CPUC Public Agenda 3300 Thursday, September 13, 2012, 9:00 a.m. San Francisco, CA Commissioners: Michael R. Peevey Timothy Alan Simon Michel Peter Florio Catherine J.K. Sandoval Mark J. Ferron

Safety and Emergency Information The restrooms are located at the far end of the lobby outside of the security screening area. In the event of an emergency, please calmly proceed out of the exits. There are four exits total. Two exits are in the rear and two exits are on either side of the public speakers area. In the event of an emergency and the building needs to be evacuated, if you use the back exit, please head out through the courtyard and down the front stairs across McAllister. If you use the side exits you will end up on Golden Gate Ave. Please proceed around the front of the building to Van Ness Ave and continue on down to the assembly point. Our assembly point is between the War Memorial Building and the Opera Building (House) which is on Van Ness Ave, located between McAllister and Grove.

Public Comment Per Resolution ALJ-252, any member of the public who wishes to address the CPUC about matters before the Commission must sign up with the Public Advisor’s Office table before the meeting begins. If an individual has signed up using the electronic system on the Commission’s website, they must check in with the Public Advisor’s Office on the day of the meeting, by the sign-up deadline. Once called, each speaker has up to 3 minutes at the discretion of the Commission President, depending on the number of speakers the time limit may be reduced to 1 minute. A sign will be posted when 1 minute remains. A bell will ring when time has expired. The following items are NOT subject to Public Comment:  Item: 20 & 40  All items on the Closed Session Agenda

Public Comment Per Resolution ALJ-252, any member of the public who wishes to address the CPUC about matters before the Commission must sign up with the Public Advisor’s Office table before the meeting begins. If an individual has signed up using the electronic system on the Commission’s website, they must check in with the Public Advisor’s Office on the day of the meeting, by the sign-up deadline. Once called, each speaker has up to 2 minutes to address the Commission. A sign will be posted when 1 minute remains. A bell will ring when time has expired. The following items are NOT subject to Public Comment:  Item: 20 & 40  All items on the Closed Session Agenda

Public Comment Per Resolution ALJ-252, any member of the public who wishes to address the CPUC about matters before the Commission must sign up with the Public Advisor’s Office table before the meeting begins. If an individual has signed up using the electronic system on the Commission’s website, they must check in with the Public Advisor’s Office on the day of the meeting, by the sign-up deadline. Once called, each speaker has up to 1 minute to address the Commission. A bell will ring when time has expired. The following items are NOT subject to Public Comment:  Item: 20 & 40  All items on the Closed Session Agenda

Agenda Changes Items shown on the Consent Agenda will be taken up and voted on as a group in one of the first items of business of each CPUC meeting. Items on Today’s Consent Agenda are: 1, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 18, 19, 20, 21, 22, 23, 24, 26, 27, 28, 29, 30, 31, 32 & 33 Any Commissioner, with consent of the other Commissioners, may request an item from the Regular Agenda be moved to the Consent Agenda prior to the meeting. Items: 39 & 42 from the Regular Agenda have been added to the Consent Agenda. Any Commissioner may request an item be removed from the Consent Agenda for discussion on the Regular Agenda prior to the meeting. Item: None have been moved to the Regular Agenda. Items: 2, 44 & 45 have been withdrawn. The following items have been held to future Commission Meetings: Held to 9/27/12: 16, 17, 25, 28, 36, 37, 38 & 38a Held to 10/11/12: 35, 35a & 43

Regular Agenda Each item on the Regular Agenda (and its alternate if any) will be introduced by the assigned Commissioner or CPUC staff and discussed before it is moved for a vote. For each agenda item, a summary of the proposed action is included on the agenda; the CPUC’s decision may, however, differ from that proposed. The complete text of every Proposed Decision or Draft Resolution is available for download on the CPUC’s website: Late changes to agenda items are available on the Escutia Table.

