Appellate Court Rules Against Approval of Oakley Power Plant

For the second time, a California Appellate Court has ruled against PG&E and the California Public Utilities Commission to move forward with plans to build a 586-megawatt natural gas-fired power plant in Oakley.

The 1st District Court of Appeal ruled 3-0 Wednesday with three out-of-area environmental groups, who are looking to block the project and delay it through the use of court system for years, by stating the State Public Utilities Commission decision in December 2010 to approve the power plant was not supported by substantial evidence.

The courts 25-page ruling, they stated the ruling was based off “hearsay”.

“In the published portion of our opinion, we conclude the Commission’s finding of need is unsupported by substantial evidence, because it relies on uncorroborated hearsay materials the truth of which is disputed and which do not come within any exception to the hearsay rule. Under established California law, such uncorroborated hearsay evidence does not constitute substantial evidence to support an administrative agency’s finding of fact. Because the remaining evidence in the record fails to support the Commission’s finding of need, the decisions must be annulled.”

Oakley City Councilman Kevin Romick stated the City of Oakley is still committed to the project.

“We have just learned of the Judge’s decision to delay the project once again. Obviously any delay is disappointing. We don’t now the specific reasons for the delay but we have been assured by the developers that they remain fully committed to the project and the City also remains committed to the project. This is a good project for Oakley and the PG&E Customers,” said Romick.

 Tamar Sarkissian, PG&E Spokesperson, said PG&E is still reviewing the decision but explained the project is needed.

“This project is exactly the kind of flexible, efficient, new generation resource that is needed in California, and has support from the Oakley community, including from city, state, and national officials.  It will also provide valuable jobs and tax support in the region,” said Sarkaissian. “This project is exactly the kind of flexible, efficient, new generation resource that is needed in California, and has support from the Oakley community, including from city, state, and national officials.  It will also provide valuable jobs and tax support in the region.”

The power plant project is supported by local lawmakers, unions, residents and seniors.

If the plant is ever approved, Danville-based Radback Energy will build the plant and sell it to PG&E once it is up and running. PG&E had aimed to bring the plant online by 2016.

The decision:

 In 2012, Pacific Gas and Electric Company (PG&E) filed an application with the California Public Utilities Commission (the Commission) seeking approval of an agreement by which PG&E would acquire a new gas-fired power plant in Oakley California (the Oakley Project). A principal issue in the application proceedings was whether there was a need for the Oakley Project. The need was said to arise in part from California’s efforts to obtain a greater percentage of its energy from renewable sources, thus requiring additional conventional electrical generating capacity to cope with fluctuations in supply due to the intermittent nature of wind and solar power.

As evidence of this claimed need, PG&E presented a declaration from an executive of the California Independent System Operator (the CAISO) and a petition the CAISO had filed with a federal agency. Neither the CAISO executive nor the authors of the petition testified in the Commission’s proceedings. Because of their hearsay nature, the administrative law judge (ALJ) presiding over the application case ruled these materials could not be used as evidence of the need for the Oakley Project. She later issued a proposed decision recommending denial of PG&E’s application.

The Commission did not adopt the ALJ’s decision, and its decision approving PG&E’s application expressly relied on these hearsay materials in finding the Oakley Project is needed. The Utility Reform Network (TURN), Western Power Trading Forum (WPTF), and Independent Energy Producers Association (IEP), which had participated in the application proceedings, sought rehearing before the Commission. Among other arguments, they claimed the Commission had violated their substantial rights by relying on hearsay evidence the ALJ had ruled could not be used as proof of need for the Oakley Project and that the Commission’s decision was unsupported by substantial evidence. After the Commission denied their applications for rehearing, they filed petitions for writs of review under Public Utilities Code section 1756, subdivision (a).1

In the published portion of our opinion, we conclude the Commission’s finding of need is unsupported by substantial evidence, because it relies on uncorroborated hearsay materials the truth of which is disputed and which do not come within any exception to the hearsay rule. Under established California law, such uncorroborated hearsay evidence does not constitute substantial evidence to support an administrative agency’s finding of fact. Because the remaining evidence in the record fails to support the Commission’s finding of need, the decisions must be annulled.

Click here for the full 25-page Decision:
http://www.courts.ca.gov/opinions/documents/A138701.PDF