PG&E Corp. v. Public Utilities Commission (118 Cal. App. 4th 1174, 2004)

Opinion

JONES, P. J.

I. INTRODUCTION

Disputing the jurisdiction of the Public Utilities Commission (PUC or Commission) over entities other than public utilities, the parent holding companies of California’s three large investor-owned electric utilities seek to be dismissed from a pending PUC proceeding investigating actions taken by the holding companies and their utility subsidiaries during the electricity energy crisis of 2000 and 2001. The holding companies and their utility subsidiaries also challenge an interim opinion of the PUC interpreting one of the conditions imposed at the time the utilities sought approval to form holding company structures.

The challenged rulings arise out of an investigation initiated by the PUC during the height of California’s electricity energy crisis in 2001. (See Cal.P.U.C. Order Instituting Investigation, Investigation No. 01-04-002 (Apr. 3, 2001) [2001 Cal.PUC LEXIS 405] (hereafter Order Instituting Investigation).) In addition to naming the utilities as parties to the investigation, the PUC also included as parties their parent holding companies—Edison International (EIX), Sempra Energy (Sempra), and PG&E Corporation (PG&E Corporation) (collectively, the holding companies).

The PUC’s investigation relates back to a series of proceedings in the 1980’s and 1990’s in which California’s investor-owned electric utilities each sought approval to reorganize under a holding company structure, which would permit each utility to become the wholly owned subsidiary of a holding company. The PUC approved the requests of the three utilities— Southern California Edison Company (Edison), San Diego Gas & Electric Company (SDG&E), and Pacific Gas and Electric Company (PG&E Utility) (collectively, the utilities)—subject to certain conditions referred to as the holding company conditions. The holding company conditions were intended to protect ratepayers and to address the potential for abuse arising from the holding company structure.

One of the holding company conditions is the so-called first priority condition, also referred to as the capital requirements condition, which in general requires that the holding companies give first priority to the capital requirements of their utility subsidiaries as determined to be necessary to meet their obligation to serve. The investigation initiated by the PUC in 2001 sought to determine, among other things, whether the holding companies had violated the first priority condition by failing to infuse capital into their financially distressed utility subsidiaries.

Fundamentally, these seven petitions raise two issues. The threshold issue is whether the PUC has jurisdiction to enforce the holding company conditions against the holding companies. The second issue raised by these petitions concerns the PUC’s initial interpretation of the first priority condition. We have consolidated the three petitions challenging jurisdiction; we have separately consolidated the four petitions raising substantive issues; and we have granted a writ of review in each consolidated proceeding. We now order all seven cases consolidated for purposes of decision.

On the jurisdictional question, we affirm the PUC’s decisions denying the holding companies’ motions to dismiss. (Cal.P.U.C. Dec. Nos. 02-01-037 (Jan. 9, 2002) [Pacific Gas and Electric Co., 2002 Cal.PUC LEXIS 7] & 02-07-044 (July 17, 2002) [Pacific Gas and Electric Co., 2002 Cal.PUC LEXIS 430].) Under the circumstances presented here, the PUC has jurisdiction over a holding company to enforce conditions imposed by the PUC pursuant to its statutory authority to approve applications by public utilities for certain mergers, acquisitions, changes in control, or issuances of securities. (See Pub. Util. Code, §§ 701, 818, 819 & 854.) On the interpretation of the first priority condition, we conclude the issue is not yet ripe for review. (Cal.P.U.C. Dec. Nos. 02-01-039 (Jan. 9, 2002) [Pacific Gas and Electric Co., 2002 Cal.PUC LEXIS 5] & 02-07-043 (July 17, 2002) [Pacific Gas and Electric Co., 2002 Cal.PUC LEXIS 440].)

n. FACTUAL AND PROCEDURAL BACKGROUND

A. The Holding Company Decisions

1. SDG&EI

In 1985, SDG&E was the first electricity utility to apply to the PUC to reorganize under a holding company structure in order to facilitate the decision of SDG&E management to diversify its business. (Re San Diego Gas and Electric Co. (1986) 20 Cal.P.U.C.2d 660, 662 (SDG&E I).) SDG&E sought approval of its proposed reorganization under section 854, which provides that no person or corporation may acquire or control a public utility, either directly or indirectly, without first securing the authorization of the PUC. (SDG&E I, supra, 20 Cal.P.U.C.2d at p. 662.) The proposed reorganization took the form of a reverse triangular merger, in which SDG&E would become the wholly owned subsidiary of a newly formed public utility holding company that would own the stock of the regulated utility and nonregulated affiliated enterprises. (Ibid.; cf. Re Pacific Gas and Electric Co. (1996) 69 Cal.P.U.C.2d 167, 180 & fn. 3 [describing reverse triangular merger] (PG&E I).)

The PUC ultimately approved SDG&E’s application subject to 20 conditions intended to insulate utility operations and ratepayers from potentially adverse consequences of diversification. (SDG&E I, supra, 20 Cal.P.U.C.2d at pp. 662, 676-686.) Several of these conditions related to the maintenance of the utility’s financial strength. (Id. at p. 681.) Among these financial conditions were the “balanced capital structure” condition, which requires the holding company to maintain a balanced capital structure in its utility subsidiary. Another financial condition was the “stand-alone dividend” condition, which requires the utility to continue to set its dividend policy as if it were a stand-alone entity. As relevant here, one of the conditions imposed upon SDG&E and its holding company was the “capital requirements” or “first priority” condition, which reads as follows: “The capital requirements of the utility, as determined to be necessary to meet its obligation to serve, shall be given first priority by the Board of Directors of [the holding company], and SDG&E.” (Ibid.) Other than describing the first priority condition as a condition related to “financing priorities,” the PUC’s 1986 decision approving SDG&E’s application contains no discussion of the meaning, purpose, or interpretation of the first priority condition. (Ibid.)

In the SDG&E I decision, the Commission devoted considerable attention to the PUC’s authority to enforce the conditions. (SDG&E I, supra, 20 Cal.P.U.C.2d at pp. 686-687.) Parties opposing SDG&E’s application “allege[d] that the Commission has questionable jurisdiction to enforce any conditions adopted in this order as against [the holding company].” (Id. at p. 686.) In contrast to the position SDG&E asserts now in its petition before this court, SDG&E at the time argued that the PUC possesses the authority to enforce the conditions as against SDG&E and its holding company parent, citing section 2111 as evidence of the PUC’s ability to enforce Commission orders violated by entities other than public utilities. Indeed, SDG&E conceded the PUC’s jurisdiction by itself proposing conditions governing the holding company’s activities. Additionally, if the PUC deemed it necessary, SDG&E proposed entering into a contract with its holding company parent agreeing to the performance of the conditions and naming the PUC as a third-party beneficiary to the agreement. Thus, according to SDG&E, the PUC would be entitled to sue either SDG&E or its parent holding company for specific performance of any of the conditions. (20 Cal.P.U.C.2d at p. 686.)