Regular Agenda –Energy Orders Item #34 [11528] Settlement Agreement Revising Distribution Level Interconnection Rules and Regulations – Electric Tariff Rule 21 and Granting Motions to Adopt the Utilities’ Rule 21 Transition Plans R Order Instituting Rulemaking on the Commission’s Own Motion to improve distribution level interconnection rules and regulations for certain classes of electric generators and electric storage resources. Ratesetting Comr. Florio/ Judge DeAngelis PROPOSED OUTCOME: Adopts in full a settlement that presents, among other things, a fundamentally reformed Electric Tariff Rule 21. Rule 21 governs the interconnection by electric generating facilities to the distribution systems of Pacific Gas and Electric Company (PG&(), Southern California Edison Company (SCE), and San Diego Gas & Electric Company (SDG&(.) Finds that the Proposed Settlement meets established criteria for approval of settlements by the Commission. The settlement is reasonable in light of the record, consistent with the law, and in the public interest. Specifically, the decision finds that the Proposed Settlement is reasonable in light of the record as it accomplishes a number of critical goals of this rulemaking by addressing policy and technical issues essential to timely, predictable and transparent interconnection to the distribution system; that the Proposed Settlement is consistent with the law as it establishes interconnection rules that will support the success of existing renewable distributed generation programs created by the Legislature and implemented by this Commission, including, but not limited to, the Net Energy Metering Program (Pub. Util. Code § 2827) and the Renewable Feed-In Tariff Program (Pub. Util. Code § ); and that the Proposed Settlement is in the public interest as it is the result of compromise and agreement among a wide range of industry and ratepayer representatives and responds to the needs of today’s distributed generation market. To implement the Revised Rule 21, PG&(, SCE, and SDG&( shall file Tier 1 Advice Letters within seven days, effective the date filed, with tariff sheets reflecting the revisions to Rule 21 as set out in the Proposed Settlement. Adopts transition plans so that each utility has a process in place to transition, as warranted, pending interconnection requests to the new provisions of Rule 21. ESTIMATED COST: Unknown.

Regular Agenda – Energy Resolutions and Written Reports Item #37 [11515] Directs Invester-Owned Utilities to File a Supplement To Modify Their Home Area Network Implementation Plans Res E-4527, Pacific Gas and Electric Company Advice Letter (AL) 3956-E filed on November 28, 2011, Southern California Edison Company's AL 2662-E filed on November 29, 2011 and San Diego Gas & Electric Company's AL 2307-E filed on November 29, Related matters PROPOSED OUTCOME: Directs Pacific Gas and Electric Company, Southern California Edison Company and San Diego Gas & Electric Company to revise their respective “Home Area Network Implementation Plan” filings to satisfy the intent and requirements of Ordering Paragraph 11 of the California Public Utilities Commission’s Customer Data Access & Privacy Decision ESTIMATED COST: None.

Regular Agenda – Energy Resolutions and Written Reports Item #38 [11534] Pacific Gas and Electric Company's Amended and Restated Power Purchase Agreement With Bottle Rock Power LLC - OPTION A Res E-4521, Advice Letter 4048-E filed on May 25, Related matters PROPOSED OUTCOME: Denies cost recovery for the amended and restated power purchase agreement between Pacific Gas and Electric Company and Bottle Rock Power LLC, owned by private investment companies. ESTIMATED COST: Actual costs are confidential at this time.

Regular Agenda – Energy Resolutions and Written Reports Item #38a [11535] OPTION B Res E-4521, Advice Letter 4048-E filed on May 25, Related matters PROPOSED OUTCOME: Approves cost recovery for the amended and restated power purchase agreement between Pacific Gas and Electric Company and Bottle Rock Power LLC, owned by private investment companies. ESTIMATED COST: Actual costs are confidential at this time.

Resolution E-4521 (Agenda Item #38 and #38a) Pacific Gas and Electric Company’s (PG&E) Power Purchase Agreement with Bottle Rock Power, LLC.

