Since 1911, the California Constitution has given the California Public Utilities Commission (CPUC or “the Commission”) plenary authority over the matters it regulates. The Commission, one of the most powerful agencies in California, regulates more than USD50 billion annually of public utility services in the energy, transportation, telecommunications, and water industries.

Specifically, the CPUC regulates investor-owned electric, natural gas, and water utilities, railroads, rail transit systems, passenger carriers (limousines, airport shuttles, charter and scheduled bus operators), transportation network companies (Uber and Lyft), autonomous vehicles, and telephone communications and broadband markets. Cities, counties, or other public entities may not regulate matters over which the legislature has granted regulatory powers to the CPUC. If a charter city regulation and a CPUC order conflict, the latter prevails.

California courts have held that the CPUC is “not an ordinary administrative agency, but a constitutional body with broad legislative and judicial powers”. In addition, the CPUC has comprehensive regulatory authority under the Public Utilities Code to “do all things… which are necessary and convenient”. The Commission’s jurisdiction and regulatory control over public utilities is liberally construed by the courts.

In a recent case (Center for Biological Diversity v Public Utilities Commission), the Supreme Court has, however, circumscribed the deference owed to the CPUC’s interpretation of the Public Utilities Code. The courts should no longer use the highly deferential “Greyhound” approach for the agency’s interpretation of statutory provisions. Following the deregulation of the energy and utilities markets, the legislature has changed the statutory rules for challenges to CPUC decisions. They are now reviewed under standards akin to those applied to other administrative agencies under general administrative law principles.

Specifically, when it comes to the question of whether the CPUC has acted in a manner consistent with the statute it purports to implement, the court does not automatically defer to the agency’s (in this case the CPUC’s) interpretation of the statute. While the court may consider the CPUC’s determination, interpretation of the statute is an issue for the court, exercising its independent review.

Judicial review of decisions by the CPUC is proscribed by California statute. Upon the Commission’s issuance of a decision, judicial review of that decision requires that parties seeking to challenge it appear at hearings, and first raise objections to the Commission directly (called “exhaustion of administrative remedies”). Once administrative remedies are exhausted, if the party is still aggrieved, it may challenge the Commission’s decision at the appellate level. While the process can differ depending on rules or statutes governing other public agencies and the particular statutory scheme under which they operate, judicial review of CPUC decisions is circumscribed by statute, as detailed more fully in 1.2 Forum for Judicial Review, 5.1 Legislative or Contractual Limits on Judicial Review, and 10. Grounds.

Pursuant to the California Public Utilities Code, challenges to CPUC orders or decisions may only be heard by the Court of Appeal, and challenges may only be made by a petition for writ of review in the Court of Appeal. While the degree of deference has been clarified, as discussed in 1.1 General Rules or Specific Regimes?, these deferential rules do not permit challenge in a Superior Court forum; this deference arises from the fact that the Commission is not an ordinary administrative agency, but a constitutional body with broad legislative and judicial powers.

The nature of a Commission decision being challenged in the Court of Appeal determines its susceptibility to challenge by an aggrieved party. The most fruitful ground for appeal is that the Commission has not followed its own rules of practice and procedure. The new Supreme Court authority limiting deference to the CPUC’s interpretation of statute may give challenges to PUC decisions based on statutory interpretational issues more traction. Additional detail is provided in 10. Grounds.

In California, a statute may be challenged on the grounds that it is unconstitutional or void under the state or federal constitution. If it is a facial challenge, then the challenger must generally show that there is no possible scenario under which the statute may lawfully apply. Alternatively, a challenger may argue that the statute is unconstitutional as applied, in which case the challenger must prove a constitutional violation under the facts of the particular case. Under certain circumstances, there are other procedural hurdles to challenging a statute “as applied”. For example, if the statute is claimed to effect a taking, challengers are often first required to apply for an exception with the regulatory agency if an administrative proceeding is available.

Statutes may also be challenged if they conflict with federal law (ie, if federal regulation pre-empts the field). Alternatively, if the challenge is not constitutional, or is based on federal comity principles, a challenger may use a Code of Civil Procedure Section 1085 writ proceeding to challenge the legislation.