The PUC concluded in SDG&E I that it has jurisdiction over the holding company parent, reasoning as follows; “Section 854 vests in this Commission a broad authority to approve or deny applications for transfers of utility ownership or control. Implicit in this authority is the right to place reasonable conditions upon the transferor and/or transferee should a need for conditions be shown. SDG&E, on its own behalf and on behalf of [its holding company parent], itself argues this proposition. We cannot believe that the right to impose conditions carries with it no right to enforce those conditions; without the latter right, the former is meaningless.” (SDG&E I, supra, 20 Cal.P.U.C.2d at p. 686.) The PUC went on to explain why a contract between SDG&E and its holding company parent incorporating the PUC’s conditions was unnecessary, stating, “The Commission is empowered in myriad ways to secure compliance with its orders. The broad regulatory discretion described in the Public Utilities Act is ample evidence of [this] fact. SDG&E cites the most extreme example of our powers, the ability to pursue contempt remedies for regulatory law violations. SDG&E and [its parent holding company] must, under the terms of Section 854, submit to the Commission’s fullest authority if they in fact intend to consummate the transactions described in their application. Having so submitted, SDG&E and [its parent holding company] need not execute their proposed contract; it would be a superfluous act in light of our existing authorities to pursue the enforcement of any of the foregoing adopted conditions.” (20 Cal.P.U.C.2d at pp. 686-687.)

Ultimately, SDG&E chose not to form a holding company structure in the mid-1980’s because it was unwilling to agree to some of the PUC’s conditions.

2. Edison

One year after the decision in SDG&E I, Edison applied to the PUC under section 854 for approval to reorganize under a holding company structure implemented through a reverse triangular merger. (Southern California Edison Co. (1988) 27 Cal.P.U.C.2d 347, 357 (Edison).) The PUC approved the application, again subject to certain conditions intended to mitigate the dangers stemming from the reorganization so that ratepayers would be indifferent to the change. The PUC’s decision in SDG&E I formed the touchstone for the analysis of Edison’s application. (See Edison, at p. 357.) Indeed, in considering Edison’s application, the PUC asked Edison to comment on each of the 20 conditions imposed in the SDG&E decision. (Ibid.) Once again, the first priority condition was included among the conditions imposed by the PUC.* * (Edison, at p. 368.) Edison agreed to this condition without objection, and the decision contains no discussion of the meaning or application of the first priority condition. (Ibid.)

Unlike the decision in SDG&E I, which included a lengthy discussion of jurisdictional concerns, the 1988 Edison decision touches on jurisdictional issues only briefly. Responding to an argument that a holding company structure would reduce the PUC’s regulatory oversight, the PUC stated that “[w]e do not agree that the Commission needs to exert direct authority over the holding company to regulate the utility effectively .... The utility must still respond to Commission orders regardless of what the parent may do.” (Edison, supra, 27 Cal.P.U.C.2d at p. 361.) However, in a dissent from the decision to permit Edison to form a holding company structure, Commissioner Donald Vial expressed his concern that the decision would limit the PUC’s ability to control or regulate the new affiliate relationships under the holding company structure. (Edison, at p. 395 (dis. opn. of Comr. Vial).)

Edison chose to proceed with its plans to adopt a holding company structure. Accordingly, as required by the PUC’s decision in Edison, Edison filed a written notice reflecting the agreement of Edison and its parent holding company to the conditions imposed in the decision. Like the decision in SDG&E I, the Edison decision did not require the utility to enter into a contract with its holding company parent incorporating the conditions imposed by the PUC. (See Edison, supra, 27 Cal.P.U.C.2d at pp. 374-376 [order approving reorganization].)

3. SDG&E II

In 1994, SDG&E returned to the PUC, once again seeking authorization to reorganize under a holding company structure. (Re San Diego Gas and Electric Co. (1995) 62 Cal.P.U.C.2d 626, 632 (SDG&E II).) At the time, the PUC permitted the application to proceed under section 818 of the Public Utilities Code instead of section 854 because the PUC determined the reorganization involved no change in actual control of SDG&E. Section 818 covers a utility’s issuance of certain debt or equity instruments, while section 854 relates to a change in utility ownership or control.

The decision to consider the application under section 818 did not result from a change in the nature of the proposed transaction, which still involved a reverse triangular merger in which SDG&E would end up becoming the wholly owned subsidiary of a parent holding company. (See SDG&E II, supra, 62 Cal.P.U.C.2d at p. 633.) Rather, the decision to consider the application under section 818 appears to have been motivated by a change in the wording of section 854, which had been amended by 1989 legislation. The 1989 amendments to section 854 require the PUC to make a number of specific findings before authorizing a change in control of a utility, and the revised section 854 places the burden on the party seeking to obtain control of a public utility to prove by a preponderance of the evidence that the requirements of the section are met. (See former § 854, as amended by Stats. 1989, ch. 484, § 1, PP- 1706-1707.)

Despite considering SDG&E’s application under section 818 instead of section 854, the PUC once again imposed certain conditions on the utility and its holding company in order to maintain ratepayer indifference to the proposed reorganization. Once again, the PUC referred back to its 1986 decision in SDG&E I as the genesis of the conditions imposed on utilities seeking to reorganize under holding company structures. (SDG&E II, supra, 62 Cal.P.U.C.2d at p. 635.) As before, the PUC imposed a first priority condition with wording similar to that adopted in the SDG&E I and Edison decisions; “The capital requirements of SDG&E, as determined to be necessary to meet its obligation to serve, shall be given first priority by the Board of Directors of Parent and SDG&E.” (SDG&E II, at p. 651.)

The issue of the PUC’s jurisdiction arose in the SDG&E II decision in the context of a request by the PUC’s Division of Ratepayer Advocates to impose a condition preserving the PUC’s regulatory control over SDG&E’s activities. (SDG&E II, supra, 62 Cal.P.U.C.2d at p. 643.) The PUC rejected the proposal, reasoning that the proposed reorganization would not diminish its regulatory control and that “[a] condition neither adds to nor diminishes our regulatory control.” (SDG&E II, at p. 643.) The PUC also explained that “if [it] imposed this condition, we could expect an endless litigation in which the condition would be invoked as establishing a ‘historical’ test of utility regulation in 1995 as the standard by which all future regulation of SDG&E and its affiliates would be assessed. Parent, SDG&E, the electric utility industry, and our regulatory role will continue to evolve in the future as we revisit the scope and scale of regulatory interests.” (Ibid.)