Summary Began operation in 1985 by DWR which suspended operations in 1990 due to lower generation. Sold facility to current owners in 2005 which executed Original PPA in 2006 which was approved by the CPUC in October 2006 (14.5MW/10 year) Performance issues resulted in 1 st A&R PPA in 2007 which was approved by the CPUC in December 2007 Decreased min. capacity to 10MW and set performance milestones to achieve ~16MW by 2008 and pushed out COD Further performance issues resulted in 2 nd A&R PPA in 2010 which was approved by the CPUC in January 2011 Increased contract price for deliveries above the min. requirement, lowered the min. contract capacity, increased term from 10 to 15 years.

Summary Continued Bottle Rock has failed to satisfy the minimum capacity requirements of the 2 nd A&R PPA and has therefore not been able to receive higher payment for deliveries above the minimum capacity established in the PPA. PG&E is seeking approval of a 3 rd A&R PPA in 2012 Increase contract price over 50% from the 2007 PPA 1 Extend term from 15 years to 20 years Maximum contract capacity reduced from 55MW to 25MW Waive non-performance damages 1 The 2007 PPA contains different contract prices for different years of the contract. This price difference assumes PG&E would have exercised its option to extend the 2007 PPA term from 10 years to 15 years. It also reflects the inability of Bottle Rock to receive a higher PPA price upon the achievement of exceeding minimum capacity guarantees.

Option A (#38) Resolution E-4521 (OPTION A) rejects the 3 rd Amended and Restated (A&R) PPA for the existing geothermal facility

Bottle Rock (owned by a private equity group) states it will shut down the facility if it does not receive the A&R PPA The A&R PPA is highly uncompetitive based on price and value compared to other “existing”, “in-state” geothermal projects offered to PG&E that provide the same qualitative benefits, such as job preservation, local system reliability and no network upgrades. The A&R PPA is also high uncompetitive to almost all executed contracts approved by the CPUC in 2011 PG&E has no need for the project which is anticipated to come online upon CPUC-approval of the PPA Option A (#38)

Option B (#38a) Resolution E-4521 (OPTION B) approves the 3 rd Amended and Restated (A&R) PPA for the existing geothermal facility The Bottle Rock project is a currently operating facility that will provide PG&E with Category 1 bundled energy and RECs to meet its portfolio need in the third compliance period The project requires no transmission network upgrades, is a base load resource and provides local resource adequacy benefits

Compared to the PPA currently in effect, the A&R PPA increases the contract price but provides stronger guarantees that Bottle Rock will invest the capital necessary to boost production at the facility. Under the A&R PPA, PG&E has the right to terminate the PPA in 2018 if the facility cannot reliably generate at least 15 MW of capacity by that time. While the A&R PPA does waive significant performance damages that have accrued since 2007, it establishes new performance penalties that are triggered if Bottle Rock fails to invest stipulated amounts in measures to increase production at the facility. Option B (#38a)

Regular Agenda – Energy Resolutions and Written Reports Item #38 [11534] Pacific Gas and Electric Company's Amended and Restated Power Purchase Agreement With Bottle Rock Power LLC - OPTION A Res E-4521, Advice Letter 4048-E filed on May 25, Related matters PROPOSED OUTCOME: Denies cost recovery for the amended and restated power purchase agreement between Pacific Gas and Electric Company and Bottle Rock Power LLC, owned by private investment companies. ESTIMATED COST: Actual costs are confidential at this time.

Regular Agenda – Energy Resolutions and Written Reports Item #38a [11535] OPTION B Res E-4521, Advice Letter 4048-E filed on May 25, Related matters PROPOSED OUTCOME: Approves cost recovery for the amended and restated power purchase agreement between Pacific Gas and Electric Company and Bottle Rock Power LLC, owned by private investment companies. ESTIMATED COST: Actual costs are confidential at this time.

