Full opinion text
ORDER WALKER, District Judge. By its complaint, Pacific Gas and Electric Company (PG & E) attacks the regulatory restructuring scheme California developed and later implemented for its electrical public utilities. PG & E names as defendants Loretta M Lynch, Henry M Duque, Carl W Wood, Geoffrey F Brown and Michael R Peevey, in their„ official capacities as Commissioners of the California Public Utilities Commission (CPUC). PG & E has moved for summary judgment on its first and second claims for relief (Doc # 111) while defendants have filed cross-motions for summary judgment or, in the alternative, for partial summary judgment on PG & E’s preemption claims. Doc # 104. Applicant in intervention The Utility Reform Network (TURN) also moves for summary judgment against PG & E. Doc #119. I A PG & E filed its original complaint against defendants on November 8, 2000, in this court, bringing the same claims as in its present complaint, with the addition of an equal protection claim. See Compl in PG & E v. Lynch, et al, No C-00-4128 (SBA) (NDCal), in PRJN I (Doc # 49, Exh # 3). That action was subsequently transferred to Judge Lew in the Central District of California, who was presiding over a similar lawsuit filed by Southern California Edison (SCE). After PG & E amended its complaint, defendants moved to dismiss. See Def Mot in PG & E v. Lynch, et al, No C-01-1083-RSWL (SHx) (CDCal), in PRJN I (Doc # 50, Exh # 11). On May 2, 2001, Judge Lew granted defendants’ motion to dismiss without prejudice on ripeness grounds, because “many of the decisions to which PG & E refers in its [first amended complaint] as violating federal law are non-final interim orders that will become final upon a grant or denial of rehearing.” 5/2/01 Order at 38, attached in PRJN I (Doc # 49, Exh # 2). Judge Lew noted that PG & E could refile its complaint once the “CPUC interim orders it challenges become final decisions.” Id at 39. On August 8, 2001, PG & E filed the instant action before Judge Hamilton in this court, asserting that two of the orders central to its complaint had become final under state law. See Compl in PG & E v. Lynch, et al, No C-01-3023-PJH (Doc # 1). On September 24, 2001, defendants moved to dismiss PG & E’s complaint. Doc # 24. Also on September 24, TURN moved to intervene and to dismiss PG & E’s complaint. Docs ## 18 and 20. On December 18, 2001, the undersigned determined that C-01-3023-PJH was related to a bankruptcy appeal brought by PG & E and pending before the undersigned, C-01-2490-VRW, and C-01-3023-PJH was reassigned to the undersigned. The court heard oral argument on defendants’ and TURN’S motions to dismiss on February 7, 2002. See Doc # 85. At the March 7, 2002, case management conference, the court determined that the court’s consideration of the issues raised would benefit from a further development of the record and set a hearing date on any summary judgment motions for May 24, 2002. See Doc #90. B The instant action is one of many filed in response to California's attempt to restructure its regulatory scheme for the generation and sale of electricity. As codified in Assembly Bill 1890 (AB 1890), California’s restructuring reflected the CPUC’s determination that: the interests of the ratepayers and the state as a whole will be best served by moving from the regulatory framework *** in which retail electricity service is provided principally by electrical corporations subject to an obligation to provide ultimate consumers in exclusive service territories with reliable electric service at regulated rates, to a framework under which competition would be allowed in the supply of electric power and customers would be allowed to have the right to choose their supplier of electric power. CalPubUtilCode § 330. California’s restructuring scheme involved the creation of two new non-governmental corporations to orchestrate the transmission and sale of electricity, organized under California law but regulated by the Federal Energy Regulatory Commission (FERC): the Independent System Operator (ISO) and the California Power Exchange (PX). Before it ceased operation, the PX operated a continuous state-wide auction, matching bids for the sale and purchase of wholesale electricity.. Bidders of supply into the PX included independent generators of electricity, and other entities that had purchased electricity from such generators for resale. The PX matched these supply bids with requirements for the delivery of electricity, as expressed by demand bids from buyers. Starting in July 1999, a division of the PX, CalPX Trading, operated a block forward market (BFM), an exchange that matched bids to buy specified amounts of power for various time periods with offers to sell power for the same periods in advance of the contracted delivery date. BFMs provided a degree of predictability in the future cost of power. The ISO, which continues to operate, assumed control over the transmission systems of all three of California’s investor-owned utilities (IOUs): PG & E, SCE and San Diego Gas & Electric Co. (SDG & E). The ISO operates the electrical grid for the state and purchases power as neces-. sary to ensure non-discriminatory access and system reliability. Although PG & E continues to own its transmission system, the ISO has operational control. At all times relevant to PG & E’s complaint, if PG & E’s customer demand was not met by scheduled supplies into the PX or other sources, the ISO was required to procure additional electricity to serve PG & E’s requirements and maintain the stability of the grid. See Compl (Doc #1) at ¶ 20. Prior to August 3, 2000, the CPUC required PG & E to procure electricity solely through the PX, unless, as discussed above, PG & E’s customer demand could not be met by the scheduled power supply available on the PX. After August 3, 2000, the CPUC authorized PG & E, and the other California IOUs, to purchase a limited amount of wholesale electricity through bilateral contracts outside the PX and ISO markets, subject to certain restrictions. See Kubitz Decl (Doc # 115) at ¶¶ 4-9. As a consequence of this regulatory change, PG & E has divided its preemption claim into two parts: one concerning the period before August 3 and one concerning the period after. In order for AB 1890 to be implemented and for the PX and ISO to begin operation, the FERC, which has jurisdiction to regulate the sale of electricity in interstate commerce, was required to approve certain filings by the ISO, the PX and the IOUs. Beginning in late 1996, as part of the shift to a competitive electricity market, the FERC granted a series of requests by owners of generation plants, including the IOUs and recent purchasers of plants previously owned by the IOUs, for authorization to sell electricity on the PX and other wholesale markets at market-based rates. PG & E during restructuring would be both a purchaser and a seller of electric wholesale power. Prior to 1996, by contrast, the CPUC regulated nearly every aspect of PG & E’s vertically integrated electricity business. PG & E owned and operated assets used in generation, transmission and distribution of electricity to retail customers. The CPUC established and regulated the retail rates that PG & E could charge its customers, setting these rates at a level sufficient to allow PG & E to recover the costs of generation, transmission, distribution and other ancillary functions, as well as allowing PG & E a reasonable