38. Future Rate Design Proceedings

DRA recommends that PG&E be directed to file a 2012 RDW application in February 2012, to address the following:

· An assessment of the performance of the 2010 and 2011 summer season PDP programs, in terms of customer participation and achieved demand response, with proposed adjustments, if any, to improve program performance;

· Proposed adjustments to PDP charges and credits, to reflect marginal costs adopted in the 2011 GRC Phase 2; and

· Proposed new TOU and TOU/PDP rates for medium C&I customers, intermediate in time-differentiation between the proposed A1-TOU and A6-TOU rate designs. The new rates should be available to medium C&I customers, and as an option for small commercial customers, on or before May 1, 2013. As of that date, A1-TOU and A1-PDP rates should no longer be available to medium C&I customers who have been on either A1 rate schedule for a full year.

In general, PG&E asserts that the 2014 GRC Phase 2 proceeding is the proper forum in which the Commission should consider changes to PDP and TOU, principally because more useful data would be available for analysis at that time.

Based on the record, it is not clear whether the 2012 or 2013 RDW or the 2014 GRC Phase 2 proceeding is the more appropriate proceeding to consider PDP or TOU changes. A 2012 RDW window would be filed in late November 2011. We note that implementation of PDP default provisions for certain customers will extend through 2012, possibly into 2013 depending on the actual deployment schedule for SmartMeters. It may well be important to make necessary changes that affect default provisions sooner rather than later. A 2012 RDW could accommodate that. Also, because this is a significant new program that can affect most customers in one way or another, a conservative approach for maintaining control of the program may be the most appropriate path to take. Again, this can be accommodated by a 2012 RDW which could identify program deficiencies or problems and address them in a timely manner. For these reasons, we will require PG&E to file a 2012 RDW to consider not only the DRA proposals indicated above, but whatever proposals parties think would be appropriate at the time of the RDW filing when considering the state and success, or lack of success, of the PDP program and its implementation. It should be recognized that even though such proposals may be brought up and considered at that time, the Commission may still decide that it would be better to defer some proposals to a later proceeding such as the 2014 GRC Phase 2. However, such decisions are better made at that time with consideration of a fully developed record.

DRA also recommends that consideration of a voluntary pilot RTP rate, available on a limited basis to nonresidential customers, should be delayed possibly to a 2013 RDW application. We believe it is premature to make a decision regarding such a delay. While DRA indicates that parties may be far apart on how best to implement such rates, PG&E will be proposing optional RTP rates for all customer classes as part of its 2011 GRC Phase 2, as ordered in D.08-07-045 (Ordering Paragraph 7). Whether or not it is necessary or desirable to delay the implementation of optional RTP rates should be determined based on a fully developed record in that proceeding.