BACKGROUND
Decision (D.) 96-08-025 authorized flexible pricing options, including three EDR tariffs:
· Schedule REDR (Retention Economic Development Rate)
· Schedule AEDR (Attraction Economic Development Rate)
· Schedule EEDR (Expansion Economic Development Rate)
The purpose of EDRs is to encourage businesses to locate, remain, and expand within SCE's service area, in order to increase the number of customers and the electric load supporting SCE's distribution revenue requirement. EDRs provide eligible customers with a discount from an otherwise available tariff (OAT) rate.
The discount decreases over the term of each agreement. These optional rates, established after June 1996, are not subject to the rate freeze.4
While EDR agreements provide for a specified percentage discount from the OAT rate, they also contain a minimum charge provision. The minimum charge is the hourly cost of procuring energy from the PX, plus the marginal cost for transmission and distribution facilities, plus loss factors.
By Advice Letter 1461-E, SCE claims that high PX energy prices have caused EDR minimum charges to exceed OAT rates, thereby eliminating discounts. SCE believes this situation is unfair to EDR customers, who made investment decisions based on the expectation of discounts, but who could end up paying higher rates than customers on an OAT. SCE has, therefore, interpreted the minimum charge provision as requiring SCE to charge EDR customers no more than the OAT, and has billed EDR customers on that basis. SCE requests Commission approval of SCE's interpretation, and authorization to revise the EDR agreements accordingly. SCE requests that the proposed tariff sheets have an effective date of August 2, 2000.
4 See Pub. Util. Code § 368.