rate of return on its investment in the capital required to perform these functions. In restructuring its electricity markets, California sought to separate the utilities’ vertically-integrated generation, transmission and distribution functions with the goal of providing consumer access to competitively priced generation. On the retail side, this envisioned eventually replacing the regulation of retail rates based on cost and a reasonable rate of return with competitively determined market rates, subject to certain limitations in order to protect certain constituencies. In enacting AB 1890, the California legislature did not effect an immediate transition to this new regime. Rather, California imposed a rate freeze on retail rates during a transition period. This transition period was set to end the earlier of March 31, 2002, or the date that the IOUs recovered so-called “stranded costs.” Addressing stranded costs is a central problem in restructuring electricity markets. Stranded costs are historic investments and contractual obligations of the utilities that exceed the value of the underlying assets in a competitive environment. Examples of stranded costs are the expenses of certain generating plants or long-term power supply contracts that cannot be recovered from customers through competitive electrical prices. Historic investments in transmission lines and facilities, which, in a competitive market must be made available to competitors, are also considered stranded costs. Because such costs were incurred during a period when IOUs operated pursuant to a eost-of-ser-viee regulatory scheme, IOUs would be burdened upon the introduction of a competitive retail market with costs not borne by other entries into the market. Bearing these stranded costs placed IOUs at a competitive disadvantage to electricity generators not similarly saddled with such costs. AB 1890 sought to level the playing field. One way of addressing stranded costs— the route chosen by California — is to allow IOUs a limited opportunity to recover stranded costs before the introduction of competition. It would, of course, be possible to permit such a transition period to extend indefinitely, until stranded costs were completely recovered. This route, however, would delay the introduction of market incentives for an indeterminate period. California’s approach was to introduce both market incentives, in the form of a time constraint, and state mandated retail pricing. Under this regime, PG & E, in theory, had both the opportunity and incentive to maximize its surplus during the transition period. During the transition period, AB 1890 temporarily froze the utilities’ retail rates at the levels in effect on June 10, 1996, subject to a 10% rate reduction for residential and smaller business customers. The rate reduction and retail price freeze was predicated on an assumption that proved in retrospect to be wildly inaccurate: namely, wholesale prices achieved under FERC’s transition to market-based rates would be sufficiently lower than in recent years as to provide “headroom” (i e, excess of retail over wholesale prices). The purpose of this “headroom” was to allow utilities to recover their stranded costs. AB 1890 charged the CPUC with implementing the ratemaking elements of the bill. Among its responsibilities, the CPUC was directed to determine the stranded costs eligible to be recovered during the transition period and the methods by which the utilities could recover their stranded costs. CalPubUtilCode §§ 367-369. Since 1996, the CPUC has issued a series of decisions interpreting AB 1890 and determining the mechanisms for the recovery and accounting of the recovery of stranded costs, as well as the costs of providing electric service during the transition period. The CPUC established two accounts as the primary mechanisms for tracking costs and revenues during the rate freeze. The first, the transition recovery account (TRA), is used to record operating costs and retail revenues. The second, the transition cost balancing account (TCBA), tracks the recovery of stranded costs. During the rate freeze, retail revenue in excess of cost recorded in the TRA is charged to customers, appearing on customer bills as a competitive transition charge (CTC). When the retail rates during the rate freeze exceeded the cost of providing electricity, as was supposed regularly to occur, California customers paid higher energy bills than they would have before the beginning of the transition period, thereby subsidizing the shift to a competitive market. The original accounting rules, promulgated by the CPUC in 1997 in Resolution E-3514, provided that both debit balances (liabilities) and credit balances (headroom) would be transferred from the TRA to the TCBA each month during the rate freeze. See Res E-3514, in DRJN (Doc # 106, Exh F). In 1998, the CPUC adopted Resolution E-3527, which changed this rule retroactively and specified that only credit balances in the TRA would be transferred to the TCBA at the end of each month. See Res E-3527, in DRJN (Doc # 106, Exh G). Under this accounting system, PG & E could pay down its stranded costs in months in which revenues exceeded costs. When revenues from frozen rates were insufficient to cover operating costs recorded in the TRA, however, the TRA account accumulated an “undercollection” which was carried over to the following month for recovery and was not set against previous stranded cost recovery. Defendants assert, and PG & E does not dispute, that in the first two years of the transition period, before the prices of wholesale energy in California soared, PG & E was able to transfer billions of dollars of excess revenues from the TRA to the TCBA, paying down stranded costs. See DefBr (Doc # 104) at 8. Beginning in June of 2000, however, the market-based prices of wholesale electricity in California soared dramatically, setting off a crisis in the California energy market. As wholesale prices soared, PG & E’s ability to pay down the approved stranded costs in the TCBA suffered and instead, PG & E began to accumulate massive deficits in its TRA. Between June 2000 and January 31, 2001, PG & E alleges that its wholesale energy costs exceeded the amount available in frozen retail rates by approximately $8.3 billion. As PG & E began to accumulate crippling debt in order to finance the cost of buying electricity on the expensive wholesale market, PG & E’s credit rating deteriorated. See PlOppBr (Doc # 148) at 7. PG & E defaulted on commercial obligations and ultimately was forced to seek protection from its creditors by filing for bankruptcy on April 6, 2001. PG & E blames its debt and bankruptcy on the CPUC’s refusal to dissolve the rate freeze and raise retail rates concurrently with the spike in electricity wholesale prices. Defendants, on the other hand, contend that PG & E accepted the risk that prices would exceed frozen rates and expressly relied on the existence of that risk in its appeal to the FERC for market-based wholesale pricing. Defendants also contend that PG & E, in fact, did not suffer any total debt during the period of the rate freeze, despite the spike in wholesale prices, and was, in fact, able to pay-down some substantial portion of its stranded costs. This contention is based, in part, on an adjustment by the CPUC in the accounting rules governing the rate freeze, adopted during the energy crisis. In that time frame, specifically, on