Regular Agenda – Communication Orders Item #40 [11340] Approval of Settlement Agreement I Investigation on the Commission’s Own Motion into the Operations and Practices of Southern California Edison Company, Cellco Partnership LLP d/b/a Verizon Wireless, Sprint Communications Company LP, NextG Networks of California, Inc. and Pacific Bell Telephone Company d/b/a AT&7 California and AT&7 Mobility LLC, Regarding the Utility Facilities and the Canyon Fire in Malibu of October Adjudicatory Comr. Simon/ Judge Kenney PROPOSED OUTCOME: Approves a settlement agreement between the Commission’s Consumer Protection and Safety Division and the following Respondents: AT&7 Mobility LLC, Sprint Telephony PCS, L.P., and Cellco Partnership LLP, d/b/a Verizon Wireless. The settlement resolves all issues regarding the Settling Respondents’ involvement with the Malibu Canyon Fire in October of Requires the Settling Respondents to pay $12 million. Of this amount, $6.9 million will be paid to the State’s General Fund and $5.1 million to the Enhanced Infrastructure and Inspection Fund (EIIF) that will be established pursuant to the settlement agreement. The money paid to the EIIF will be used to strengthen utility poles in Malibu Canyon and to conduct a statistically valid survey of joint-use poles in Southern California Edison Company’s (SCE) service territory for compliance with General Order (GO) 95 safety factor requirements. The Commission’s approval of the Settlement Agreement is subject to the following conditions: (1) The Settling Respondents shall: (a) establish a bank account to receive and disburse funds for the EIIF, and (b) deposit $5.1 million into the EIIF bank account within 45 days from the effective date of today’s decision. (2) If $5.1 million is not adequate to accomplish the objectives of the EIIF that are specified in the settlement agreement, the Settling Respondents shall deposit sufficient additional funds into the EIIF to complete these objectives. (3) The following activities shall be completed within 18 months: conducting a statistically valid survey of joint-use poles in SCE’s service territory for compliance with GO 95 safety factor requirements. (4) The following activities shall be completed within 30 months: upgrading the safety factor for utility poles along 3.38 miles of Malibu Canyon Road. (5) The EIIF shall only pay for material, labor, and services that are directly related to Items 3 and 4 above. The EIIF shall not pay for internal administrative and overhead costs incurred by the Settling Respondents. ESTIMATED COST: There are no costs to customers.

Regular Agenda – Water/Sewer Orders Item #41 [11521] California Water Service Company's Petition to Modify Decision A In the Matter of the Application of California Water Service Company, a corporation, for authority to Implement a Low-Income Ratepayer Assistance Program in compliance with Decision in Application Ratesetting Comr. Sandoval/ Judge McKinney PROPOSED OUTCOME: Adopts All-Party Settlement Agreement modifying collection of surcharge for Low-Income Ratepayer Assistance program. Closes the proceeding. ESTIMATED COST: None.

Regular Agenda – Transportation/Rail Safety Resolutions and Reports Item #42 [11513] California Transportation Commission's Recommendation for Funding for Fiscal Year Res SX PROPOSED OUTCOME: Recommendation to the California Transportation Commission for increasing funding under the California Public Utilities Code section to an amount of $3,850,000 to be set aside in fiscal year for maintaining automatic grade crossing protection devices. ESTIMATED COST: Not within the scope of this resolution.

Commissioners’ Reports

Management Reports

Regular Agenda – Management Reports and Resolutions Item #46 [11537] Report and Discussion by Consumer Protection and Safety Division on Recent Safety Program Activities

LA Metro Safety Issues at the Blue Line-Expo Line Rail Junction Daren Gilbert Program Manager, Rail Transit and Crossings Branch California Public Utilities Commission September 13, 2012

Overview: Washington / Flower Junction Issues Los Angeles County Metropolitan Transportation Authority (“LA Metro” or LACMTA) light-rail vehicles (LRV) lines involved: Blue Line Expo Line (aka “Expo Phase 1”) Summary of Issues Interim Safety Measures Path Forward

Washington / Flower Junction Issues ● The Expo line extends from a track junction off of the Blue line, just south of downtown Los Angeles. ● Both lines are street-running lines in the vicinity of the junction. ● The track junction is within the intersection of Washington Street and Flower street.

