ALJ/BMD/hkr DRAFT CA-18 from 3/21/2002

4/22/2002

Agenda ID #309

Decision DRAFT DECISION OF ALJ DEBERRY (Mailed 3/25/2002)

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Application of Southern California Edison Company (E 338-E) for Authority to Institute a Rate Stabilization Plan with a Rate Increase and End of Rate Freeze Tariffs.	Application 00-11-038 (Filed November 16, 2000)
Emergency Application of Pacific Gas and Electric Company to Adopt a Rate Stabilization Plan. (U 39 E)	Application 00-11-056 (Filed November 22, 2000)
Petition of The Utility Reform Network for Modification of Resolution E-3527.	Application 00-10-028 (Filed October 17, 2000)

OPINION ON REQUEST FOR INTERVENOR COMPENSATION

This decision awards The Utility Reform Network (TURN) $574,584.45 in compensation for its contribution to Decision (D.) 01-01-018, D.01-03-029, D.01-03-081, D.01-03-082, D.01-04-005, and D.01-05-064.

1. Background

TURN's compensation request is large, but we note that the request (which is unopposed) covers contributions to many decisions at the heart of the current energy crisis. In these decisions, adopted during different phases of the proceeding, the Commission addressed the requests of Pacific Gas and Electric Company (PG&E) and Southern California Edison Company (Edison) for immediate rate increases in response to extraordinary circumstances in California's wholesale power markets. The first phase concluded with an increase in rates for PG&E and Edison customers of one-cent per kilowatt-hour (kWh) in D.01-01-018. Prior to D.01-01-018, the Commission issued D.00-12-067, which consolidated the above-captioned applications and a petition (docketed as Application (A.) 00-10-028) filed by TURN as one proceeding with different phases.

D.01-03-082, issued in the second phase, is an interim opinion granting PG&E and Edison authority to increase rates by an additional three-cents per kWh over those rates adopted in D.01-01-018. In this second phase five issues were considered:

a. Review of the independent audits of PG&E and Edison, and determination of whether or not the Commission should grant further rate increases.

b. TURN's accounting proposal to reconcile various balancing and memorandum accounts.

c. Consideration of whether the rate freeze under Assembly Bill (AB) 1890 has ended on a prospective basis.

d. Greenlining/Latino Issues Forum's California Alternative Rates for Energy (CARE) proposal.

e. Parties' proposals for tiered residential rates.

D.01-03-082 concluded that the utilities were experiencing serious financial shortfalls in revenues necessary to provide adequate electric service to their customers. That decision also adopted changes in accounting rules proposed by TURN, which recognize amounts utilities realized both on their sales of capital assets and in revenues from selling electricity generated by their own plants. D.01-03-082 also exempted low-income customers from the rate increase while stating that the rate freeze under AB 1890 has not ended, and provided opportunity for parties to comment on a tiered residential rate proposal.

The third phase of these consolidated proceedings resulted in D.01-03-081 and D.01-04-005. These decisions address the issues of implementing AB 1X, signed into law February 1, 2001, and codified in Section 360.5.¹ That statute authorizes the California Department of Water Resources (DWR) to purchase electric power for sale directly to retail end-use customers served by utilities, and establishes the California Procurement Adjustment (CPA) which sets the amount of the utility retail rate which is transferred to DWR to pay for power purchases. D.01-03-081 requires utilities to provide DWR with monies collected for power paid for by DWR, sets out the proposed method to calculate the CPA, calculates for each utility a proposed CPA rate, and implements Section 360.5. D.01-04-005 applies the CPA rate to determine CPA revenue used by the DWR in the process of issuing bonds and addresses comments of parties on the CPA methodology proposed in D.01-03-081.

In the fourth phase, D.01-05-064 allocated the three-cents per kWh authorized in D.01-03-082 to customer classes. The Commission adopted five tiers for residential usage, excluding CARE and medical baseline customers. All shortfalls in revenue were allocated to non-exempt sales for residential usage above 130% of baseline amounts, and to commercial and industrial customers. Agricultural customers were limited to increases of 15% to 20% depending on their tariff schedule.

TURN timely filed its compensation request on July 16, 2001. No party filed a response to the request.