October 17, 2000, TURN, an advocacy group, filed a petition with the CPUC, requesting that the CPUC modify the accounting rules for tracking PG & E’s recovery of stranded costs and, correspondingly, determining the end of the rate freeze. TURN’S proposal, which it refers to as a “true-up,” would require that, beginning January 1, 1998, both negative and positive balances in the TRA would be transferred to the TCBA on a monthly basis, as opposed to only positive balances (headroom) being transferred. This accounting change was to have a couple of effects. First, it would require excess revenue previously applied to pay down stranded costs instead first to be applied to offset under-collection caused by the soaring prices in the wholesale energy market. Second, by increasing the balance to be paid down in the TCBA in months in which the TRA was undereollected, the TURN accounting change would extend the period of the rate freeze. One effect of the California energy crisis is that it reversed the incentives of some market actors. When AB 1890 was initially approved, PG & E benefited from the transition period, which allowed PG & E an extended opportunity to recover the costs of its historic investments that would otherwise be uneconomic upon an immediate transition to a competitive regime. When the frozen rates became insufficient to cover increasing energy costs, however, PG & E, on the retail side at least, would benefit from an immediate end to the retail rate freeze. As a result, on November 8, 2000, while TURN’S proposal was pending with the CPUC, PG & E filed its initial complaint in this matter, alleging that the CPUC’s actions, including its consideration of the TURN “true-up,” exceeded its authority by fading to allow PG & E to recover its energy procurement costs concurrently in retail rates. During this same period, PG & E repeatedly petitioned the CPUC for rate increases. In November 2000, PG & E sought the CPUC’s approval of an emergency rate stabilization plan, including a proposal to increase retail rates to recover PG & E’s undercollection. After holding emergency hearings and ordering outside audits of PG & E’s financial condition, the CPUC rendered a decision on January 4, 2001, ordering a $.01/kWh emergency surcharge to help pay for future procurement costs. See D01-01-018 in PRJN II (Doc # 117, Exh # 14). On March 27, 2001, the CPUC issued D01-03-082, which is the central CPUC decision challenged by PG & E. See D01-03-082 in PRJN II (Doc # 117, Exh # 12). This decision approved a further $.03/kWh surcharge increase for the electric utilities’ retail rates. More significantly for present purposes, however, D01-03-082 also adopted the TURN proposal for the accounting “true-up.” As a result, the CPUC modified its current accounting rules to require that each month the balance in the TRA be transferred to the TCBA, whether positive or negative. See id. at 30. The effective date of the accounting changes was January 1, 1998, the date when Resolution E-3527 took effect. In enacting the decision, the CPUC noted that, in retrospect, the accounting rules of Resolution E-3527 contravened the principles of AB 1890, and that the “true-up is necessary to correct inequities in the current accounting rules which make it appear that the utilities have fully collected their stranded capital costs, while at the same time recording monthly liabilities of billions of dollars in operating costs.” Id. at 28. The true-up accounting decision is central to the instant dispute as it requires PG & E, in general terms, to set its total losses against its total revenues before applying any surplus revenue to paying down its stranded costs. Besides resulting in the recovery of fewer stranded costs, therefore, the enactment of this decision was likely to extend the period of the rate freeze. As the decision was adopted during the wholesale price spike, PG & E was understandably against its adoption. Judge Lew dismissed PG & E’s original complaint largely because D01-03-082 was not yet final. After this decision became final, PG & E re-filed its complaint, with minor adjustments. In its complaint, PG & E alleges that state law, as interpreted and applied by defendants, commissioners of the CPUC, caused it severe financial harm. Compl (Doc # 1) at ¶ 2. PG & E seeks injunctive and declaratory relief to prevent and restrain defendants from “continuing to violate federal law by denying PG & E recovery of its wholesale electricity procurement and transmission costs in retail rates.” Id. at ¶ 3. PG & E’s complaint is built on its preemption claims, which place heavy reliance on a somewhat esoteric, although tremendously important, regulatory doctrine: the “filed rate doctrine.” In particular, PG & E argues that because its electricity costs were incurred pursuant to rate schedules filed with the FERC, the CPUC was required, effectively, to end the rate freeze and raise retail rates once wholesale costs exceeded frozen rates. PG & E also alleges that defendants’ actions violate the Takings Clause of the Constitution, the Due Process Clause and the Commerce Clause. II Before addressing the substance of the summary judgment motions, the court must first address several preliminary matters. A First, the court must address TURN’S motion to intervene (Doc # 18), filed concurrently with its motion to dismiss. Doc #20. TURN is a nonprofit organization that is, in its words, “devoted to protecting the interests of residential and small-commercial consumers of electricity, natural gas and telephone services.” TURN Inter Br (Doc # 18) at 1-2. TURN has been an active participant in the proceedings forming the basis of PG & E’s lawsuit, as well as all litigation stemming from these proceedings. TURN played an active role in the debate over AB 1890, both before and after its enactment. Id at 2. Although TURN generally opposed the CPUC’s decision to restructure the energy market, as AB 1890 legislation became inevitable, TURN redirected its efforts to push for the inclusion of rate relief for consumers and small business as part of the restructuring. Id at 3. PG & E filed a statement of non-opposition to TURN’S motion to intervene. This statement, however, amounts only to a non-opposition to TURN’S motion to the extent TURN seeks to intervene permissively pursuant to FRCP 24(b). Doc # 44. In fact, PG & E opposes TURN’S motion to intervene as of right, pursuant to FRCP 24(a), relying largely on the contention that Judge Lew’s decision that TURN may only permissively intervene precludes TURN from intervening as of right in this matter. The court will not, however, apply collateral estoppel to TURN’S motion. When Judge Lew ruled on TURN’S motion to intervene, the accounting changes advocated by TURN had not yet been finally implemented. FRCP 24(a) establishes four requirements for intervention as of right: timeliness; an interest relating to the subject matter of the action; practical impairment of the party’s ability to protect that interest; and inadequate representation by the parties to the suit. Idaho Farm Bureau Fed’n v. Babbitt, 58 F.3d 1392, 1397 (9th Cir.1995), citing United States v. Oregon, 913 F.2d 576, 587 (9th Cir.1990). TURN moved to intervene less than two months after the filing of PG & E’s complaint in this matter, before discovery began or the court made any substantive rulings. TURN’S motion is timely. See e.g., Idaho Farm, 58 F.3d at 1397. “A public interest group is entitled