Parties may also challenge secondary legislation, or regulations adopted by agencies, on the grounds that they violate constitutional or statutory limits, or that they are vague, and/or that they exceed the agencies’ mandate. The courts will generally defer to agency interpretations of their own regulations; but they will not do so if the statutory and regulatory language is clear, and raises only an issue of law.

It is possible, though rare, for an affected person to challenge a CPUC decision that only affects them, as opposed to all public utility customers. This situation would arise where the CPUC has issued a decision adjudicating an individual person’s complaint again a public utility.

An individual person may file a formal complaint with the Commission against a public utility alleging that the public utility has violated the law, or an order or rule of the Commission. Individual complaints are not allowed on the reasonableness of rates or charges of a public utility. After an order or decision has been made, parties to a complaint (including an individual) have the right to file applications for rehearing if they disagree with the Commission’s adjudication of the complaint.

Generally, the Commission does not adjudicate contractual disputes between regulated utilities and third parties. The Commission lacks the jurisdiction to award contract damages, and complaints involving contracts are typically left for the courts to decide.

The CPUC has a general policy against issuing advisory decisions, which are rarely issued; this policy is based on the need to “conserve scarce resources”.  Advisory opinions are only issued in extraordinary circumstances where “widespread public interest or another governmental agency would benefit from a timely expression of the Commission’s views”. In contrast, courts will not issue advisory opinions, so if a challenge does not present a justiciable case or controversy affecting the rights of the parties before it, a court will not issue a decision.

The Commission, as a state agency, issues government decisions and orders. Thus, Commission decisions when challenged in court are reviewed as government actions, and are not considered commercial or non-governmental.

The Commission’s jurisdiction, as a constitutionally created agency, is governed by Article XII of the California Constitution and laws passed by the California Legislature, primarily found in the Public Utilities Code. The California Constitution grants the Legislature plenary power to confer additional authority and jurisdiction to the Commission, and to establish the manner and scope of review of Commission action in a court of record. All laws enacted by the Legislature related to the Commission must be consistent with the authority granted in Article XII of the California Constitution.

Claimants bringing administrative law challenges to CPUC decisions are required to have been directly affected by the decision. There are two types of administrative law challenges at the CPUC: a petition for modification, and an application for rehearing. Petitions for modification seek to amend or modify the decision being challenged on policy grounds or due to changed factual circumstances. Applications for rehearing seek rehearing and revision of the decision due to error in fact or law, or both. Neither type of challenge stays the effect of the CPUC decision; for a stay of the decision, a separate motion must be made.

The CPUC allows a claimant who was not a party to the underlying proceeding that led to the decision, to file a petition for modification of the decision. That petitioner must state how they are affected by the decision, and why they did not participate in the proceeding earlier. A petition for modification requests a change to a prior Commission decision for policy reasons or changed factual circumstance; this administrative challenge does not allow for an argument that the Commission decision erred in either fact or law.

Administrative challenges arguing an error in fact or law, or an application for rehearing, can only be made by parties to the underlying proceeding or a claimant who has been directly affected by the decision – such as a stockholder or bondholder, or a party monetarily interested in the public utility affected.

Any person may become a party to a proceeding by meeting the CPUC’s requirements for party status. A “person” is defined as a natural person or organisation. Accordingly, a charity or NGO may become a party to a proceeding by:

• filing an application (other than an application for rehearing), petition, or complaint;
• filing –
1. a protest or response to an application (other than an application for rehearing) or petition; or
2. comments in response to an order instituting rulemaking;
• making an oral motion to become a party at a prehearing conference or hearing; or
• filing a motion to become a party.

If making an oral motion or filing a motion for party status, a person must:

• fully disclose the persons or entities on whose behalf the filing, appearance or motion is made, and the interest of such persons or entities in the proceeding; and
• state the factual and legal contentions that the person intends to make, and show that the contentions will be reasonably pertinent to the issues already presented.

If a charity or NGO has party status in a proceeding, it automatically has standing to file a petition for modification. Otherwise, a non-party must establish a basis for standing in the petition for modification by including a specific statement on how it is affected by the decision, and why it did not participate in the proceeding earlier.