Both the utility and the holding company passed board resolutions signifying their agreement with the conditions. In 1996, SDG&E’s parent holding company, Enova Corporation, applied to merge with Pacific Enterprises to form a new holding company that would eventually become Sempra Energy (Sempra), the current holding company parent of SDG&E. The PUC approved that application pursuant to section 854, once more imposing certain conditions intended to protect the public interest, and requiring that the newly formed holding company agree to those conditions.

4. PG&E

In 1995, PG&E Utility applied under section 818 to reorganize under a holding company structure, proposing a reverse triangular merger in which PG&E Utility would become the wholly owned subsidiary of newly created holding company. (PG&E I, supra, 69 Cal.P.U.C.2d at pp. 180-181 & fn. 3.) The PUC approved the application, subject again to conditions designed to maintain ratepayer indifference and protect the public interest, and subject to the agreement of the boards of directors of PG&E Utility and its holding company to the conditions. Once again, the PUC referred back to the “history of conditions” associated with holding company reorganizations. (Id. at p. 188.) Among other things, the PUC conditioned its approval of PG&E Utility’s application on compliance with the first priority condition, which was recommended jointly by PG&E Utility and the PUC’s Division of Ratepayer Advocates. (Id. at p. 194.) As ultimately adopted by the PUC in a follow-up decision in 1999 (after an audit had been performed pursuant to the PG&E I decision), the PG&E first priority condition provides that “[t]he capital requirements of PG&E, as determined to be necessary and prudent to meet the obligation to serve or to operate the utility in a prudent and efficient manner, shall be given first priority by PG&E Corporation’s Board of Directors.” (Re Pacific Gas and Electric Co. (1999) 86 Cal.P.U.C.2d 76, 90 (PG&E II).) The Division of Ratepayer Advocates proposed adding the language, “or to operate the utility in a prudent and efficient manner,” and PG&E Utility agreed to the revision. (Ibid.)

Unlike the earlier holding company decisions, the 1996 PG&E I decision and the follow-up 1999 PG&E II decision contain no discussion of the PUC’s jurisdiction to enforce the conditions as against the holding company. PG&E Utility and its holding company parent, PG&E Corporation, agreed to the PUC’s conditions.

B. The Order Instituting Investigation

In April 2001, the PUC instituted an investigation to determine, among other things, whether the utilities and their respective holding companies had violated the conditions imposed by the PUC when it authorized the formation of the holding companies. In its Order Instituting Investigation, the PUC cited concerns that the utilities had transferred billions of dollars to their holding companies since the advent of deregulation in the electric utility industry, including at times when the utilities were experiencing financial distress, in apparent violation of the condition that a utility must maintain a dividend policy as though it were a comparable stand-alone utility company. (See Order Instituting Investigation, supra, at p. 4, 2001 Cal.PUC LEXIS 405.) The PUC also cited the failure of the holding companies to financially assist the utilities when needed, in apparent violation of the condition that the holding companies give first priority to the capital needs of their utility subsidiaries. The Order Instituting Investigation directed the holding companies to demonstrate why their “evident failure to provide sufficient capital to their utility subsidiaries to alleviate or mitigate the subsidiaries’ need for capital . . . did not violate, and does not continue to violate, the ‘first priority’ condition . . . .” (Id. at p. 15.)

C. The Motions to Dismiss for Lack of Jurisdiction

Each of the holding companies moved for an order dismissing the holding company as a named respondent in the investigation. The holding companies argued the PUC only has subject matter jurisdiction over public utilities, that the holding companies are not public utilities, and that their agreement to be bound by the holding company conditions did not effect a waiver of the jurisdictional objections or estop them from raising such objections. In a draft decision, the PUC denied the motion based primarily on the principle of estoppel, ruling that the holding companies’ acceptance of the PUC’s authorization to reorganize, combined with their failure to challenge the PUC’s jurisdiction at the time the conditions were imposed, precluded them from challenging the PUC’s authority years later. Alternatively, the PUC held that the statutes obligating the PUC to approve the formation of holding company structures gave the PUC implied jurisdiction to issue orders binding on the holding companies as conditions to the PUC’s approval.

In their comments on the draft decision, the holding companies changed their focus considerably. Although they initially appeared to contest the authority of the PUC to enforce the holding company conditions at all, the holding companies subsequently conceded that the conditions are enforceable, but only in an action for breach of contract brought in superior court, not in a proceeding before the PUC.

In a January 9, 2002 decision, the PUC denied the motions to dismiss. In addition to holding that it had jurisdiction over the holding companies to enforce the holding company conditions, the PUC held that it retained the power under section 1708 to modify, clarify, or add to the conditions initially imposed in the underlying proceedings. Two of the five commissioners dissented. In their dissent, Commissioners Duque and Bilas agreed with the holding companies that the PUC lacks jurisdiction over them, concluding that the holding company conditions are enforceable, but only in an action brought in superior court. The dissent took particular exception to the portion of the decision in which the PUC concluded it had authority to modify or add to the conditions imposed on the holding companies.

The holding companies sought a rehearing of the decision. In a now unanimous decision filed July 17, 2002, the PUC modified its earlier decision and denied rehearing. Although the PUC in its original decision had based its denial on a variety of theories, including estoppel, the PUC in its order on rehearing based its denial solely on the ground that it has jurisdiction over the holding companies to enforce the holding company conditions by virtue of the statutes giving the PUC the authority to approve reorganizations or issuances of certain securities and debt instruments subject to conditions. In addition to denying rehearing, the decision also modified the original decision to delete the conclusions criticized by the dissenters regarding the PUC’s continuing jurisdiction to add to or modify the holding company conditions.

D. Interim Opinion on Interpretation of First Priority Condition

In connection with its Order Instituting Investigation, the PUC asked the holding companies to furnish information regarding whether they had provided sufficient capital to their utility subsidiaries to alleviate or mitigate the subsidiaries’ need for capital during the electricity energy crisis of 2000 and 2001. In response to these requests, the holding companies suggested among other things that the financial needs of their utility subsidiaries constituted needs for operating cash, or working capital, and that these needs do not implicate the first priority condition, because the condition is limited to a utility’s needs for equity capital. To resolve this issue, the PUC ordered briefing on the meaning of the first priority condition.