as a matter of right to intervene in an action challenging the legality of a measure it has supported.” Id., citing Sagebrush Rebellion, Inc. v. Watt, 713 F.2d 525, 527 (9th Cir.1983); Washington State Bldg. & Constr. Trades Council v. Spellman, 684 F.2d 627, 630 (9th Cir.1982). Beyond supporting the measures in dispute, TURN was the acknowledged author and leading proponent of the true-up proposal, adopted in D01-03-082, which is one of the central actions by the CPUC challenged by PG & E. TURN has an interest relating to the subject of the present litigation. The present action could substantially affect TURN’S interest as the disposition of the present action could substantially affect the electrical rates charged to consumers and small business owners. Finally, the court determines that TURN is not adequately represented by defendants. The burden of making this showing is minimal. See e.g., Sagebrush Rebellion, 713 F.2d at 528, citing Trbovich v. United Mine Workers, 404 U.S. 528, 538 n. 10, 92 S.Ct. 630, 30 L.Ed.2d 686 (1972). As evidenced by TURN’S adaptation of positions relative to the actions taken by the CPUC, TURN and the CPUC do not have coextensive interests and serve different, if overlapping, constituencies. As a result, the court grants TURN’S motion to intervene as of right, pursuant to FRCP 24(a). In the alternative, the court grants TURN permission to intervene permissively, pursuant to FRCP 24(b). B The parties have requested that the court take judicial notice of an assortment of documents. See Does##106 and 116. With respect to documents not referenced in PG & E’s complaint, the court may take judicial notice of adjudicative facts, which are those to which the law is applied in the process of adjudication. See Adv Notes to FRE 201. A judicially noticed fact may not be subject to reasonable dispute and must be relevant. See FRE 201(b). “A judicially noticed fact must be one not subject to reasonable dispute in that it is either (1) generally known within the territorial jurisdiction of the trial court or (2) capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned.” Id. The court may take judicial notice of pleadings, orders and statutes from other jurisdictions, including agency decisions, if the documents are public records and subject to confirmation by sources that cannot reasonably be questioned. See e.g., United States ex rel Robinson Rancheria v. Borneo, Inc., 971 F.2d 244, 248 (9th Cir.1992). The only challenge to documents submitted for judicial notice is brought by defendants, who argue that the court should decline to take judicial notice of the stipulated judgment and settlement agreement, see PRJN II (Doc # 117, Exh # 39), between defendants and SCE in a related action in the Central District of California. Doc # 142. Defendants argue that settlement agreements and related documents are inadmissable under FRE 408, which provides: Evidence of (1) furnishing or offering or promising to furnish, or (2) accepting or offering or promising to accept, a valuable consideration in compromising or attempting to compromise a claim which was disputed as to either validity or amount, is not admissible to prove liability for or invalidity of the claim or its amount. Evidence of conduct or statements made in compromise negotiations is likewise not admissible. One of the principles underlying FRE 408 is that evidence of a settlement is generally not relevant, because settlements may be motivated by a variety of factors unrelated to liability. See Hudspeth v. CIR, 914 F.2d 1207, 1213-14 (9th Cir.1990). The court agrees with defendants that documents relating to the settlement between defendants and SCE are not relevant to the instant dispute and, therefore, the court declines to take judicial notice of exhibit # 39 to PG & E’s second set of request for judicial notice. All other documents submitted for judicial notice, however, meet the requirements of FRE 201(b) as they are not subject to reasonable dispute and are in the official public records of the CPUC, the California legislature, federal agencies or federal courts and the court will take judicial notice of them. C PG & E advances a series of evidentiary objections. First, PG & E objects to the declaration of Douglas Long (Doc # 105), submitted in support of defendants’ motion for summary judgment. Doc # 151. PG & E also objects to the declaration of Matthew Freedman (Doc # 121), submitted in support of TURN’S motion. Doc # 151. Long is the program manager of the CPUC’s energy division. Long Decl (Doc # 105) at ¶ 1. Long’s declaration discusses the enactment of AB 1890, various CPUC decisions, the accounting true-up and other elements of the rate freeze generally. PG & E objects to Long’s declaration on the basis of lack of personal knowledge and lack of foundation. This objection (Doc # 151) is DENIED. Long sets forth the foundation of his statements. Long was personally involved in many aspects of CPUC activities for a number of years and, pursuant to the broad conception of “expert” embodied in FRE 702, Long appears qualified to testify as witness knowledgeable about the regulatory and accounting aspects of electrical generation, transmission and marketing. See Thomas v. Newton International Enterprises, 42 F.3d 1266, 1269 (9th Cir.1994). Long’s declaration is, however, argumentative and not very helpful on the issues the court must decide. For example, Long argues that PG & E supported enactment of AB 1890. The import of any such support on the issues at bar is not apparent; CPUC evidently also supported this legislation. That the scheme enacted by AB 1890 turned out badly may well bear on the issues to be decided, but why PG & E’s (or the CPUC’s) support for the legislation matters is not readily discerned and Long’s declaration does not enlighten the reader. Furthermore, Long’s declaration advances legal conclusions as assertions of fact. Most notable in this regard is Long’s contention that “AB 1890 only afforded the utilities an opportunity to recover their stranded costs, not a guarantee ***,” (Doc # 105 at ¶ 15), which Long seems to suggest should be the conclusion dx-awn by this court on the legal issues hei'e. These reservations aside, the court will overrule PG & E’s evidentiary objections as it has considered the Long declaration for what evidentiary value it may have. PG & E similarly seeks to" strike Freedman’s declaration (Doc # 121). Freedman summarizes PG & E’s regulatory filings in support of TURN’S contention that PG & E, in fact, recovered its wholesale procurement costs over the period of the rate freeze. PG & E contends that because Freedman did not make these regulatory filings himself, he is not competent to testify about them on the basis of his personal knowledge. Freedman’s declaration is highly conclusory and seeks to have the court accept a number of matters that appear to the court to be in dispute. Although Freedman’s declaration is not helpful for these reasons and PG & E’s objection appears to result from its concern with Freedman’s conclusions about the evidence, not a proper ground for objection, PG & E’s objection to Freedman’s declaration will be DENIED, notwithstanding the court’s determination that this declaration contributes little, if anything, of value. PG & E also moves to strike four declarations submitted by defendants and TURN in opposition to PG & E’s motion. Doc # 167. PG & E moves to strike the declaration of Peter Bradford (Doc # 155). Although Bradford’s declaration does contain some facts and some opinions about utility restructuring generally that could qualify as opinions, Bradford’s declaration simply expands TURN’S legal argument that the filed rate doctrine does not, as a legal matter, apply to California’s rate freeze. Because this declaration primarily contains legal argument rather than evidentiary matter, PG & E’s motion to strike Bradford’s declaration (Doc # 167) is GRANTED. Similarly, the declaration of Michael Florio (Doc # 156), a staff attorney for TURN, contains little more than an elaboration of TURN’S legal arguments about the proper time period over which to consider whether PG & E has recovered its costs and the regulatory bargain to which PG & E allegedly agreed. If such “expert” testimony were permitted, the page requirements for briefs filed with the court would become, effectively, moot. PG & E’s motion to strike Florio’s declaration (Doc # 167) is also GRANTED. PG & E also objects to the declaration of James Loewen. Loewen’s declaration discusses the procurement options available to PG & E in the block forward market. See Loewen Decl (Doc # 138). Again, PG & E’s objections to Loewen’s declaration appear driven by a disagreement with his conclusions and while Loewen’s declaration is unhelpful, it does contribute some factual information to place the issues in context. Accordingly, PG & E’s motion to strike Loewen’s declaration (Doc # 167) is DENIED. PG & E also contends that Long’s declaration in support of defendants’ opposition (Doc # 137) is vague and conclusory. Again, this is little more than an attack on Long’s statements. The motion to strike Long’s declaration (Doc # 167) is DENIED. In the main, the declarations and objections are a distracting side show to the central matters at bar. The court hopes that as this litigation proceeds the parties will avoid submissions of lengthy and tendentious declarations that are little more than legal arguments masquerading as factual assertions. Defendants seek to file the declaration of David E Effross under seal, as it contains information designated as confidential by PG & E. Doc # 140. For good cause shown, this motion (Doc # 140) is GRANTED. The clerk is directed to file the lodged document under seal. Finally, the parties’ stipulated protective order (Doc # 103) is hereby ENTERED. III PG & E moves for summary judgment on its first and second claims for relief. In these claims, PG & E asserts that state law, as interpreted and applied by the CPUC is preempted to the extent it prohibits PG & E from recovering in retail rates expenses incurred in procuring and providing electricity. See Compl (Doc # 1) at ¶¶ 60-78. Claim one asserts preemption prior to August 3, 2000, and claim two asserts preemption from August 3, 2000, through January 19, 2001. The significance of the August 3 date is that on August 3, 2000, the CPUC granted limited authorization for PG & E and the other utilities to enter into contracts for the purchase .of wholesale energy outside the PX. Defendants move for summary judgment on PG & E’s complaint or, in the alternative, on PG & E’s preemption claims. Doc # 104. Attempting fully to cover their bases, defendants have also filed a FRCP 56(f) request to continue PG & E’s motion for judgment on its preemption claims. Doc # 143. In this motion, defendants contend that if the court is not prepared to deny PG & E’s motion, the court should permit defendants to conduct more discovery on PG & E’s ability to procure electricity through cheaper sources, under the so-called Pike County exception to the filed rate doctrine. See Pike County Light & Power Co. v. Pennsylvania Pub. Util. Comm’n, 77 Pa.Cmwlth. 268, 465 A.2d 735 (1983). TURN moves for summary judgment on PG & E’s complaint, although its motion is, like that of the other parties, overwhelmingly directed at PG & E’s preemption claims. Doc # 119. The state of California has also filed an amicus brief in support of defendants’ motion for summary judgment. Doc # 110. A The court first notes that in their pending motion to dismiss (Docs ## 24 and 77), defendants argued that PG & E’s complaint was barred by the doctrine of state sovereign immunity. “Though not jurisdictional in the traditional sense,” sovereign immunity defenses usually represent a threshold issue, to be reviewed before considering other non-jurisdictional defenses. Agua Caliente Band of Cahuilla Indians v. Hardin, 223 F.3d 1041, 1045 (9th Cir.2000). In this instance, however, the court finds it appropriate to address PG & E’s preemption claims before considering in detail defendants’ state sovereign immunity defense, because the court’s determination of the validity of PG & E’s preemption claims will greatly inform the court’s determination of the validity of defendants’ assertion of state sovereign immunity. Pursuant to the Supreme Court’s analysis of state sovereign immunity in Idaho v. Coeur d’Alene Tribe, 521 U.S. 261, 117 S.Ct. 2028, 138 L.Ed.2d 488 (1997), as interpreted by the Ninth Circuit, in considering whether the Ex parte Young, 209 U.S. 123, 28 S.Ct. 441, 52 L.Ed. 714 (1908), exception to state sovereign immunity applies, the court must examine, among other things, the intrusiveness of the relief requested by PG & E. Moreover, in general, a valid claim that state officials are engaging in ongoing behavior in violation of or preempted by federal law will fall within the Ex parte Young exception to state sovereign immunity. See, e.g., Green v. Mansour, 474 U.S. 64, 68, 106 S.Ct. 423, 88 L.Ed.2d 371 (1985) (“the Eleventh Amendment does not prevent federal courts from granting prospective injunctive relief [against state officials] to prevent a continuing violation of federal law.”). See also Duke Energy Trading & Mktg. LLC v. Davis, 267 F.3d 1042, 1052-1055 (9th Cir.2001). It would not make sense, however, to permit a plaintiff to bring a suit against state officials in federal court that would otherwise be barred, merely by pleading a meritless preemption claim. In this case, therefore, a determination of the merits of defendants’ state sovereign immunity defense requires a pri- or consideration of the substance and merit of PG & E’s preemption claims. Similarly, in their motion to dismiss, defendants contend that the Johnson Act, 28 USC § 1342, bars the award of PG & E’s requested relief. The Johnson Act provides: The district courts shall not enjoin, suspend or restrain the operation of, or compliance with, any order affecting rates chargeable by a public utility and made by a State administrative agency or a ratemaking body of a State political subdivision, where: (1) Jurisdiction is based solely on diversity of citizenship or repugnance of the order to the Federal Constitution; and (2) The order does not interfere with interstate commerce; and (3) The order has been made after reasonable notice and hearing; and (4) A plan, speedy and efficient remedy may be had in the courts of such State. A preemption claim based on the filed rate doctrine is not based solely on repugnance to the Supremacy Clause of the Constitution, but also to a statutory provision, the Federal Power Act, as well as a federal agency determination. If such a claim is valid, therefore, the Johnson Act poses no impediment to the award of an injunction. See, e.g., Public Serv. Co. v. Patch, (Patch V), 167 F.3d 29, 33 (1st Cir.1998). If PG & E’s preemption claims are unmeritorious, however, the