Similarly, if a charity or NGO has party status in a proceeding, it automatically has standing to apply for a rehearing of the decision. Standing is also afforded to a stockholder, bondholder, or other party monetarily interested in the public utility affected by the decision.

The CPUC administers an Intervenor Compensation Program which enables eligible entities representing residential or small commercial utility customers to request compensation for reasonable fees and costs incurred for making a substantial contribution to formal Commission proceedings. The compensation is funded by ratepayers of the affected investor-owned utility. An intervenor that intends to seek compensation must file a Notice of Intent to Claim Compensation (NOI), generally within 30 days after a prehearing conference is held, identifying the issues on which they intend to participate and providing an estimated budget for each issue. The NOI must also demonstrate eligibility, including “customer” or “eligible local government entity” status. A claim for an award of compensation may be filed after the issuance of a decision that resolves an issue on which the intervenor believes it made a substantial contribution, but no later than 60 days after the issuance of the final decision closing the proceeding.

At the administrative level, a party must participate in the hearings and raise objections itself to challenge a decision by the Commission, with an application for rehearing alleging error in law or fact. At the appellate level, it is not possible to join a challenge to a CPUC decision, as joinder is not generally recognised. An aggrieved party must appeal on its own.

Parties can play various roles in underlying CPUC proceedings. Once granted “party status” in a formal CPUC proceeding, a party can make arguments based in fact and law, and seek the introduction of relevant evidence.

The CPUC’s formal discovery rules do not require automatic disclosure of information or documents in a formal proceeding. Instead, any party may obtain discovery on any non-privileged matter relevant to the proceeding. Parties may also request that the assigned administrative law judge (ALJ) establish a process for distributing discovery requests and non-confidential responses to the proceeding’s service list.

Discovery at the CPUC is typically conducted through “data requests” – questions or requests for data, information or documents sent electronically or in writing. Parties may request copies of data requests and responses propounded by and between other parties in the same proceeding, and may also request to receive such materials on an ongoing basis.

There is no formal rule governing response times, although the customary deadline is ten business days. The requesting party may seek a shorter deadline, or indicate whether a longer one is acceptable. If the responding party considers any information proprietary or confidential, the requesting party may need to sign a non-disclosure agreement before obtaining access.

Discovery disputes should be presented to the assigned ALJ only after good‑faith efforts at resolution have been exhausted. The CPUC’s informal discovery guidelines provide that parties are expected to conduct discovery co-operatively and to resolve disagreements informally whenever possible. Where issues arise regarding the adequacy, scope or timing of a data request or response, either party may request a meet‑and‑confer. This informal step is required before filing any motion to compel or motion for protective order under Rule 11.3(a).

The CPUC and its staff have broad authority to obtain information from public utilities to ensure that they have all the relevant information necessary to render a reasoned decision. Pursuant to that authority, an assigned ALJ or commissioner may order the production of additional information necessary to ensure the CPUC has all the relevant information to resolve issues in a hearing or proceeding.

Parties may also request the CPUC to issue a subpoena compelling a non-party witness to testify or produce documents under its control. The Commission or any party in an investigation or hearing has statutory authority to “compel the attendance of witnesses and the production of books, waybills, documents, papers, and accounts”.

Likewise, when reviewing an advice letter, the industry division may request additional information from a utility before issuing its disposition.

CPUC proceedings do not usually have live evidence; rather, prepared direct and rebuttal testimony is offered, with subsequent cross-examination of witnesses to build the record for the CPUC’s decision. All hearings, investigations and proceedings conducted by the Commission are governed by the Public Utilities Code and the CPUC Rules of Practice and Procedure.

The record is developed during evidentiary hearings with the assigned Commissioner or the assigned ALJ as the presiding officer, depending on the type of proceeding: adjudicatory, rate-setting, quasi-legislative, or catastrophic wildfire. In hearings, the technical rules of evidence are not strictly applied. Prepared direct testimony and exhibits may be entered into evidence without direct examination or cross examination.