Washington & Flower Streets

Washington / Flower Junction Issues The junction was added as part of the Expo construction approximately two years ago. The junction was designed to allow two Blue Line tracks and two Expo Line tracks to intersect. The junction provides for Expo service without interruptions to Blue Line service.

Washington / Flower Junction Issues The junction is also known as the “diamond” due to the resulting shape of the intersecting tracks. The support structure where the rails intersect is called a “frog,” and provides a gap for a wheel flange to cross through an intersecting rail. There are four frogs in the diamond, and two more in the distance. diamond frog

Alignment issues revealed during the construction of this project. Unclear whether the alignment issues originated in the original design or its layout and construction. Alignment issues caused LRV wheels to strike the rail frog intersection point in the diamond. Washington / Flower Junction Issues

Frog point close-up. Evidence of wheel- flange contact.

Washington / Flower Junction Issues LRVs’ eastside wheels strike and damage the eastside frog point. Uncorrected continuing damage would increase the potential for derailment through: Wheels climbing over the frog. LRV wheel and brake gear damage. Expo’s modification pushes the eastside wheels over far enough to avoid hitting the frog point.

Washington / Flower Junction Issues The modification was a large build-up of metal (welded) on the inside of the rail within the frog’s flange-way. The build-up shifts the LRV trucks laterally to avoid hitting the opposite frog point.

Washington / Flower Junction Issues The modification was developed by the EXPO Authority. The modification is not supported by any standard practice in the U.S. The manufacturer of the frog opposed this modification.

Washington / Flower Junction Issues Staff is aware of two occasions when the frog weld build-up chipped and fractured. On March 23, 2012, and June 29, 2012, ultra sonic testing identified weld fractures. The internal fractures became exposed. The fractures caused chipping and cracking within the first layers of the weld, resulting in visible defects. These fractures resulted in the modification being re-welded.

Washington / Flower Junction Issues CPUC Staff Concerns include: Non-standard modification. Ongoing inspection and maintenance. Undetected failure compromising safety. Long-term harm to LRV fleet. Failure or maintenance disrupting service. Derailment of LRV at frog point.

Washington / Flower Junction Issues Interim Safety Measures –5 mph speed restriction for LRVs traversing the diamond. –Two additional visual inspections per week of the frog and modifications, plus other already-required inspections. –Monthly ultrasonic inspections of the welds. –Detailed maintenance procedures for the modification, including wear and condemning limits. –Immediate notification of CPUC staff of any defect or anomaly detected, or any incident at the location. –Advance notice to CPUC staff of inspections and ultrasonic testing.

Washington / Flower Junction Issues Path Forward –CPSD staff has recommended that LACMTA/EXPO replace this diamond. –CPSD Director, General Hagan, issued a directive to replace the diamond in a July 13, 2012, letter. –LA Metro, Expo, and CPSD staff subsequently met and agreed to have an independent track expert evaluate and recommend correction. –CPSD staff, LA Metro, and EXPO interviewed and selected track experts who could assess the junction and provide corrective actions. –The track experts reviewed the site last week. –Staff awaits a report of the findings and recommendations.

Regular Agenda – Management Reports and Resolutions Item #46 [11537] Report and Discussion by Consumer Protection and Safety Division on Recent Safety Program Activities

Management Reports

The CPUC Thanks You For Attending Today’s Meeting The Public Meeting is adjourned. The next Public Meeting will be: September 27, 2012, at 9:00 a.m. in San Francisco, CA