Johnson Act may well pose a formidable hurdle to PG & E’s success on its remaining causes of action. Defendants’ abstention arguments, too, will become more or less persuasive depending on the court’s determination of the viability of PG & E’s preemption claims. See Public Serv. Co. v. Patch, (Patch VII), 221 F.3d 198, 203 (2000). For these additional reasons, therefore, a thorough consideration of PG & E’s preemption claims must take precedence to the resolution of PG & E’s other claims, as well as to the court’s estimation of many of the strongest defenses advanced by defendants and TURN. PG & E’s «preemption claims are, in fact, potentially dispositive; if they fail, PG & E’s complaint will face formidable obstacles. Defendants’ sovereign immunity arguments become forceful absent a valid filed rate claim. The Johnson Act erects a formidable hurdle and abstention arguments gain force under those circumstances. But if preemption claims have merit, these defenses largely fade away. B PG & E’s preemption claims require the court to consider application of the “filed rate doctrine,” a regulatory doctrine with a lengthy historical pedigree, to a contemporary regulatory context, in which the continuing application of this doctrine is less than obvious. The regulatory context in which the actions giving rise to this lawsuit occurred involved substantial cooperation between federal and state regulators, each operating largely within their respective sphere of regulatory jurisdiction, in an attempt to restructure the market for electricity and make this market, among other things, less reliant on traditional public utility rate-making. As discussed above, one of the central goals of this restructuring was to expose wholesalers of electricity and providers of electricity to the competitive forces of the market. As amply evinced in California’s attempt to achieve this exposure, one great virtue of markets is their ability to defy conventional norms. The increased efficiency and reduced prices associated with competition comes as a result of exposure to risk. Whether the exposure to the risk of energy price fluctuations is desirable in the context of electricity is a matter for debate among policymakers and whether federal law forbids state regulators from requiring a utility to sell electricity at rates below wholesale costs sanctioned under federal law is the central legal question before the court. The filed rate doctrine, which governs the relationship between service providers and end-users in regulated industries, dates back to the nineteenth century. The doctrine developed in the context of the regulation of interstate railroads, in the years after the Civil War, when a developing interstate railroad system dominated interstate commerce. This dominance, in turn, resulted in widespread discontent with railroad carriers, who were accused of using market power to charge discriminatory rates and to wield immoderate economic influence in transportation and other markets. This discontent produced a rich and colorful literature. See, e.g., Frank Norris, The Octopus (Penguin Books, 1901); Ida M Tarbell, The History of the Standard Oil Company (McClure, 1904). Eventually this discontent gave birth to legislation and regulation. A railroad, of course, enjoys certain locational advantages and, to the extent alternative routes for the carriage of goods (and, in an earlier era, people, as well) are unavailable, certain features of a monopoly. A persistent construct underlying legislation and early regulation of railroads was the notion that prices should reflect the cost of producing the services subject to such regulation. From this construct flows the notion of “price discrimination.” If alternative routes were unavailable, a monopoly carrier “is likely to fix different prices to different purchasers depending not on the costs of selling to them, which are the same, but on the elasticity of their demands for [service]. This is price discrimination.” R Posner, Economic Analysis of Law, 4th Edl992, § 9.4 at 281. Focusing on costs, it seemed “discriminatory” to charge a shipper more for moving goods from Elk-hart to Chicago than from New York to Chicago unless, of course, the carrier could establish cost savings associated with greater traffic densities for the latter services. Associated with this were other arrangements thought to represent market dysfunction, including “a wide variety of kickbacks, gratuities, and other devices that agitated much of the public.” Kearney & Merrill, 98 ColumLRev at 1883 (cited in note 2). Even “[m]ore importantly, some railroads simply entered the business of buying and selling products. In such cases, railroad carriers could grant themselves discounts on shipments and obtain either a competitive advantage over suppliers of the same goods or an outright monopoly in the market for those products.” Johnson, 68 AmBankrLR at 321 (cited in note 2). In response to the appearance of monopoly abuses and widespread price discrimination, Congress passed the Interstate Commerce Act of 1887(ICA), the first major federal regulatory statute in the United States and the model for future regulation of common carriers and, in due course, public utilities. The purpose of the ICA, as articulated by the Supreme Court not long after its enactment, was to: secure equality of rates as to all, and to destroy favoritism, these last being ac- , complished by requiring the publication of tariffs, and by prohibiting secret departures from such tariffs, and forbidding rebates, preferences, and all other forms of undue discrimination. NYNH v. Hart, 200 U.S. 361, 391, 26 S.Ct. 272, 50 L.Ed. 515 (1906). The ICA placed the railroad industry under the regulatory authority of the Interstate Commerce Commission (ICC), the nation’s first major regulatory agency. The first formulation of what became known as the “filed rate doctrine” was found in § 6(7) of the ICA: [W]hen any such common carrier shall have established and published its rates, fares, and charges in compliance with the provisions of this section, it shall be unlawful for such common carrier to charge, demand, collect, or receive from any person or persons a greater or less compensation for the transportation of passengers or property, or for any services in connection therewith, than is specified in such published schedule of rates, fares, and charges as may at the time be in force. ICA, ch 104, § 6(7), 24 Stat 379, 381 (1887). This requirement — that regulated providers charge end-users only the rate on file with the appropriate regulatory agency — is, at its essence, the filed rate doctrine, from which all other variations and applications flow. As noted, the ICA and the filed rate doctrine expressed therein became the prototype for subsequent regulation by Congress of a range of other industries. By 1938, Congress had applied this model to the interstate components of the shipping, stockyard, telephone, telegraph, trucking, electric, gas and aviation industries, reflecting a consensus that heavy government oversight of such industries and published, managed pricing was the appropriate means to achieve the goals of reasonable prices, non-discrimination and reliability. See Kearney & Merrill, 98 Co-lumLRev at 1334 (cited in note 2). With experience, these regulatory regimes produced numerous regulatory failures rivaling or exceeding dysfunctions in markets. One by one in each of these industries the