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Davis v. Southern California Edison Co.

California Court of Appeals, Second District, Seventh Division

April 7, 2015

DAVID DAVIS, Plaintiff and Appellant,
v.
SOUTHERN CALIFORNIA EDISON COMPANY, Defendant and Respondent.

APPEAL from a judgment of the Superior Court of Los Angeles County, No. EC061441 Donna Fields Goldstein, Judge.

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COUNSEL

David Davis, in pro. per., for Plaintiff and Appellant.

Leon Bass, Jr., and Julia A. Mosel for Defendant and Respondent.

OPINION

FEUER, J.[*]

INTRODUCTION

This action arises from plaintiff David Davis’s applications to Southern California Edison Company (SCE) to interconnect solar generating systems on property he owned to the SCE electricity distribution system (electricity grid) to generate electricity for use on those properties and to sell to SCE. Davis contends that SCE, in processing his applications, violated SCE's tariff rule 21 (Rule 21), tariff rule 16 (Rule 16), the California Renewable Energy Small Tariff (CREST) program, and the net energy metering (NEM) program.[1]

SCE filed a demurrer on the ground that California's Public Utilities Commission (PUC) had exclusive jurisdiction to resolve the dispute and, therefore, the superior court lacked jurisdiction to hear Davis’s claims. At issue on appeal is the potential conflict between Public Utilities Code section 1759, [2] which limits jurisdiction to review an order of the PUC to the Court of Appeal and the Supreme Court, and section 2106, which grants jurisdiction to the superior court to hear actions for damages against a public utility that violates California law. The trial court sustained SCE’s demurrer without leave to amend, entered judgment against Davis, and dismissed the case without prejudice.[3]

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We conclude that the trial court correctly held that the PUC had exclusive jurisdiction over Davis’s claims under our Supreme Court’s holding in San Diego Gas & Electric Co. v. Superior Court (1996) 13 Cal.4th 893, 917-918 [55 Cal.Rptr.2d 724, 920 P.2d 669] (Covalt)[4] because adjudication of Davis’s claims would “‘hinder or frustrate the commission’s declared supervisory and regulatory policies’” with respect to interconnection of solar generating facilities under Rule 21, Rule 16 and the CREST and NEM programs.

While Davis’s remedies before the PUC may be more limited than those available in the trial court, to the extent Davis has viable damage claims following the PUC’s adjudication of his administrative complaints currently pending before the PUC, those claims will only become ripe for filing in the trial court once the PUC reaches a final decision. (See Schell v. Southern Cal. Edison Co. (1988) 204 Cal.App.3d 1039, 1047 [251 Cal.Rptr. 667].)

We affirm.

FACTUAL AND PROCEDURAL BACKGROUND[5]

A. SCE’s Tariffs Governing Solar Generating Facilities[6]

1. SCE’s Tariff Rule 21

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All residential solar generating facilities seeking to interconnect to SCE’s electricity grid must comply with Rule 21.[7] Rule 21 governs all aspects of interconnection, including the interconnection application submission process, the process for reviewing interconnection applications, the assignment of a generator’s position in the interconnection queue, the engineering review details, the cost responsibilities of the generators and SCE, and the design and operation requirements for the generating facility. Rule 21 applies both to solar generators that intend to sell power to SCE under the CREST program and to solar generators that intend to use their generation to offset their own electricity usage under the NEM program.

Rule 21 provides deadlines for the interconnection approval process. A threshold determination must be made as to whether the project is eligible for the “fast track.” Under section E.2.b.i, Rule 21 provides that “[n]on-Exporting and Net Energy Metered [(NEM)] Generating Facilities are eligible for Fast Track evaluation regardless of the Gross Nameplate Rating of the proposed Generating Facility.” For an “Exporting Generating Facility, ” fast track is available under certain conditions set forth in section E.2.b.i. Section F.1.b provides for a “Fast Track Review” for projects “that do not require Detailed Study.”

Rule 21 provides deadlines for (1) determination of whether an application is complete, (2) completion of an initial engineering review once the application is complete, and (3) completion of SCE’s review of the application. We discuss these deadlines in more detail below.

Rule 21 provides in section K.1 for resolution of disputes: “In addition to the informal procedures for timeline-related disputes set out in Section F.1.d, the following procedures will apply for disputes arising from this Rule: [¶]... [¶] The Commission shall have initial jurisdiction to interpret, add, delete or modify any provision of this Rule or of any agreements entered into between Distribution Provider and Applicant or Producer to implement this tariff... and to resolve disputes regarding Distribution Provider’s [SCE’s] performance of its obligations under Commission-jurisdictional tariffs, the applicable agreements, and requirements related to the interconnection of Applicant’s or Producer’s Generating Facility or Interconnection Facilities pursuant to this Rule.” Section K.2.c provides procedures for parties to resolve disputes, including through mediation, and further, “[a]t any time, either Party may file a formal complaint before the Commission....”

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2. The CREST Solar Generation Program

Section 399.20, subdivision (a), declares the “intent of the Legislature to encourage electrical generation from eligible renewable energy resources.” SCE filed the CREST program with the PUC pursuant to subdivision (c), which requires utilities, including SCE, to file with the PUC a standard tariff providing for the purchase of renewable energy from electric generating facilities. The PUC has approved the CREST program.