In a January 9, 2002 decision, the PUC provided its interim opinion on the meaning of the first priority condition. The PUC found that the condition’s reference to capital must be interpreted expansively and not just limited to equity capital or to investment in the utilities’ plant and equipment. The PUC found that, under “certain circumstances,” “the condition includes the requirement that the holding companies infuse all types of ‘capital’ into their respective utility subsidiaries when necessary to fulfill the utility’s obligation to serve.” (Cal.P.U.C. Dec. No. 02-01-039, supra, at p. 2, 2002 Cal.PUC LEXIS 5, at p. *2.) Notably, the PUC made no finding that any holding company or utility had violated the first priority condition. The decision states that “[fjinding such a violation requires a case-by-case analysis of each Respondent’s individual circumstances that will be the subject of later proceedings in this docket.” (Ibid.)

Two of the five commissioners dissented. The two dissenting commissioners, Commissioners Duque and Bilas, were the same commissioners who dissented in the PUC’s original decision on the motion to dismiss. One commissioner, Commissioner Brown, filed a separate concurrence in which he opined that the first priority condition “should be qualified,” and although he believed that the condition “requires the holding company to do more than look to the capital assets or investment in infrastructure, [he did] not believe it connotes an unlimited responsibility to keep cash flowing from the holding company to the utility where the Commission has failed to allow compensatory utility rates.” (Cal.P.U.C. Dec. No. 02-01-039, supra, at p. 43, 2002 Cal.PUC LEXIS 5, at p. *64 (conc. opn. of Comr. Brown).)

In the PUC’s original, January 9, 2002, decision on the meaning of the first priority condition, the PUC dismissed PG&E Corporation from the proceeding without prejudice, but not for jurisdictional reasons. Rather, the dismissal apparently resulted from concerns about a PG&E Utility bankruptcy reorganization plan that proposed transferring PG&E Utility assets to affiliates of PG&E Corporation, transfers the PUC indicated may violate the first priority condition or otherwise reflect sweetheart deals between PG&E Utility and PG&E Corporation. The PUC explained PG&E Corporation’s dismissal as follows: “In view of the potentially serious adverse impacts on both PG&E [Utility] and ratepayers that are likely to result in the event that the [bankruptcy plan] is adopted, and in view of the expedited time frame on which the PG&E [Utility] bankruptcy case is moving forward, we will dismiss PG&E Corp. from this proceeding without prejudice so that the issue of whether the adoption of the [bankruptcy plan] would result in a violation of the first priority condition can be resolved in the appropriate judicial forums.” (Cal.P.U.C. Dec. No. 02-01-039, supra, at pp. 35-36, 2002 Cal-PUC LEXIS 5, at p. *53, fn. omitted.)

The holding companies and the utilities sought a rehearing of the decision, maintaining that the first priority condition “requires only that they maintain a certain level of capital expenditure or equity investment in the utilities’ plant and equipment.” (Cal.P.U.C. Dec. No. 02-07-043, supra, at p. 2, 2002 Cal.PUC LEXIS 440.) In a July 17, 2002 decision, the PUC denied rehearing, although it modified its earlier decision slightly, including adding the finding of fact that “[t]he Commission has made no final determination that any utility or holding company violated the first priority condition, or that any particular remedy should follow.” (Id. at p. 41.) The decision was unanimous, with one abstention.

E. The Petitions for Writ of Review

These petitions followed. Three petitions, filed by the holding companies— PG&E Corporation, EIX, and Sempra—challenge the PUC’s decision denying the holding companies’ motions to dismiss for lack of jurisdiction. Four petitions, filed by the holding companies and their utility subsidiaries— PG&E Corporation, PG&E Utility, EIX/Edison, and Sempra/SDG&E— challenge the PUC’s interim opinion on the meaning of the first priority condition.

In the proceedings before the PUC, a number of parties of record presented positions adverse to the petitioners. Under rule 58(a) of the California Rules of Court, these parties are designated as real parties in interest in these writ proceedings. Of the parties of record that presented positions before the PUC, only the City and County of San Francisco and The Utility Reform Network (TURN), a ratepayer advocacy organization, filed answers to one or more of the petitions filed in this court.

HI. DISCUSSION

A. Propriety of Writ Review

“[A]ny aggrieved party [to a PUC decision] may petition for a writ of review in the court of appeal. . . .” (§ 1756, subd. (a).) Where, as here, “writ review is the exclusive means of appellate review of a final order or judgment, an appellate court may not deny an apparently meritorious writ petition, timely presented in a formally and procedurally sufficient manner, merely because, for example, the petition presents no important issue of law or because the court considers the case less worthy of its attention than other matters.” (Powers v. City of Richmond (1995) 10 Cal.4th 85, 114 [40 Cal.Rptr.2d 839, 893 P.2d 1160], fn. omitted.) We are not, however, “compelled to issue the writ if the PUC did not err . . . .” (Pacific Bell v. Public Utilities Com. (2000) 79 Cal.App.4th 269, 282 [93 Cal.Rptr.2d 910], fn. omitted.)

Although we deny the relief requested by petitioners in this decision, we nevertheless granted a writ of review because the petitions present important and unsettled legal questions. In addition, although summary denial of a petition seeking prerogative writs such as mandate and prohibition does not preclude further litigation of the issues presented, a summary denial of a petition for writ of review from a PUC order acts as law of the case, precluding further litigation between the parties of the challenged PUC order. (Compare Kowis v. Howard (1992) 3 Cal.4th 888, 891 & 897, fn. 2 [12 Cal.Rptr.2d 728, 838 P.2d 250], with Consumers Lobby Against Monopolies v. Public Utilities Com. (1979) 25 Cal.3d 891, 901 [160 Cal.Rptr. 124, 603 P.2d 41] (CLAM).) The rationale for this distinction is that a petition for writ of review is the sole means of appellate review and serves the function of an appeal, so that a denial “must therefore be deemed a decision on the merits” that “raises the bar of res judicata against relitigation of the same cause of action between the same parties or their privies.” (CLAM, supra, 25 Cal.3d at p. 901.) Although a summary denial of the subject petitions for writ of review has no precedential value and is not binding on nonparties (id. at p. 902), it would foreclose any further litigation on the issues presented in the petitions between the holding companies and the PUC, at least in the context of the current proceeding initiated by the Order Instituting Investigation.

