2. Background

Stanford filed its Application for Modification of Decision (D.) 03-04-030 in accordance with Rule 16.4 on October 18, 2011, and served a copy on Pacific Gas and Electric Company (PG&E). Pursuant to instructions from the assigned Administrative Law Judge (ALJ), and in order to provide notice to interested parties, Stanford served a copy of its filing on all parties in Rulemaking (R.) 07-05-025 on November 29, 2011. (Although D.03-04-030 was issued in R.02-01-011, the R.07-05-025 is the current rulemaking designated to address direct access and departing load issues). The ALJ instructed that any party wishing to respond to the application for modification should do so within 10 calendar days of service, that is by December 9, 2011.

PG&E filed a response on November 21, 2011. PG&E does not oppose Stanford's requested modification to D.03-04-030. Tesoro Refining and Marketing Company (Tesoro) was the only other party that filed a response, which was submitted on December 7, 2011, expressing support for granting the requested modification, pursuant to e-mail authorization granted by the ALJ dated December 6, 2011.⁴

The application is uncontested, and no hearings are necessary. We determine that the application should be granted in part, and denied, in part, as explained below, based upon review of the information contained in the application and comments filed in response thereto, as discussed below.

On February 1, 2001, Assembly Bill 1X (AB 1X) was enacted to respond to the California energy crisis and in particular to the investor-owned utilities' (IOUs) inability to purchase power for bundled customers due to extraordinary increases in wholesale energy prices. AB 1X authorized the DWR to procure electricity on behalf of the customers of the California utilities. AB 1X also authorized the Commission to suspend the right of California retail end use customers to take direct access (DA) service, which the Commission did in D.01-09-060, effective September 20, 2001.

As a condition of the DA suspension, the Commission allowed then-existing DA contracts to continue in effect, provided that DA customers were held responsible for previous cost obligations undertaken to serve them. In a series of decisions issued in R.02-01-011, the Commission subsequently adopted provisions for the IOUs to bill and collect CRS applicable to DA as well as other prescribed categories of departing load. D.03-04-030 was one of the decisions in this series, specifically addressing the cost responsibility obligations for customer generation departing load. The calculation of cost responsibility surcharges (CRS) was designed to account for the fair share of cost responsibility for the relevant customers. Moreover, different elements of CRS were applied based upon the different time periods in which the corresponding cost obligations were imposed. For example, responsibility for CTC applied to costs incurred after December 1995. By contrast, cost responsibility for DWR power charges only applied to customer departures beginning after February 2001. Thus, the determination of CRS obligations may vary depending on a customer's status and timing of the customer's departure from bundled service.

⁴ Tesoro is hereby granted party status in this proceeding in order to permit the acceptance of its comments in the record.