The Commission may also take official notice of matters that may be judicially noticed, and the presiding hearing officer may ask for additional evidence to inform the Commission’s consideration. The Commission will issue a final decision based on its consideration of the law and the evidence in the record.

While pre-action correspondence is not required before a challenge may be filed in the Court of Appeal seeking review of a Commission decision, the Commission adoption of a decision on the rehearing application is usually a necessary prerequisite. Additionally, a party may file an application for rehearing only after an order or decision has been made by the Commission. However, if the Commission does not act on the application for rehearing within 60 days of filing, the applicant can deem the application “denied” and seek judicial review.

Administrative remedies must be exhausted before a challenge to a CPUC decision can be made in the courts. For the CPUC, the Petition for Modification and the Application for Rehearing are the two primary, distinct procedural tools for challenging a CPUC Decision or Resolution, each serving a different purpose and affecting appellate rights differently.

Petition for Modification

A Petition for Modification seeks changes to a CPUC decision or resolution based on new or changed facts or circumstances. A Petition for Modification is not an opportunity to reargue or relitigate issues already considered and decided, nor does filing a Petition for Modification preserve a party’s right to judicial review.

Application for Rehearing

An Application for Rehearing requests that the CPUC reconsider a decision or resolution because it erred, and is necessary to preserve appellate rights.

A party must exhaust the CPUC’s Application for Rehearing process before filing a petition for writ of review of a CPUC decision or resolution. The purpose of an Application for Rehearing is to let the CPUC know there is an error in fact or an error in law in a decision or resolution.

Filing an Application for Rehearing does not excuse compliance with a CPUC decision or resolution. However, if the application is filed at least ten days before the order’s effective date, and the CPUC does not act on it before that date, the order is suspended for up to 60 days after the application is filed.

Extra Step Required to Challenge an Advice Letter Disposition

A party challenging a CPUC industry division’s disposition of a utility advice letter must request Commission review within ten days of the disposition’s issuance. The request must be served on the utility, all persons submitting protests or responses, and any third party whose name and interest appear on the advice letter. The request must also explain the requester’s entitlement to seek review, and the specific grounds for alleging that the disposition is unlawful or erroneous.

After the CPUC adopts a formal resolution addressing the request, a party may challenge that resolution by filing an Application for Rehearing with the CPUC’s docket office.

Exception for Challenges Under the Public Records Act

The Court of Appeal has ruled that the exhaustion requirement does not apply to challenges of a CPUC decision denying a Public Records Act request.

Different time limits apply to the two types of challenges to CPUC decisions at the CPUC or administrative level.

Petition for Modification

A Petition for Modification is timely if filed within one year of the subject decision’s or resolution’s effective date. If over one year has passed since the effective date, the petition must explain why it was not submitted within the one-year timeframe, and the Commission may deny the petition as untimely.

Application for Rehearing

An Application for Rehearing must generally be filed within 30 days of the issuance of a CPUC decision or resolution. However, for certain decisions and resolutions, the deadline is shortened to ten days, including those issued under:

• Public Utilities Code Section 816 (security transactions);
• Public Utilities Code Section 851 (transfer or encumbrance of utility property);
• Public Utilities Code Section 849 (water rate relief bonds); and
• Public Utilities Code Section 850 (catastrophic wildfire and ratepayer protection financing).

A party that does not file a timely Application for Rehearing waives its right to seek judicial review.

Writ Petition

• If the CPUC denies an Application for Rehearing, a writ petition to the Courts of Appeal must be filed within 30 days of the denial.
• If the CPUC grants an Application for Rehearing and issues a decision on rehearing, a writ petition must be filed within 30 days of that decision on rehearing.
• If the CPUC does not act on the application within 60 days, it is deemed denied, and the party may seek judicial review.

Petition for Modification

A claimant filing a Petition for Modification is required to explain why the proposed change to the decision is justified, and must include the specific language to change in the decision. The claimant must also support its allegations of fact with citations to record evidence or information that may be judicially noticed. If new or changed facts are alleged, the claimant must attach an affidavit or declaration supporting the new or changed facts.

