CPUC Reaffirms Its Limited Jurisdiction Over Municipal Utilities - Decision Stemming from Regional Transmission Project Protects Local Control of City-Owned Utilities

by Best Best & Krieger LLP
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Today the California Public Utilities Commission (CPUC) released its final decision dismissing a complaint brought by the City of Jurupa Valley against the City of Riverside and its city-owned utility in a dispute over a regional transmission project aimed at boosting the reliability of electrical power. In its complaint, Jurupa Valley urged the CPUC to assert that it, and not Riverside, was the proper lead agency under the California Environmental Quality Act (CEQA) for the Riverside Transmission Reliability Project (Project). The commission’s final decision granted the motion to dismiss, which attorneys at Best Best & Krieger prepared for Riverside, reaffirming that the CPUC has only limited and well-defined jurisdiction over local agencies and municipally owned utilities.

The Project is a joint transmission project advanced by Riverside and Southern California Edison (SCE) consisting of a 10-mile double-circuit 230kV transmission line, two 230 kV/69 kV substations, and five new 69kV sub-transmission line segments. The Project will improve regional grid reliability and, thus, traverses Riverside and surrounding communities, including Jurupa Valley. In preparing an Environmental Impact Report (EIR) to analyze the Project’s impacts under CEQA, Riverside acted as lead agency for the entire Project, with the CPUC serving as a responsible agency for SCE’s portion of the Project.

After Riverside approved the Project and certified its EIR, Jurupa Valley filed a complaint with the CPUC alleging that the commission has exclusive jurisdiction over the Project and, as such, should serve as the sole CEQA lead agency. In response, Riverside filed a motion to dismiss arguing that the CPUC’s jurisdiction over Riverside is constitutionally and statutorily limited because Riverside is a local agency and municipal utility – not a public utility.  Riverside further asserted that, even if the CPUC had jurisdiction over Riverside, lead agency disputes must be resolved by the state Office of Planning and Research (OPR). The CPUC agreed, acknowledging that its jurisdiction over public utilities does not extend to public agencies or municipal utilities. Moreover, the decision recognizes that when CEQA lead agency disputes exist, they must be decided by OPR, not the CPUC.

Of special importance to future proceedings, this decision reaffirms a long line of previous court and CPUC decisions recognizing that the CPUC lacks jurisdiction over utilities operated by public agencies, and the CPUC’s jurisdiction can only be expanded through explicit legislative actions. This important limitation on the CPUC’s jurisdiction advances and protects local control over municipal utilities.

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