consensus that favored heavy governmental oversight has broken down. The role of private actors, the market and government regulators have all been re-evaluated. The railroad, airline, motor carrier and telecommunications industry, among others, have witnessed fitful moves to one form of deregulation or the other beginning in the 1970s with the airline industry. The instant dispute, similarly, results from the joint determination of state and federal regulators to move toward competition, in this case in the generation, transmission and sale of electricity. Historically, the filed rate doctrine’s primary application has been to prevent price discrimination. In the case of common carrier regulation, such discrimination was perceived if large suppliers and shippers negotiated discounted fares or tariffs. This, of course, was seen as a classic route to monopoly. See, e.g., Standard Oil Co. v. United States, 221 U.S. 1, 32-33, 31 S.Ct. 502, 55 L.Ed. 619 (1911) (“[T]he bill alleged that the combination and its members obtained large preferential rates and rebates in many and devious ways over their competitors from various railroads companies, and that by means of the advantage thus obtained many, if not virtually all competitors were forced either to become members of the combination or were driven out of business ***.”). The requirement that regulated carriers charge and receive only the filed rate has been consistently and rigidly applied, with, at times, somewhat counter-intuitive results. In Louisville & Nashville Railroad Co v. Maxwell, 237 U.S. 94, 35 S.Ct. 494, 59 L.Ed. 853 (1915), for example, a passenger negotiated a ticket for a rate of $49.50, although the published rate for the route was $78.65. After discovering this error, the railroad sued the passenger for the difference and the Supreme Court upheld an award against the passenger, declining to countenance any deviation from the filed rate. Early regulation of public utilities at the federal and state level was motivated more by the goal of preventing undue price discrimination than by the fear of high prices. 1 AJG Priest, Principles of Public Utility Regulation, 285, 289 (Michie, 1969) (“Prevention of discrimination has been a vital regulatory function since federal and state statutes which deal with ‘natural monopolies’ first acquired teeth. *** Even exorbitant rates probably have generated less irritation and exasperation than discriminatory practices. *** Discrimination raises its grizzly head both when utility service is sold to a large consumer at less than cost and when any charge or practice imposes unreasonable burdens on other customers.”). Especially in the case of electricity regulation, the filed rate doctrine came to have a subsidiary application demarking the boundary between federal and state regulatory authority. Early on, electricity generation, transmission and sale were almost exclusively confined to one locality and, in this regard, electricity generation, transmission and sale differed from, say, rail transportation which by the time it came under regulatory purview was largely interstate in character. The ability, developed on a large scale in the past few decades, to transmit electricity beyond state boundaries at low cost demanded federal as well as state action if electricity were to maintain under effective regulatory control. Federal policy fostered the availability of electricity generated at widely dispersed locations and from many sources. See Public Utility Regulatory Policies Act, PubL 95-617 § 2, Nov 9, 1978, 92 Stat 3117, codified at 16 USC § 2601 et seq and Powerplant and Industrial Fuel Use Act, PubL 95-620, Title I, § 102, Nov 9, 1978, 92 Stat 3291, PubL 100-42 § 1(c)(1), May 21, 1987, 101 Stat 310, codified at 42 USC § 8301 et seq. The filed rate doctrine came to assist in setting the boundaries of the respective spheres of regulation over the increasingly multifaceted generation, transmission, distribution and sale of electricity. The filed rate doctrine operates in the electricity context to ensure that rates charged for wholesale electricity are on file with and approved by federal regulators; but, perhaps more importantly, the doctrine also operates to prevent state regulators, as well as courts, from taking action that fails in any manner to account for the fact that in most instances today a utility must purchase the power delivered to consumers pursuant to the rate filed with the appropriate federal agency. Regulatory jurisdiction over electricity is divided by federal law into two rather arbitrary spheres of authority: states have regulatory authority over retail sales of electricity and the federal government has authority over interstate, i.e. wholesale, sales. This scheme for dual authority is codified in the Federal Power Act (FPA), 16 USC §§ 824-824m. As the Supreme Court has observed, in an oft quoted phrase, in the FPA, “Congress meant to draw a bright line easily ascertained, between state and federal jurisdiction.” Nantahala Power & Light Co. v. Thornburg, 476 U.S. 953, 966, 106 S.Ct. 2349, 90 L.Ed.2d 943 (1986), quoting FPC v. Southern Cal. Edison Co., 376 U.S. 205, 215-16, 84 S.Ct. 644, 11 L.Ed.2d 638 (1964). “This was done in the Power Act by making [FERC] jurisdiction plenary and extending it to all wholesale sales in interstate commerce except those which Congress has made explicitly subject to regulation by the States.” Id. Under this scheme, individual states are empowered to regulate retail sales as well as local distribution services involving electric power, but may not intrude on the federal government’s plenary power to regulate interstate transmission and wholesale sales of electricity in interstate commerce. The federal government exercises its jurisdiction by delegating authority to the FERC, which has exclusive jurisdiction over all facilities for interstate transmission and sale of electric energy. Pursuant to this grant of jurisdiction, FERC has the authority to regulate the rates, terms and conditions of interstate transmission, transportation and wholesale sales by nongovernmental entities. Under the FPA, all rates for the transmission and sale of wholesale electricity must be filed with FERC and published for public review. 16 USC § 824d(c). FERC has the obligation to ensure that all such rates are just and reasonable, § 824d(a), and are applied in a non-discriminatory manner. The filed rate doctrine, in the electricity context, results from FERC’s responsibility for setting and ensuring compliance with just and reasonable rates of wholesale electricity sale and transmission. At a high level of generality, the filed rate doctrine prevents actors from failing to adhere to the wholesale electricity rates filed with FERC. This prohibition applies to both private and governmental parties. Wholesale electricity suppliers are prohibited from charging anything other than the filed rate; utilities purchasing wholesale energy for re-sale are prohibited from negotiating a different price or entitlement to allocation. But, as will be further discussed below, courts, both state and federal, are prohibited from considering any rate other than that filed with FERC to be the appropriate wholesale rate.' And more significantly for present purposes, state regulators, when setting retail rates, are prohibited by the filed rate doctrine from considering any rate other than that filed with FERC as a reasonably incurred wholesale cost. The