Application for Rehearing

A claimant filing an Application for Rehearing must explain the error in fact or the error in law, and if an issue is not included in the Application for Rehearing, the party loses the right to appeal that issue.

Public Utilities Code Section 1757(a) defines the grounds for challenging decisions in complaint or enforcement proceedings, as well as ratemaking or licensing decisions related to a specific application. For ratemaking or licensing decisions concerning water corporations, the applicable grounds are set by Public Utilities Code Section 1757.1(a).

An Application for Rehearing may also include a request for oral argument, which must state how oral argument will help the CPUC to address the application, and show that significant issues are raised by the application. Any party responding to an Application for Rehearing may also request oral argument, or respond to the applicant’s request for oral argument.

Formal CPUC Proceedings

Evidence is introduced during the evidentiary hearing stage of a formal CPUC proceeding. This stage entails the production of evidence through prepared written testimony with supporting exhibits, or a stipulated agreement between parties. The technical rules of evidence – whether statutory, common law, or adopted by courts – do not control CPUC hearings; however, parties must still be afforded the ability to meaningfully engage in the proceeding.

After evidentiary hearings are concluded and evidence has been entered into the record, parties must submit opening and reply briefs; statements of fact require citations to record evidence. With the filing of reply briefs, the proceeding is considered submitted, after which time no additional evidence or argument may be introduced.

Advice Letter Process

Unlike formal CPUC proceedings, the advice letter process does not generally allow intervening parties to introduce evidence. However, evidentiary hearings may be requested in a protest to an advice letter; the request for hearings must specify material disputed facts and explain why hearings are needed.

Additionally, legal arguments against an advice letter are limited to the following six specific grounds:

• the advice letter was not properly served or noticed;
• the requested relief conflicts with a Commission decision or law, or is not permitted by the Commission decision relied upon by the utility;
• there are errors or omissions in the data, analysis, or calculations in the advice letter;
• the requested relief is being litigated in another proceeding before the Commission;
• the requested relief should be the subject of an evidentiary hearing, as opposed to an advice letter request; or
• the requested relief is “unjust, unreasonable or discriminatory”.

Proposed Decisions and Draft Resolutions

A proposed decision is supposed to be issued 90 days after the proceeding’s submission, or within 60 days in an adjudicatory proceeding. However, in practice, the time between submission and service of a proposed decision may be longer. The timing of a draft resolution depends on whether the advice letter was protested, and whether the reviewing industry division required additional information.

Once a proposed decision or resolution is issued, parties may file comments within 20 days of its service, focusing on factual, legal, or technical errors. Comments need to cite to the record or applicable law.

Parties may reply to comments five days after the deadline for filing opening comments, and are supposed to only address misrepresentations of law or fact, or record evidence in other parties’ comments.

Preserving Legal Arguments for Appeal

The comment period provides a party’s first opportunity to raise legal arguments challenging a decision or resolution. However, a party is not required to do so at this stage to preserve an argument for appeal.

Instead, legal arguments challenging a final CPUC decision or resolution must be raised in an Application for Rehearing. Failure to do so constitutes a waiver of the party’s right to raise the argument in a writ petition before the courts.

Writ Petition

Parties are barred from introducing new or additional evidence when seeking judicial review of a CPUC decision or resolution. Likewise, parties are barred from raising any legal argument not set forth in Public Utilities Code Section 1757(a)(1)-(6), and not raised in the Application for Rehearing.

Petition for Modification

A claim issued to the CPUC as a Petition for Modification must be filed and served within one year of the final decision or resolution’s effective date; any petition submitted after that deadline must explain why it was not filed earlier. If the CPUC finds the explanation inadequate, it may summarily dismiss the petition. Additionally, for a Petition for Modification to be granted, the Commission must agree that either changed circumstances or changed policy warrant the requested modifications to the underlying decision.

Application for Rehearing

A claim issued to the CPUC as an Application for Rehearing must also be filed in good time (within 30 days, or within ten days for matters relating to security transactions and the transfer or encumbrance of utility property). After an Application for Rehearing is filed, the Commission will review the claims asserted, and determine whether the applicant has demonstrated legal or factual error.

