accompany refunds under the
`
`Federal Power Act. It is part of the relief necessary to make refund recipients whole. As
`
`the Commission has explained:
`
`Because interest reflects the time value of money, courts have found that
`the Commission's equitable authority to waive interest is narrow and should
`be exercised only in exceptional circumstances. . . .As the D.C. Circuit has
`explained, the payment of interest is not a penalty; rather “interest is simply
`a way of ensuring full compensation. This is why the delay between the
`
`
`4 Public Utils. Comm’n of the State of California, 155 FERC ¶ 63,004 (2016) (“Initial Decision”).
`5 See Initial Decision ¶¶ 1, 381.
`6 Id. ¶ 381.
`7 See 18 C.F.R. § 35.19a(a)(iii)(A).
`8 Avangrid Motion at 5-6.
`9 18 C.F.R. § 35.19a(a)(iii)(A).
`
`2
`
`
`
`time of the customers' injury and the granting of relief is a reason for
`awarding interest, not for denying it, at least where the delay cannot be laid
`at the feet of the customers.”10
`
`The Commission’s reasoning there is dispositive on the issue of interest waiver, in
`
`that it makes clear that the question is whether delay can “be laid at the feet of the
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`customers.”11 Here, the customers have doggedly pursued their refunds for years, and
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`they still wait, despite the Initial Decision determination that Californians are entitled to
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`hundreds of millions of dollars from Avangrid.12
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`There is no injustice in allowing the continued accrual of interest on the refunds
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`that Avangrid owes. To the contrary, for nearly twenty years, Avangrid has had and
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`continues to have use of the funds that it owes to California and has been able to use
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`those funds to its benefit. Having enjoyed the benefit of its excessive charges, Avangrid
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`has no cause to complain.
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`Avangrid has offered no sound justification for waiving the interest requirement
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`while it retains its excessive charges and California ratepayers wait for relief. To waive
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`the interest requirement would grant a windfall to Avangrid while depriving Californians
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`of the relief to which they are entitled under the Commission’s rules.
`
`
`
`
`
`
`10 California Independent System Operator Corp., 168 FERC ¶ 61,127 P 28 (2019) (declining to waive interest
`requirement) (footnotes omitted), quoting Anadarko Petroleum Corp. v. FERC, 196 F.3d 1264, 1268 (D.C. Cir.
`1999). See also Washington Urban League v. FERC, 886 F.2d 1381, 1386 (3d Cir. 1989) (finding that interest is a
`necessary component “in making recipients whole” and is designed to ensure “that the recipient is in fact
`‘refunded’”).
`11 California Independent System Operator Corp., 168 FERC ¶ 61,127 at P 28.
`12 Initial Decision ¶ 381.
`
`3
`
`
`
`Conclusion
`
`There is no basis to waive the continued accrual of interest on amounts Avangrid
`
`owes. Granting that request would only further harm Californians, who are entitled to
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`full relief.
`
`
`
`
`
`/s/ Arocles Aguilar
`Arocles Aguilar, General Counsel
`Candace Morey
`Iryna A. Kwasny
`Public Utilities Commission
`of the State of California
`505 Van Ness Avenue
`San Francisco, CA 94102
`(415) 703-3050
`
`Lucus A. Ritchie
`Mark Rosen
`Pierce Atwood LLP
`254 Commercial Street
`Portland, ME 04101
`(207) 791-1100
`
`Attorneys for the Public Utilities
`Commission of the State of California
`
`
`
`Respectfully submitted,
`
`/s/ Danette Valdez
`Rob Bonta
`Attorney General of California
`Ed Ochoa
`Acting Chief Assistant Attorney General
`Martin Goyette
`Senior Assistant Attorney General
`Danette E. Valdez
`Supervising Deputy Attorney General
`Office of the Attorney General
`455 Golden Gate Avenue, Suite 11000
`San Francisco, CA 94102
`(415) 510-3540
`
`Kevin J. McKeon
`Judith D. Cassel
`Whitney E. Snyder
`Melissa A. Chapaska
`Hawke McKeon & Sniscak LLP
`100 North Tenth Street, P.O. Box 1778
`Harrisburg, PA 17101
`(717) 236-1300
`
`Attorneys for the People of the State of
`California ex rel. Rob Bonta, Attorney
`General
`
`
`
`4
`
`
`
`/s/ Richard L. Roberts
`Richard L. Roberts
`Jane I. Ryan
`Steptoe & Johnson LLP
`1330 Connecticut Avenue, NW
`Washington, DC 20036
`(202) 429-3000
`
`Russell A. Archer
`Southern California Edison Company
`2244 Walnut Grove Avenue
`Rosemead, CA 91770
`
`Attorneys for Southern California
`Edison Company
`
`
`
`/s/ Stan Berman
`Stan Berman
`Eric Todderud
`Berman and Todderud LLP
`3502 Fremont Avenue N.
`Seattle, WA 98103
`(206) 279-3193
`
`Joshua S. Levenberg
`Pacific Gas and Electric Company
`77 Beale Street, B30A
`Post Office Box 7442
`San Francisco, CA 94120
`
`Attorneys for Pacific Gas and Electric
`Company
`
`
`Dated: July 16, 2021
`
`
`
`
`
`
`
`5
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`
`
`CERTIFICATE OF SERVICE
`
`I hereby certify that I have this day served an electronic copy of the foregoing
`
`
`
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`document upon each person designated on the official service list established in Docket
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`Nos. EL02-60 and EL02-62.
`
`
`
`Dated this 16th day of July 2021, at Seattle, Washington.
`
`/s/ Eric Todderud
`Berman and Todderud LLP
`3502 Fremont Avenue N., Suite 2
`Seattle, WA 98103
`(206) 279-3272
`eric@btlawllp.com
`
`
`
`
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`6
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`
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