17. Small Commercial Customer Distinctions

DRA notes that in D.08-07-045, the Commission found and concluded the following:

· Large C&I customers with maximum load greater than 500 kW have been on mandatory TOU rates since the late 1970's or early 1980's, depending on the size of the customer. (Finding of Fact 8.);

· Large C&I customers have been on TOU rates for between five and thirty years. (Finding of Fact 10.);

· Small commercial customers require more time for customer Outreach and Education than do large and medium C&I customers. (Finding of Fact 22.); and

· It is reasonable to subdivide commercial and industrial customers with maximum load less than 200 kW into two subgroups: those with maximum demand between 20 kW and 200 kW, referred to as medium C&I, and those with maximum demand below 20 kW, referred to as small commercial. (Conclusion of Law 11.)

Based on this, DRA states "Despite the Commission's clear expression of concern about how best to conduct Customer Outreach and Education to small commercial customers, PG&E did not separate its program costs for small commercial customers from those for its medium commercial and industrial customers." (DRA Opening Brief at 41.) DRA recommends that PG&E be required to track its spending on small commercial customer outreach separately from such spending for medium C&I, and large C&I customer outreach.

It is also DRA's understanding that, PG&E's preliminary approach to Outreach and Education for Small and Medium C&I and Small Agricultural Customers will be mostly through direct mail, bill inserts, e-mail, personalized letters, customized direct mail, and brochures, while, for its larger customers, PG&E has opted more for workshops, focus groups, education by the use of the Internet, and direct person-to-person Outreach and Education. According to DRA, these activities are more costly and largely account for PG&E spending at least 18 times more on Outreach and Education for each large customer than for each small and medium customer.

PG&E argues that DRA's concerns regarding small customers are misplaced for the following reasons:

· Conclusion of Law 11 concerns the development of draft timetables for customer defaults, and refers to a discussion in D.08-07-045 starting at p. 21. An earlier Ruling in the case grouped together all small and medium C&I customers below 200 kW demand for purposes of the draft default timetable. PG&E recommended subdividing this group into those with maximum demand above and below 20 kW, and delaying dynamic pricing for those below 20 kW. (Id. at 21.) The Commission adopted PG&E's recommendation to subdivide the group, but ultimately determined that both medium and small C&I customers would have the same default schedule;

· With respect to Finding of Fact 22 of D.08-07-045, which states that small commercial customers require more time for customer education and outreach than do large and medium C&I customers, on a cumulative basis, given the relative vast number of small commercial customers, this statement may be true. To the extent time correlates to spending, PG&E estimates that it will cost far more to conduct outreach to small and medium customers than to large ones - $20.6 million versus $5.9 million in 2008-2010, and $17.9 million versus $3.2 million after 2010. However, Finding of Fact 22 does not mean an individual small customer necessarily takes longer to reach a decision than an individual larger customer. There are circumstances where it will take much longer to assist a large company than a small one;

· PG&E's small C&I customers are predominantly served under the Schedule A-1 and A-6 tariffs, while medium C&I customers predominantly take service under either Schedule A-10 or E-19V. PG&E has recognized and given considerable weight to differences between the needs and usage characteristics of its small versus medium C&I customers, and has developed significantly different default PDP rate proposals for these two groups of customers versus the large C&I PDP proposal. PG&E's communications and on-line support tools for these customers will also distinguish between small versus medium C&I customers, because, these communications and support tools will distinguish between customers based on the tariffs under which they currently take service. In this respect, PG&E's rate proposals and customer education plans are fully compliant with any requirements that might be inferred from Finding of Fact 22 or Conclusion of Law 11; and

· DRA's observation that through 2010 PG&E plans to spend considerably more on outreach and education for each large customer than for each small or medium customer leaves out of its analysis that spending on outreach to medium and small C&I customers will not really begin until half way through 2010, after most large customers have defaulted and at a time when PG&E will be adding account services resources.

With respect to DRA's recommendation that PG&E be required to track its spending on small commercial customer outreach separately from such spending for medium C&I, and large C&I customer outreach, PG&E argues that it is a new recommendation made in opening briefs and should be disregarded. PG&E indicates that had it had the opportunity to address this issue during or prior to the hearing, it would have provided testimony on the difficulty and uselessness of such tracking.

PG&E also argues that DRA's request is untimely. Resolution E-4210 ordered PG&E to provide monthly DPMA cost tracking reports to DRA. Subsequently, PG&E and DRA agreed upon ongoing DPMA reporting requirements that did not include DRA's latest request. According to PG&E, it has been providing DRA with the DPMA reports in the previously agreed-to format since the beginning of 2009, and DRA has even provided feedback that it was satisfied with the template for reporting the incremental expenditures, and has not requested additional changes along the lines it now requests. According to PG&E, providing this kind of breakdown would be overly burdensome, particularly considering its limited to nonexistent usefulness; and it is not even clear that PG&E could do so, since many expenditures cannot be clearly identified by customer class.

17.1. Discussion

While information regarding only small commercial customers might be valuable in some respects, we will not require the separate reporting requirement as recommended by DRA. Regardless of how Commission determinations in D.08-07-045 are interpreted, we are certainly concerned about the effectiveness of outreach and education for small commercial customers, especially since most have never been on a time varying rate of any kind. However it is not clear what aspects of customer outreach and education, if any, would be improved by tracking costs in the manner recommended by DRA. According to PG&E, the DPMA cost reporting that is already going on is at least somewhat satisfactory. Moreover, what is important is not necessarily the accounting but the results of the efforts that are put forth. PG&E has proposed outreach and education measures that differ for certain classes of customers and that may well be appropriate. Ultimately, we expect that all customers will be adequately informed and educated and will base any conclusion on the success of PG&E's efforts based on what is done, what is or is not effective and what else could and should have been done. For these reasons, the further segregation of costs for small commercial customers will not likely be that revealing with respect to our outreach and education goals.