The CPUC can expedite certain applications under defined statutory and procedural conditions. In general, expedited treatment is reserved for cases with urgent public interest concerns (eg, safety emergencies or significant ratepayer impacts), or where state law mandates accelerated timelines.

Catastrophic Wildfire Claims

An application seeking reasonableness review of costs and expenses related to a catastrophic wildfire ignited on or after 12 July 2019 must be resolved no later than 12 months after the filing date.

The CPUC must issue a decision approving or denying an application to use securitisation to finance costs and expenses related to catastrophic wildfires within 180 days of the application. The application must show that the request relates to costs and expenses that the Commission has already deemed reasonable, pursuant to Public Utilities Code Sections 451.1 and 451.2.

Other Requests for Expedited Schedule in an Application Proceeding

For all other applications, an expedited schedule may be requested by the applicant in its initial filing. The application title page must include “Request for Expedited Schedule” below the title, and provide an attachment, not to exceed three pages, titled “Request for Expedited Schedule”, describing why expedited treatment is requested. The assigned Commissioner may grant the request for expedited treatment if the attachment demonstrates the necessary facts. The test for expedition is whether the matter involves either an imminent threat to public safety, or the need for prompt resolution of a financial matter to avoid ratepayer harm.

The task of the court in reviewing a CPUC decision is defined by statute, and the scope of appellate review is limited. Judicial review must not extend further than to determine, on the basis of the entire proceeding record, whether the Commission:

• “acted without, or in excess of, its powers or jurisdiction” (however, this ground does not apply to ratemaking or licensing decisions of specific application addressed solely to water corporations; in cases relating solely to water corporations, review must not be extended further than to determine whether the Commission has “regularly pursued its authority, or violates constitutional rights”);
• failed to proceed “in the manner required by law”;
• rendered a decision unsupported by the findings;
• made findings unsupported by substantial evidence;
• rendered a decision that “was procured by fraud or was an abuse of discretion”; or
• issued an order or decision that violates the petitioner’s state or federal constitutional rights.

The reviewing court does not conduct a trial de novo, nor does it weigh evidence or exercise independent judgment on the evidence. The Commission’s findings of fact are not open to attack for insufficiency if they are supported by any reasonable construction of the evidence.

Both the United States Constitution and the California State Constitution provide grounds to bring a challenge to a CPUC decision. Such challenge can be brought on the basis that the decision is inconsistent with either or both written constitutions, even though the CPUC was created through a provision of the California Constitution. CPUC decisions are subject to any constitutional challenge that could be asserted in court.

It is possible to challenge the lawfulness of a CPUC decision or resolution on the grounds that the CPUC did not follow the relevant procedure for that decision; indeed, failure to follow its own rules or failure “to proceed in the manner required by law” can present a strong case for appeal, as courts tend to be confident in their abilities to decide matters of procedure. Courts have found that this legal basis includes the Commission’s violation of its own Rules of Practice and Procedure, as well as a violation of a specific statute.

It is possible to bring a challenge that the decision-maker made an error of fact, and this is one of the two possible grounds for an Application for Rehearing at the agency level. At the appellate level, as a general rule, courts have held that the CPUC’s findings of fact are final and not subject to judicial review. Therefore, to challenge a decision on the grounds that the decision-maker made an error of fact, a party must show that the error undermines the validity of the decision under criteria set forth in the statute, and that the error was prejudicial.

A challenge may also be brought if the decision or resolution is not supported by the Commission’s findings. Additionally, a challenge may be made if the findings in the CPUC decision are not supported by substantial evidence when viewed in light of the whole record.

A party may challenge the lawfulness of a CPUC decision on the grounds that the decision-maker abdicated or fettered their discretion. A challenge can also be brought if the Commission’s order or decision was procured by fraud, or constituted an abuse of discretion. A decision-maker’s prejudicial abuse of discretion may result in the annulment of the Commission’s decision.

When reviewing the decision-maker’s exercise of discretion, the court’s inquiry is limited to whether the decision was arbitrary, capricious, or entirely unsupported by evidence. A decision based solely on the decision-maker’s will or desire, and not supported by substantial or reasonable grounds, is considered arbitrary and capricious.

