Utility Reform Network v. Public Utilities Commission

In 2012, the California Public Utilities Commission (CPUC) approved an application by Pacific Gas and Electric Company (PG&E) to purchase a natural gas-fired power plant in Oakley, California. The administrative law judge in the proceeding had recommended denying the application because she found there was insufficient evidence of “a specific, unique reliability need” for the project. In doing so, she rejected PG&E’s reliance on hearsay evidence, including statements made by the California Independent System Operator (CAISO) regarding the need for flexible generating capacity to meet the state’s renewable energy targets. (CAISO had elected not to become a party to the proceeding, so the statements could not be cross examined.) CPUC instead adopted a proposed decision that relied on such statements as evidence of the potential for a reliability risk as the state moved towards meeting the 33% renewable portfolio standard by 2020. On appeal of CPUC’s decision, the California Court of Appeal annulled the approval, finding a lack of substantial evidence that the project was needed “to meet a specific, unique reliability risk.” The court said that uncorroborated hearsay evidence, while admissible, could not be the sole support for a finding of disputed fact.