In light of the preclusive effect given to the summary denial of a petition for writ of review from a PUC order, we have granted a writ of review with respect to the PUC’s interim opinion on the meaning of the first priority condition to clarify that our denial should not be given law of the case effect. Rather, because we have concluded the issue of the condition’s interpretation is not ripe for review, our denial is without prejudice to the right of any party to raise the issue anew after there has been a determination that one or more of the holding companies have violated the first priority condition and, if so, what remedies are appropriate. (Cf. CLAM, supra, 25 Cal.3d at pp. 903-904 [when petition denied as unripe, court does not adjudicate petition’s substantive issues].)

B. Standard of Review

Section 1757 defines the scope of our review of PUC decisions. We are authorized to determine whether the PUC has “acted without, or in excess of, its power or jurisdiction,” “has not proceeded in the manner required by law,” has issued a decision “not supported by the findings,” has issued findings “not supported by substantial evidence in light of the whole record,” has issued an order or decision that was “procured by fraud or was an abuse of discretion,” or has violated “any right of the petitioner” under the United States or California Constitution. (§ 1757, subd. (a).)

The PUC contends its interpretation of the Public Utilities Code should be given great weight because the PUC is the agency constitutionally authorized to administer the provisions of the Public Utilities Code. EIX in contrast argues that the PUC’s interpretation of the scope of its own jurisdiction, even if based on the Public Utilities Code, is not entitled to deference.

In general, an agency’s interpretation of statutes within its administrative jurisdiction is given presumptive value as a consequence of the agency’s special familiarity and presumed expertise with satellite legal and regulatory issues. (Yamaha Corp. of America v. State Bd. of Equalization (1998) 19 Cal.4th 1, 11 [78 Cal.Rptr.2d 1, 960 P.2d 1031] (Yamaha Corp.).) Ordinarily, therefore, the PUC’s “interpretation of the Public Utilities Code should not be disturbed unless it fails to bear a reasonable relation to statutory purposes and language . . . .” (Greyhound Lines, Inc. v. Public Utilities Com. (1968) 68 Cal.2d 406, 410-411 [67 Cal.Rptr. 97, 438 P.2d 801].) However, “the general rule of deference to interpretations of statutes subject to the regulatory jurisdiction of agencies does not apply when the issue is the scope of the agency’s jurisdiction.” (Kaiser Foundation Health Plan, Inc. v. Zingale (2002) 99 Cal.App.4th 1018, 1028 [121 Cal.Rptr.2d 741].) Even in cases not questioning the jurisdiction of an agency, the interpretation of statutes is a question of law subject to independent judicial review. (Yamaha Corp., supra, 19 Cal.4th at p. 7.)

In interpreting statutes, we are free to “tak[e] into account” agency interpretations, but such agency interpretations “are not binding or necessarily even authoritative.” (Yamaha Corp., supra, 19 Cal.4th at pp. 7-8.) The weight we attach to agency interpretations is “contextual,” and depends on factors such as “ ‘the thoroughness evident in [the agency’s] consideration, the validity of its reasoning, its consistency with earlier and later pronouncements, and all those factors which give it power to persuade, if lacking power to control. [Citation.]’ ” (Id. at pp. 14—15, quoting Skidmore v. Swift & Co. (1944) 323 U.S. 134, 140 [89 L.Ed. 124, 65 S.Ct. 161], italics omitted.)

We conclude that the PUC’s interpretation of the scope of its own jurisdiction must bear more than just a “reasonable relation” to statutory purposes and language, although we disagree with EIX’s contention that the PUC’s interpretation is entitled to no deference. Here, the PUC contends it is authorized by statute to impose and enforce conditions pursuant to its statutory power to approve changes in control and issuances of securities by public utilities. Although the scope of the PUC’s jurisdiction is ultimately a legal question subject to independent review, in deciding this issue we necessarily take into account the PUC’s interpretation of the statutes it is charged to administer, mindful that the PUC’s interpretation is not controlling but is accorded weight commensurate with the thoroughness, validity, and consistency of the PUC’s reasoning. The PUC’s interpretation is one of “among several tools available to the court” in determining the meaning and legal effect of a statute. (Yamaha Corp., supra, 19 Cal.4th at p. 7.)

C. Jurisdiction of the PUC to Enforce Holding Company Conditions

1. The Grounds for the PUC’s Decision

The PUC’s rationale for denying the holding companies’ motions to dismiss is most concisely expressed in Decision No. 02-07-044, the decision denying rehearing. In that decision, the PUC maintains the Legislature has granted the PUC specific authority to enforce the holding company conditions.

The PUC approved the holding company applications of SDG&E and PG&E Utility under section 818, which provides that no public utility may issue stocks or certain forms of indebtedness without obtaining the PUC’s prior approval. Section 819 bolsters the preapproval requirement of section 818, authorizing the PUC to refuse an application, modify the request, or “grant it subject to such conditions as it deems reasonable and necessary.” (§ 819.)

The PUC approved Edison’s holding company application under section 854, which at the time provided that no person or corporation could acquire control of a public utility “without first securing authorization to do so from the [PUC].” (Former § 854, as added by Stats. 1971, ch. 1373, § 1, p. 2695.) As discussed earlier, section 854 was amended after 1989, in relevant part, to permit the PUC to “provide mitigation measures to prevent significant adverse consequences which may result” from a proposed merger or change in control governed by section 854. (§ 854, subd. (c)(8).) Although the version of section 854 in effect at the time of the Edison holding company approval did not expressly authorize mitigation measures, the PUC noted that “no one has questioned the Commission’s earlier authority to fashion section 854 conditions, as we did without challenge in approving the Edison holding company.” (Cal.P.U.C. Dec. No. 02-07-044, supra, at p. 5, 2002 Cal.PUC LEXIS 430, at p. *7.)

Indeed, none of the holding companies disputes the statutory authority of the PUC to impose conditions pursuant to either sections 818, 819, or 854, at least at the time the PUC approved the formation of the holding companies. The holding companies assert, in effect, that this authority is evanescent, leaving the PUC with no jurisdiction to enforce the conditions in proceedings before the PUC after the conditions have been imposed.

