This excerpt taken from the PCG 10-K filed Feb 18, 2005.
9. INCENTIVES AND PENALTIES
Any incentives and penalties relating to this Appendix shall be established in accordance with the Transmission Control Agreement, the ISO Tariff and ISO Protocols after consultation between the PTO and the ISO, and approval by the FERC. No incentives, penalties or sanctions may be imposed relating to this Appendix unless a Schedule providing for such incentives, penalties or sanctions has first been filed with and made effective by the FERC. Nothing in this Appendix shall be construed as waiving the rights of the PTO to oppose or protest any incentive, penalty or sanction proposed by the ISO to the FERC or the specific imposition by the ISO of any FERC-approved penalty on the PTO.