It is possible to bring a challenge on the basis that the decision-maker was biased. The Commission has adopted procedures regarding the disqualification of commissioners and ALJs due to bias or prejudice. A party may file a motion for disqualification for cause to disqualify the assigned ALJ or a commissioner if it believes actions were taken during the proceeding that prove bias or prejudice. A motion can also be brought if actions were taken outside the public record of a proceeding showing any commitment to provide relief to a party to the proceeding.

In adjudicatory proceedings, parties may request a one‑time, automatic reassignment of the assigned ALJ through a peremptory challenge. To do so, the party must file and serve a motion on all parties, the chief ALJ, and the commission president within ten days of the assignment. This motion must be supported by a declaration under penalty of perjury stating that the party cannot receive a fair or expeditious hearing before the assigned ALJ, and that no prior peremptory challenge has been filed.

In ratesetting proceedings, parties and certain prospective parties may also make a single request for reassignment, though no more than two such reassignments are allowed in any proceeding.

The chief ALJ must either reassign the case or, after consulting with the commission president, issue a ruling explaining why the motion does not meet Rule 9.2’s requirements.

Notwithstanding those peremptory challenges, after a final CPUC decision or resolution is issued, a party may bring a challenge on the basis of unequal treatment. California law does not expressly include “unequal treatment” as a ground for judicial review of CPUC decisions, but the law does permit legal challenge if the CPUC order or decision violates the petitioner’s rights under the United States Constitution or the California Constitution. Therefore, if the unequal treatment infringes upon the petitioner’s due process rights, a challenge could be brought on that basis.

Additionally, a challenge may be raised if the CPUC decision authorises a rate, charge, service or facility that is unduly prejudicial or discriminatory. Public Utilities Code Section 453 prohibits public utilities from granting preferential treatment or advantages to any person or corporation regarding rates, charges, service or facilities, or from subjecting anyone to prejudice or disadvantage. Thus, if a CPUC decision or resolution violates Public Utilities Code Section 453, a challenge could be brought under Public Utilities Code Section 1757(a)(2).

The CPUC is not a signatory to the European Convention on Human Rights. Accordingly, it is not possible to bring a claim on human rights grounds.

A party may challenge a Commission decision imposing a fine or penalty under the excessive fine provision of either the United States or the California Constitutions. The “touchstone of the constitutional inquiry under the Excessive Fines Clause is the principle of proportionality”. The Commission recognises the principle of proportionality, and has adopted factors based on California Supreme Court case law. In determining whether a penalty or fine is reasonable, the Commission considers the severity of the offence, the conduct of the utility, the financial resources of the utility, Commission precedents, and the totality of the circumstances in furtherance of the public interest.

The grounds for legal challenges to a CPUC decision or order are limited to those specified in Public Utilities Code Section 1757, as detailed above.

There are no categories of CPUC decisions that can never be challenged. In a proceeding to recover costs and expense related to a catastrophic wildfire pursuant to Public Utilities Code Section 850.1, the Commission may issue a financing order authorising the issuance of recovery bonds backed by a fixed customer charge collected over the life of the bonds. A financing order may be challenged before the CPUC in an Application for Rehearing and, if denied, may be appealed in the Court of Appeal or the Supreme Court. However, once those remedies are exhausted, or the time has elapsed for an Application for Rehearing, the Commission is not permitted to rescind, alter or amend the financing order.

Timing

After a timely Petition for Modification or Application for Rehearing is filed, the CPUC is required to issue a decision denying or granting the requested relief. Except in limited circumstances, there is no specific timeframe for the CPUC to issue its decision. The exceptions are as follows:

• Application for Rehearing regarding a CPUC Order under Public Utilities Code Sections 849 or 850 – the CPUC must issue a decision within 210 days of filing; and
• Application for Rehearing Concerning the Disposition of a Protest to a General Order 131-D Notice of Proposed Construction – the CPUC must issue a decision within 90 days of filing.

If the CPUC does not issue a decision on an Application for Rehearing within 60 days after filing, the applicant may consider the application denied for the purpose of filing a petition for writ of review.