According to the PUC, “[it] makes little sense to grant the Commission authority over protecting the public interest through conditions and mitigation measures, but not allow it to exercise its traditional functions to oversee and enforce those measures.” (Cal.P.U.C. Dec. No. 02-07-044, supra, at p. 5, 2002 Cal.PUC LEXIS 430, at p. *7.) Beyond this commonsense response to the holding companies’ arguments, the PUC relies on section 701, which provides that the PUC may do all things necessary and convenient in the exercise of its power and jurisdiction to supervise and regulate every public utility, whether or not such measures are specifically designated in the Public Utilities Code. Thus, the PUC maintains, “When read in conjunction with section 701, sections 818, 819, and 854 provide the Commission with continuing jurisdiction over the holding companies for the limited purpose of monitoring and enforcing the holding company conditions.” (Cal.P.U.C. Dec. No. 02-07-044, 2002 Cal.PUC LEXIS 430, at pp. *6-*7.)

2. Contrary to the Claims of the Holding Companies, the PUC Does Not Seek to Assert General Jurisdiction over the Holding Companies.

Fundamentally, the holding companies object to the PUC’s assertion of jurisdiction because they claim the PUC’s jurisdiction is limited to the regulation of “public utilities.” Although the PUC concedes that the holding companies are not public utilities, the PUC nevertheless argues it can assert limited jurisdiction over the holding companies to enforce the holding company conditions. The PUC claims it has never sought to exercise general or plenary regulatory powers over the holding companies, which mistakenly rely on statutory interpretations and case law focusing solely on the PUC’s general jurisdiction over public utilities.

The PUC is constitutionally vested with the authority to regulate public utilities. (Cal. Const., art. XII, §§ 1-6.) As set forth in section 216, subdivision (a), the definition of “public utility” encompasses entities that are “electrical corporation[s].” It is undisputed that the holding companies are not “public utilities” as that term in defined in the Public Utilities Code.

The California Constitution, however, also provides that “[t]he Legislature has plenary power, unlimited by the other provisions of this constitution but consistent with this article, to confer additional authority and jurisdiction upon the commission . . . .” (Cal. Const., art. X3I, § 5, italics added.) As our Supreme Court has recognized, citing the Legislature’s plenary power to confer additional jurisdiction on the PUC, “[t]he commission’s powers . . . are not restricted to those expressly mentioned in the Constitution.” (CLAM, supra, 25 Cal.3d at p. 905.) Thus, for example, there is no dispute that, when authorized by the Legislature, the PUC may exercise limited jurisdiction over entities other than public utilities. (See, e.g., § 394.1 [jurisdiction over energy service providers]; § 739.5 [jurisdiction over mobilehome parks]; § 99152 [jurisdiction over public transit].) Indeed, the holding companies do not suggest such grants of authority are beyond the power of the Legislature. Accordingly, the holding companies are incorrect in their assertion that, as a general principle, the PUC’s jurisdiction is limited to public utilities.

The PUC contends the Legislature has conferred limited jurisdiction upon the PUC to impose and enforce the holding company conditions pursuant to sections 701, 818, 819, and 854, in recognition of the risks to ratepayers when utilities change ownership or issue securities. Indeed, the PUC claims it would likely violate its public interest mandate by approving utility applications to form holding companies without the ability to assert continuing jurisdiction to enforce the holding company conditions. Section 701 is of particular relevance because it allows the PUC to “do all things . . . necessary and convenient” in the exercise of its authority over public utilities whether or not “specifically designated” in the Public Utilities Code. Where the authority sought is “cognate and germane” to utility regulation, the PUC’s authority under section 701 has been liberally construed. (CLAM, supra, 25 Cal.3d at pp. 905-906; Southern California Edison Co. v. Peevey (2003) 31 Cal.4th 781, 792 [3 Cal.Rptr.3d 703, 74 P.3d 795]; San Diego Gas & Electric Co. v. Superior Court (1996) 13 Cal.4th 893, 915 [55 Cal.Rptr.2d 724, 920 P.2d 669].) The holding companies correctly point out that section 701 has never been read to expand the scope of the PUC’s jurisdiction beyond public utilities, at least in any citable appellate opinion. However, contrary to the holding companies’ contentions, nothing in section 701 or elsewhere limits that statute’s reach to public utilities. Although the statute initially refers to the PUC’s power to “supervise and regulate every public utility,” the PUC’s authority to do all things “necessary and convenient” in the exercise of that power is not expressly limited to actions against public utilities. (§ 701.)

While the holding companies effectively concede the jurisdiction of the PUC to impose conditions under sections 818, 819, and 854, they argue that section 701 does not operate as an independent source of jurisdiction for the PUC to enforce the conditions, citing Assembly v. Public Utilities Com. (1995) 12 Cal.4th 87 [48 Cal.Rptr.2d 54, 906 P.2d 1209](Assembly). In Assembly, our Supreme Court “rejected a construction of section 701 that would confer upon the Commission powers contrary to other legislative directives . . . .” (Id. at p. 103.) Likewise, as the holding companies point out, the Supreme Court in Pacific Tel. & Tel. Co. v. Public Util. Com. (1965) 62 Cal.2d 634, 653 [44 Cal.Rptr. 1, 401 P.2d 353] (Pacific Tel. & Tel. Co.), held that section 701 “does not authorize disregard by the commission of express legislative directions to it, or restrictions upon its power found in other provisions of the act or elsewhere in general law.”

The holding companies’ reliance on Assembly and Pacific Tel. & Tel. Co. is misplaced. In Assembly, the PUC attempted to rely on section 701 as authority to direct ratepayers refunds from Pacific Bell to a school telecommunications infrastructure fund, despite an express statutory mandate (§ 453.5) that such refunds be returned to ratepayers. (Assembly, supra, 12 Cal.4th at pp. 102-104.) In Pacific Tel. & Tel. Co., the PUC directed a utility to refund to ratepayers amounts collected under a previously approved rate schedule based on the PUC’s conclusion that past rates should have been lower, notwithstanding express direction from the Legislature that the PUC’s orders fixing rates must be prospective only. (Pacific Tel. & Tel. Co, supra, 62 Cal.2d at pp. 649-650, 653.) In both Assembly and Pacific Tel. & Tel. Co., section 701 was inapplicable because the actions of the PUC disregarded “express legislative directives.” (Assembly, supra, 12 Cal.4th at pp. 103-104; Pac. Tel. & Tel. Co., supra, 62 Cal.2d at p. 653.) Here, by contrast, the holding companies fail to point to any statutory mandate or directive forbidding the PUC from enforcing the holding company conditions, and we are aware of none

The holding companies also cite and rely on Television Transmission v. Public Util. Com. (1956) 47 Cal.2d 82 [301 P.2d 862] (Television Transmission), and Hartwell Corp. v. Superior Court (2002) 27 Cal.4th 256 [115 Cal.Rptr.2d 874, 38 P.3d 1098] (Hartwell), for the proposition that the PUC has no authority over entities other than public utilities. Neither case supports the proposition that the PUC cannot exercise limited jurisdiction to enforce the holding company conditions.

