Ames v. Public Utilities Commission, 197 Cal. App. 4th 1411

Ames petitions review of California PUC decisions approving utility demand response budgets for 2009–2011 totaling $349,509,463.
Ames proposed a Thermal Energy Storage program (Transphase) with large incentives to deploy permanent load shifting.
The Commission analyzed multiple factors and approved a broad set of demand response programs but rejected Ames’s proposal for funding his specific plan.
Decision No. 09-08-027 rejected Ames’s standard-offer incentive approach as potentially excessive and not clearly cost-effective.
Decision No. 10-03-023 reaffirmed the previous findings and declared that §454.5 and related statutes do not compel adoption of Transphase.
The court upheld the Commission’s findings as supported by substantial evidence and affirmed the decisions.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Statutory interpretation of §454.5(b)(9)(C)	Ames argues cost-effectiveness requires adoption	PUC says §454.5 applies to procurement plans, not isolated proposals	Not required to adopt Transphase; procurement plan scope controls
Cost-effectiveness sufficiency of Ames’s proposal	Record shows cost-effectiveness and reliability	Record shows questions remain; not clearly cost-effective	Finding supported by substantial evidence; not obligated to adopt
Impact of potential overcompensation/double dipping	Incentives were appropriately justified	Overpayment risk warranted Commission scrutiny	PUC reasonably limited funding to avoid windfalls; rejection upheld
Relevance of §454.55 to Ames’s claim	Section 454.55 supports efficiency targets including storage	Section 454.55 not controlling Ames’s proposal	Not controlling; does not require adoption of Transphase

Greyhound Lines, Inc. v. Public Utilities Comm., 68 Cal.2d 406 (Cal. 1968) (PUC decisions reviewed for statutory relation to purpose)
Southern California Edison Co. v. Peevey, 31 Cal.4th 781 (Cal. 2003) (PUC rate/regulatory power given broad latitude)