filed rate doctrine, in conjunction with its corollary, the rule against retroactive ratemaking, also imposes restrictions on FERC’s actions. Because a utility may charge only the rates that are on file, even if FERC subsequently determines that those rates were unreasonable, FERC generally may not order retroactive refunds. See 96 FERC ¶ 61,120 at 61,505 (2001). In all these applications, however, the filed rate doctrine is basically the same in the electricity context as in every other: the filed rate, and no other, must be charged and this charge must be considered valid. Because the filed rate doctrine is a product of federal regulatory jurisdiction staked out in the FPA, judicial enforcement of the filed rate doctrine is “a matter of enforcing the Supremacy Clause.” Nantahala Poioer & Light, 476 U.S. at 963,106 S.Ct. 2349. The application of the doctrine by the Supreme Court in several seminal cases further clarifies the typical reach of the doctrine when applied by federal courts. “As developed for the purposes of the Federal Power Act, the ‘filed rate’ doctrine has its genesis in Montana-Dakota Utilities Co. v. Northwestern Public Service Co., 341 U.S. 246, 251-52, 71 S.Ct. 692, 95 L.Ed. 912 (1951).” Nantahala Power & Light, 476 U.S. at 962, 106 S.Ct. 2349. In Montana-Dakota, two power companies, with interlocking directorate and joint corporate officers, each purchased power from the other at rates the Federal Power Commission (FPC), FERC’s predecessor, determined were reasonable. After the companies’ management separated, one company sued the other in federal court, asserting that it had been paid unreasonably low rates for the electricity that it provided. In dismissing the claim, the Supreme Court held that Congress had given the FPC the exclusive right to determine reasonable rates: We hold that the right to a reasonable rate is the right to the rate which the Commission files or fixes, and that, except for review of the Commission’s orders, the court can assume no right to a different one on the ground that, in its opinion, it is the only or the more reasonable one. Montana-Dakota, 341 U.S. at 251-52, 71 S.Ct. 692. Since Montana-Dakota, the Court has applied the filed rate doctrine to preclude not only federal court review of FERC reasonableness determinations but also to preclude state court review. See e.g., Arkansas Louisiana Gas Co. v. Hall, 453 U.S. 571, 101 S.Ct. 2925, 69 L.Ed.2d 856 (1981). Subsequently, in Nantahala Power & Light, the Court held that just as courts could not fail to give binding effect to a FERC determination of reasonable rates, so too were state agencies prohibited from concluding that FERC-approved wholesale rates were unreasonable. In Nantahala Power & Light, the Court considered the preemptive effect of a FERC order that reallocated the respective shares of two affiliated companies’ entitlement to low cost power. Under an agreement between two affiliated companies, Nantahala, a public utility, was allocated 20% of the low cost power purchased from the Tennessee Valley Authority (TVA), while the other company, Tapoco, received 80% of the low cost power. Determining that this agreement was unfair to Nantahala, FERC ordered Nantahala to file a new wholesale rate schedule based on an entitlement to 22.5% of the low cost power purchased from the TVA. In a subsequent retail rate proceeding, however, the Utilities Commission of North Carolina (NCUC) reexamined FERC’s determination and ordered Nantahala to calculate its costs for retail ratemaking purposes as though it had received 24.5% of the low cost power. As a result, Nantahala was forced to incur costs of procuring wholesale power that it could not recover through its retail rates. The Court determined that the NCUC’s allocation was preempted by federal law, holding that: Once FERC sets [a wholesale] rate, a State may not conclude in setting retail rates that the FERC-approved wholesale rates are unreasonable. A State must rather give effect to Congress’ desire to give FERC plenary authority over interstate wholesale rates, and to ensure that the States do not interfere with this authority. Id. at 966,106 S.Ct. 2349. In broad terms, the Court also noted that the filed rate doctrine was violated when a purchaser of wholesale electricity is required to sell that electricity at less than the purchase price: The filed rate doctrine ensures that sellers of wholesale power governed by FERC can recover the costs incurred by their payment of just and reasonable FERC-set rates. When FERC sets a rate between a seller of power and a wholesaler-as-buyer, a State may not exercise its undoubted jurisdiction over retail sales to prevent the wholesaler-as-seller from recovering the costs of paying the FERC-approved rate. *** Such a “trapping” of costs is prohibited. Id. at 970,106 S.Ct. 2349. In Mississippi Power & Light Co. v. Mississippi (MP & L), 487 U.S. 354, 108 S.Ct. 2428, 101 L.Ed.2d 322 (1988), the Court reaffirmed that the filed rate doctrine also applies to FERC determinations of the proper allocation of wholesale power. FERC required the Mississippi Power & Light Company (MP & L) to purchase 33% of the plant’s output at rates determined by FERC to be just and reasonable. The Mississippi Public Service Commission (MPSC) subsequently granted MP & L an increase in its retail rates to cover its required purchases. On appeal, however the Mississippi Supreme Court held that it was error for the MPSC to grant such an increase in rates without first conducting a prudence inquiry into the reasonableness of the rates. In reversing, the Supreme Court held that such a prudence inquiry was preempted by the FERC’s determination that the rates set were reasonable. Although Montanar-Dakota Utilities, Nantahala Pmver & Light and MP & L well illustrate the basic contours of the filed rate doctrine as applied by federal courts in the electricity context, the principles of these cases do not seamlessly translate to the present dispute. The classic model for regulating the relationship between providers and end-users of electricity, which provided the backdrop for all these cases, involves (1) an initial FERC determination of a reasonable price for and/or allocation of entitlement to wholesale energy and (2) a subsequent state determination of the permissible retail rate charged to end-users, based on the cost incurred pursuant to the FERC-filed rate, ancillary costs and a reasonable rate of return. This model is often referred to as a “cost-of-service” regulatory regime. In a cost-of-service regulatory regime, the typical application of the filed rate doctrine is relatively straightforward: when setting retail rates, state regulators may not determine that costs incurred pursuant to a FERC-filed rate were unreasonable and set retail rates as if the full cost of wholesale energy had not been incurred. As noted, however, the cost-of-service model has fallen from favor. At the time of restructuring, electricity rates in California were approximately twice the national average. See 93 FERC ¶ 61,121 at 61,351 (2000). AB 1890 was intended as a step towards a “market-based” regulatory regime, in which neither wholesale nor retail rates would be, after the transition period, ordained by regulators, but determined by market forces. This new regime, it was thought, would bring California’s electricity rates more in line with average rates. Defendants and TURN stress that the typical process of reg