In Television Transmission, the PUC attempted to exercise its general jurisdiction over a local cable television company by classifying the company as a “telephone corporation . . . subject to its jurisdiction.” (Television Transmission, supra, 47 Cal.2d at p. 86, fn. omitted.) The Supreme Court held that the cable television company did not fall within the enumerated classes of public utilities, and as a consequence, “the commission had no jurisdiction to issue the orders in question.” (Id. at p. 89.)

In Hartwell, an action in which the PUC was not a party, the Supreme Court considered superior court jurisdiction over “parties not subject to PUC regulation” on issues tangentially related to the PUC’s jurisdiction. (Hartwell, supra, 27 Cal.4th at p. 280.) In particular, a nonregulated water provider contended that a superior court action against it was barred by virtue of section 1759, which in general provides that no court except the Supreme Court or Court of Appeal shall have jurisdiction to review, reverse, correct, or annul any order or decision of the PUC. While acknowledging it was not subject to the jurisdiction of the PUC, the nonregulated water provider nevertheless contended that section 1759 precluded the superior court action against it because the issues presented were identical to issues in proceedings then before the PUC involving regulated water providers. (27 Cal.4th at p. 279.) Rejecting this “issue oriented analysis” for application of section 1759, the Supreme Court held that section 1759 “must be read to bar superior court jurisdiction that interferes with the PUC’s performance of its regulatory duties, duties which by constitutional mandate apply only to regulated utilities.” (Hartwell, at pp. 280-281.)

As the Supreme Court observed in Hartwell, “ ‘[l]anguage used in any opinion is of course to be understood in the light of the facts and the issue then before the court, and an opinion is not authority for a proposition not therein considered. ’ ” (Hartwell, supra, 27 Cal.4th at p. 281, quoting Ginns v. Savage (1964) 61 Cal.2d 520, 524, fn. 2 [39 Cal.Rptr. 377, 393 P.2d 689].) The statements in Television Transmission and Hartwell to the effect the PUC’s jurisdiction is limited to regulated utilities must be considered in the context of those cases. Indeed, lacking the context in which the statements arose, they appear to be directly at odds with statutes granting the PUC limited jurisdiction over entities not otherwise defined as public utilities. (See, e.g., § 394.1 [jurisdiction over energy service providers]; § 739.5 [jurisdiction over mobilehome parks]; § 99152 [jurisdiction over public transit].) The holding companies misread Television Transmission and Hartwell, which concern the PUC’s general or plenary jurisdiction. Those decisions, to the extent they apply beyond their unique sets of facts, do not foreclose the PUC’s assertion of limited jurisdiction to enforce conditions it is statutorily empowered to impose, provided such conditions are cognate and germane to utility regulation.

Moreover, unlike the fact scenario in Television Transmission, the PUC does not seek to assert jurisdiction over the holding companies by classifying them as public utilities. The PUC expressly acknowledges the holding companies are not public utilities. Unlike the cable television company in Television Transmission, which was not a public utility and otherwise had no connection to a regulated entity, the holding companies here are bound by conditions imposed by the PUC concerning their dealings with entities that are unquestionably public utilities subject to the PUC’s jurisdiction. Thus, the PUC’s exercise of limited jurisdiction over the holding companies is cognate and germane to its regulation of a public utility, namely, the utility subsidiary of the holding company. Furthermore, in contrast to Hartwell, in which an unregulated entity sought to employ an issue-oriented analysis for determining what falls within the PUC’s jurisdiction, the PUC here did not attempt to justify its limited jurisdiction over the holding companies simply by reference to the issues presented in the dispute.

FIX raises the specter that, under the guise of doing all things “necessary and convenient” in the exercise of its powers, the PUC could seek to regulate every person or entity that does business with public utilities. This concern is unjustified and overblown. We reiterate that the PUC does not seek to exercise general regulatory control over the holding companies as if they were public utilities; it merely seeks to enforce the holding company conditions that were the preconditions to formation of the holding companies. The mere fact the holding companies do business with their utility subsidiaries is not the basis for the PUC asserting jurisdiction. Unlike the holding companies, most entities that have business dealings with public utilities have not agreed to PUC-imposed conditions embodied in orders approving the entity’s formation. In addition, the holding companies are much more than just entities “doing business with” public utilities. Concerns about potential abuses in the relationship between a holding company and its utility subsidiary led to the imposition of holding company conditions. Those concerns remain ongoing.

The primary limiting factor on PUC jurisdiction is that the PUC’s action must be cognate and germane to utility regulation. We do not suggest that the PUC has enforcement authority over entities other than public utilities simply because it has the power to approve certain transactions involving public utilities subject to conditions. The conditions and the PUC’s interest in their enforcement must directly relate to some aspect of utility regulation. In these actions, there is little doubt that the disputed holding company conditions are germane to aspects of the PUC’s regulatory authority over the subsidiary utilities. Accordingly, absent a specific legislative directive prohibiting the PUC from enforcing conditions it is empowered to impose, we conclude the PUC has jurisdiction under the circumstances presented here to enforce the conditions in a proceeding before the PUC.

3. The Absence of Express Statutory Authority to Enforce the Holding Company Conditions Does Not Imply the PUC Lacks Jurisdiction To Do So.

While acknowledging the power of the Legislature to confer limited PUC jurisdiction over nonutilities, PG&E Corporation and EIX assert that a statute cannot confer PUC jurisdiction over entities other than public utilities unless it does so explicitly and unambiguously. PG&E Corporation offers as authority for this proposition Pac. Tel. & Tel. Co. v. Public Utilities Com. (1950) 34 Cal.2d 822 [215 P.2d 441] (Pacific Telephone). In Pacific Telephone, the PUC found that fees paid by Pacific Telephone to its parent, AT&T, were excessive. (Id. at p. 824.) To redress the problem, the PUC ordered Pacific Telephone to pay no more than the reasonable costs incurred in the rendition of AT&T’s services to Pacific Telephone. Over a number of dissents, the Supreme Court held that the PUC had exceeded its jurisdiction. The Supreme Court stated: “In the absence of express statutory authority it has generally been held that a commission’s control over contracts between affiliated corporations is limited to disallowance of excessive payments for the purpose of fixing rates. [Citations.]” (Id. at p. 830.) The Supreme Court concluded that “[t]he Public Utilities Act is silent on the question of affiliated corporations, and only the Legislature can properly decide whether they present such dangers of abuse that the commission should have broader regulatory powers over them than it now has.” (Id. at p. 832.) The holding companies maintain that Pacific Telephone confirms the limits of PUC authority over affiliates of public utilities.