Grounds of Defence

The CPUC may grant an Application for Rehearing “if in its judgment sufficient reason is made to appear”.

The CPUC explains its grounds for defence in its decision denying a Petition for Modification or order denying an Application for Rehearing.

A Petition for Modification will be denied if the CPUC determines the justifications for the proposed changes are insufficient, or if the petitioner fails to demonstrate new or changed facts or circumstances.

The CPUC will deny an Application for Rehearing if it finds that the application fails to demonstrate legal error, or if it determines the challenge is an attempt to relitigate policy positions or reweigh evidence.

In orders denying challenges to the adequacy of a CPUC decision or resolution’s findings, the CPUC typically asserts that it is not required to provide detailed explanations of every piece of evidence in the record. The CPUC maintains that its decisions need only include statements sufficient to allow an appellate court to understand the principles and facts upon which the decision relied.

Additionally, the CPUC often asserts its broad discretion in determining which factors are material to its decisions.

It is common for entities regulated by the Commission to request additional time to comply with a Commission decision or order. A party may seek an extension of time to comply by letter or email to the executive director, with a copy served at the same time on all parties to the proceeding and on the ALJ division. The letter must be received by the executive director at least five business days before the existing date for compliance. If granted, the party requesting the extension must promptly inform all parties to the proceeding of the extension, and must state in the opening paragraph of the document that the executive director has authorised the extension.

The Commission has authority to grant interim or emergency rate relief in certain instances to promote fairness to the utility and its customers, reduce the risk of rate shock and smooth rate impacts on customers, and preserve the financial integrity of a utility. The Commission may grant interim rate relief, subject to refund, if it determines such relief necessary to ensure continued utility service or to improve a utilities’ financial stability.

The CPUC cannot award damages for such things as personal injury, property damage, emotional distress, or loss of wages or profits. However, the CPUC can order reparations for unreasonable rates, and when a service has been paid for and not received. In addition, the CPUC’s several Citation Programs, which cover different specific regulatory programs and authorities, authorise staff to issue fines for non-compliance with state law and CPUC orders.

Public Utilities Code Section 734 provides that, in a complaint proceeding, the CPUC may order a public utility to make “due reparation” to a complainant if it finds that the utility has charged “unreasonable excessive, or discriminatory” rates in violation of Public Utilities Code Section 453.

Aside from challenging particular actions of a particular public entity, plaintiffs are entitled to challenge the enactment of legislation by the state, and a reviewing court has the power to invalidate legislation on constitutional grounds. However, grounds for doing so are limited.

A court reviewing a CPUC decision has the usual power to remand for further proceedings consistent with the appellate opinion. Where discretion is vested in the CPUC on how to act, the remand will generally mandate that the CPUC body hold further hearings consistent with the court’s decision.

If, upon review of an Application for Rehearing, the Commission finds legal error did occur, it will issue an order granting the relief necessary to correct the error. Typically, the order will correct legal error by adopting modifications to the erroneous portions of the challenged decision or resolution.

If the courts find a CPUC decision to be unlawful, the unlawful decision will be annulled and remanded to the CPUC.

The Commission does not have a specific procedural mechanism to limit or cap the litigation costs of those practising before it.

The Commission does not have the ability to award parties public interest costs.

The Commission does not have the ability to award parties wasted costs.

It is possible to appeal a judgment in a challenge to a CPUC decision. The procedure for challenging a CPUC decision is to file a petition for writ of review with the California Court of Appeal. If the petition for writ of review is denied by the Court of Appeal, an aggrieved party may appeal the judgment by filing a petition for writ of review with the California Supreme Court.

Nearly all petitions seeking review of a CPUC Decision are filed in the Court of Appeal. However, a petition may be filed with the California Supreme Court. Furthermore, challenges to a Court of Appeal order denying a petition may be appealed by filing a petition for writ of review with the California Supreme Court.

Any aggrieved party may file a petition for review; permission of the lower court is not required.

Judicial review of CPUC decisions is limited to the specific grounds set forth in Public Utilities Code Section 1757, as discussed in 10. Grounds.