To be eligible for CREST, an SCE customer must own and operate an eligible solar generating facility that “[h]as an effective capacity of not more than 1.5 MW [megawatts] and is located on the premises owned or under the control of the customer.” Under section 399.20, subdivision (f), SCE was required to make CREST available to solar generating facilities “on a first-come-first-served basis, ” assigning each generating facility a queue position based on the date it entered into a power purchase agreement with SCE. SCE was required to keep CREST open for eligible generators until SCE met its proportionate share of a statewide cap of 750 megawatts. Effective July 24, 2013, SCE met its obligation to purchase the required amount of eligible generation under CREST, and the CREST program closed to new customers.

3. The NEM Solar Generation Program

SCE established the NEM program pursuant to section 2827. NEM allows eligible customers who install renewable generation at their homes or businesses to offset their consumption of electricity by the amount of electricity they generate. (§ 2827, subd. (b)(6).) Section 2827 also provides for “‘[n]et surplus electricity compensation’” to a customer where the customer produces more power than it consumes over the course of a year. (Id., subd. (b)(9).) Rule 21 provides for expedited procedures for NEM generators seeking to interconnect to SCE’s electricity grid.

4. California Solar Initiative Program (CSI)

The PUC oversees the CSI program, which provides cash incentives to utility customers who install solar generating systems for their homes and other properties. In order to be eligible for CSI incentives, the solar generating system needs to be “sized” so that the electricity generated by the system offsets part or all of the customer’s electrical needs.

B. Davis’s Applications To Interconnect His Solar Generating Systems

Davis alleges he is a residential customer of SCE. SCE is a public utility subject to regulation by the PUC (Cal. Const., art. XII, § 1; Pub. Util. Code,

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§ 201 et seq.). In 2012 Davis proposed to install solar generating systems on residential properties he owned in San Bernardino County. Davis submitted 20 applications, including for rental properties at 65911 29 Palms Highway (eight units), 60215 and 60219 Alta Loma (four units), 6804 Park Boulevard (five units), 6807 Park Boulevard, and 6815 Park Boulevard. Davis also proposed to increase the size of the solar generator at his home in Joshua Tree from six to 18 kilowatts (kW).

Davis planned to interconnect the solar systems on his properties with SCE’s electricity grid and to sell his surplus electricity to SCE in accordance with “any of the several tariffs” available for the sale of excess electricity. As we discuss below, Davis initially submitted his applications under the CREST tariff program. When those applications were not approved, he submitted similar applications under the NEM program.

C. Davis’s Complaint for Damages

Davis filed this action on November 20, 2013. All of the causes of action arise out of Davis’s attempt to interconnect solar generating systems on his properties to the SCE electricity grid. In his complaint, Davis alleges that SCE breached its duties owed to him pursuant to Rule 21, Rule 16, and CREST. Davis contends the court has jurisdiction to enforce these orders pursuant to section 2106, which provides that a public utility is liable for damages resulting from its unlawful acts or omissions under state law and that a person may bring “[a]n action to recover for such loss, damage, or injury... in any court of competent jurisdiction....”

1. First Cause of Action for Deceit Relating to NEM Program

The complaint’s first cause of action alleges deceit in violation of Civil Code section 1710.2. Davis alleges that on April 20, 2012 the NEM Manager of SCE, Melissa Patrick, represented to him that “SCE has a procedure for reviewing all NEM residential applications for appropriate sizing, ” but this statement was not true. Davis alleges he relied on this representation by building solar generators that “can not be used.”

As we discuss below, while this allegation is phrased as “deceit, ” it tracks the allegations in the second complaint he filed with the PUC in November 2013 in which he alleges that some of his solar projects were not approved because they were too large and, as to others, he was required to reduce the size to obtain CSI incentive funding. Davis alleges he was damaged by the loss of use of some solar generators and the delay in approval of other generators.

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2. Second Through Fourth Causes of Action Alleging Violation of NEM Program Deadlines

Davis’s second through fourth causes of action allege SCE’s failure to comply with Rule 21’s deadlines for processing NEM applications. Davis alleges that by the time his solar applications were approved, the solar systems had been in place and ready to turn on for over a year. He also alleges that at the time of filing the complaint, some of his solar applications had not been approved.

a. Davis’s NEM Applications

Davis initially applied to connect his solar generating systems under the CREST program, which we discuss below with respect to the sixth through eighth causes of action. When those applications were not approved, Davis proceeded to apply for approval under the NEM program. From April 4, 2012, to September 25, 2012, Davis submitted 20 applications to install solar systems for his home and rental properties under the NEM program. Davis submitted two sets of applications. One group of applications proposed to install for each house or unit 30 solar panels and one 5 kW inverter. The 5 kW units were proposed for the following properties: 6804 Park Boulevard (five units), 6807 Park Boulevard, 6815 Park Boulevard, and 60215 and 60219 Alta Loma (four units).

Davis also submitted applications for 10 kW projects for the eight rental units at his 65911 29 Palms Highway property. These projects included two 5 kW inverters and associated solar panels. Davis also proposed to increase the size of the solar generator on his home from 6 kW to 18 kW.

Between July 18, 2012, and October 12, 2012, SCE approved and interconnected all the proposed 5 kW systems. Davis alleges that “SCE expeditiously interconnected each project within 30 days ...


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