Upon closer examination, the holding in Pacific Telephone is much more limited than the holding companies suggest. Perhaps more importantly, the court’s reasoning in Pacific Telephone has little or no continuing vitality in light of the Supreme Court’s subsequent decision in General Telephone Co. v. Public Utilities Com. (1983) 34 Cal.3d 817 [195 Cal.Rptr. 695, 670 P.2d 349] (General Telephone). Pacific Telephone concerned PUC regulation of a contract between a utility subsidiary and its parent; it did not concern the enforcement of conditions imposed upon the parent at the time of its formation. In addition, the majority in Pacific Telephone recognized that the PUC could treat affiliated corporations differently from other contracting parties only if the Legislature so provided or if the affiliated corporations “are used as a device to defeat the exercise of powers the commission has been granted.” (Pacific Telephone, supra, 34 Cal.2d at p. 832.) Thus, the Supreme Court recognized a half-century ago that under certain circumstances the PUC had jurisdiction over the relationship between a public utility and its parent holding company in the absence of a statute conferring such authority.

In General Telephone, although the Supreme Court ultimately found the facts distinguishable from those in Pacific Telephone, the court concluded that case law developments after Pacific Telephone cast serious doubt on that case’s continued vitality. (General Telephone, supra, 34 Cal.3d at p. 826.) Among other things, the General Telephone court observed that the court had become “more willing to permit regulatory bodies to exercise powers not. expressly stated in their mandate” in the years after the Pacific Telephone decision. (General Telephone, at p. 825.) The Supreme Court also stated that the “[Pacific Telephone] court’s observations regarding the commission’s powers to control the relationship between utilities and their parents or affiliates have succumbed to regulatory realism.” (Id. at p. 826.) In short, Pacific Telephone provides little support for the holding companies’ position.

In lieu of case authority supporting their position, the holding companies offer examples of express statutory grants of jurisdiction over holding companies. These examples purportedly demonstrate that when the Legislature chooses to expand the PUC’s jurisdiction, it does so explicitly and precisely.

There are very few references in the Public Utilities Code to holding companies. The holding companies point to section 314, subdivision (b), and section 798, as examples of statutes in which the Legislature has seen fit to define PUC authority, or lack of authority, over holding companies.

Section 314 concerns the authority of the PUC to inspect the accounts and records of public utilities and their affiliates. In subdivision (a), the statute provides in relevant part that the PUC and its agents “may, at any time, inspect the accounts, books, papers, and documents of any public utility.” (§314, subd. (a).) Subdivision (b) extends this inspection authority to subsidiaries and affiliates of public utilities, providing that “[subdivision (a) also applies to inspections of the accounts, books, papers, and documents of any business which is a subsidiary or affiliate of, or a corporation which holds a controlling interest in, an electrical, gas, or telephone corporation with respect to any transaction between the electrical, gas, or telephone corporation and the subsidiary, affiliate, or holding corporation on any matter that might adversely affect the interests of the ratepayers of the electrical, gas, or telephone corporation.” (§ 314, subd. (b).)

EIX contends that, if the PUC’s interpretation of the scope of its authority were correct, then “there would have been no reason for the Legislature to have enacted a provision granting limited access to holding company records, because the holding companies would already be within the Commission’s jurisdiction.” According to EIX, the limited statutory grant of a right to inspect holding company records in section 314, subdivision (b), “would be unnecessary if merely being a utility’s parent holding company conferred regulatory jurisdiction upon the Commission.”

EIX’s argument is premised on the mistaken assumption that the PUC claims jurisdiction over the holding companies simply because they have controlling interests in public utilities. Instead, the PUC claims limited jurisdiction over the holding companies based on its statutory power to impose conditions upon approving changes in control of, or issuances of securities by, public utilities. Section 314, subdivision (b), is not mere surplusage, because it confirms the PUC’s authority to inspect the records of all holding companies, not just those which have agreed to a similar PUC condition imposed at the time the holding company was formed. Moreover, EIX’s argument suggests the PUC claims general regulatory jurisdiction over the holding companies, when the PUC merely seeks to enforce the specific holding company conditions to which EIX agreed, upon its formation.

In addition, in our review of the legislative history of subdivision (b) of section 314, we find no support for the holding companies’ argument that the statute’s specific grant of PUC authority over holding companies means, by implication, that the PUC has no authority over holding companies other than what is expressly and unambiguously set forth by statute. Before its amendment in 1985, section 314 referred to the authority of the PUC to inspect the books and records of “any public utility.” (Former § 314, as amended by Stats. 1951, ch. 764, § 314, pp. 2035-2036.) In 1985, Assembly Bill No. 116 added subdivision (b), which extended the PUC’s inspection authority to encompass subsidiaries or affiliates of telephone corporations. (Former § 314, subd. (b), as amended by Stats. 1985, ch. 1249, § 1, p. 4299.) The author of the legislation carried the bill at the request of the PUC, citing the need for regulatory oversight as telephone corporations diversified and entered into unregulated lines of business that might create a potential for harm to telephone ratepayers. (Assem. Com., 3d reading analysis of Assem. Bill No. 116 (1985-1986 Reg. Sess.) June 20, 1985, p. 2.) In its Enrolled Bill Report to the Governor, the PUC, as principal sponsor of the legislation, pointed out there is “no clear authority . . . which authorizes the PUC to audit the books and papers of a non-regulated affiliated or subsidiary company of the utility . . . .” (PUC Legal Division, Enrolled Bill Rep. on Assem. Bill No. 116 (1985-1986 Reg. Sess.) Sept. 25, 1985, pp. 1-2.) The PUC expressed a “need for legislative expression clarifying the PUC’s authority .. . .” (Id., p. 2.)

One year after amending section 314 to apply to telephone company affiliates, the Legislature amended the statute again to extend its application to affiliates or subsidiaries of electrical and gas corporations, as well as to corporations holding a controlling interest in such entities. (§ 314, subd. (b), as amended by Stats. 1986, ch. 845, § 1, p. 2893.) Specifically referring to SDG&E’s original 1985 application to form a holding company, an analysis of the bill stated: “In the recent PUC decision allowing SDG&E to form a holding company, the PUC imposed a numb