6. Waiver of DA Switching and Notice Rules and Subsequent Rights to Acquire DA

6.1. Parties' Positions

Under current rules,¹⁶ former DA customers currently receiving bundled utility service must provide six-months' notice in order to leave bundled utility service. The same six-month notice requirement applies for customers that switch back to DA. Also, a DA customer who returns to bundled service must commit to stay for at least a three-year period.

PG&E proposes that the current three-year minimum bundled service commitment for customers now on bundled portfolio service be waived for an initial implementation period, starting on the date established by the Commission and extending for 60 days. Absent such a waiver, existing Bundled Portfolio Service (BPS) customers may be precluded from switching to DA service if the maximum load cap is reached before these customers complete their three-year commitment period.

In addition to waiving the three-year commitment period, PG&E would support giving BPS customers a higher priority to return to DA compared with "new prospective" DA customers, limited to the initial implementation period.

SCE does not support providing a preference to existing DA-eligible load, but proposes that all DA-eligible customers be provided an equal opportunity to enroll in DA if they so choose. SCE supports a temporary, one-time waiver of the six-month advance notice requirement during the open enrollment period. SCE also supports a one-time waiver to all DA-eligible customers under current BPS commitments, so that these customers can take DA service at any time upon notice of intent (during the open enrollment) or a six-month advance notice (after the open enrollment), assuming that there is sufficient room under the annual limits or overall cap. SCE proposes that the three-year BPS commitment period continue to apply anytime that a DA customer returns to BPS.

After the open enrollment period ends, SCE proposes that the DA switching rules apply equally to all DA-eligible customers, including bundled service customers wishing to switch to DA for the first time, unless and until the Commission reviews and modifies these rules in a subsequent phase of the proceeding.

SCE proposes to establish a wait list and to enroll customers on DA service on a first-come, first served basis, as room becomes available under the annual limits or overall cap.

TURN argues that there is no compelling need for granting any special preference for load that is DA-eligible under the current rules. TURN believes that there is minimal risk that load that is DA-eligible under the current rules, and subject to the three-year minimum stay on bundled service will be "squeezed out" by new DA load. The highest annual figure reported by any of the IOUs for potential DA-eligible bundled load returning to DA service is 475 GWh for PG&E during the period from April 2010 through April 2011. That amount is only about 50% of the quantity proposed by TURN to be made available in the first year of the phase-in period. The other utilities and the other years for PG&E show an even smaller percentage.

TURN argues that no special set-aside preference should be granted to existing customers who are DA-eligible under current rules other than to allow them to terminate their three-year minimum commitment on bundled service in April of the year which the commitment would otherwise expire. In this manner, these customers could request DA service as soon as the next phase-in step occurs. TURN believes that such provision would be sufficient to prevent any DA-eligible customer from being "stranded" on bundled service because of the new total GWh cap on DA. TURN argues that updates on DA load should be posted at least monthly, and perhaps more frequently in a month when a utility's DA load is approaching the cap level.

TURN does not object to a temporary suspension of the six-month notice requirement for customers switching from bundled service to DA, but only during the first year of the phase-in period. TURN does not believe that a continued waiver period beyond the first year is necessary, because customers will be in a better position to provide notice in subsequent years of the phase-in period.

TURN proposes that any and all customers returning to bundled service from DA should remain subject to at least a six-month notice period during which time they would be subject to the Transitional Bundled Service (TBS) rate if they return to bundled service prematurely. TURN believes that at least a one-year notice should be required in order for the returning customer to avoid becoming subject to the TBS rate. If a customer returns to the IOU with less than a one-year notice, the IOU would have to obtain additional resource adequacy (RA) resources outside of the normal procurement cycle, potentially resulting in higher costs for the IOU and bundled customers.

The Joint Parties argue that all customer eligible to switch to DA under SB 695 should be provided an equal opportunity to enroll in DA as of the effective date if they so choose.

6.2. Discussion

We shall grant all DA-eligible customers currently under BPS commitments a one-time waiver of their BPS commitments to allow them an equal opportunity to enroll in DA as of the Effective Date of this decision. A temporary one-time waiver of the six-month advance notice requirement shall also be granted to all DA-eligible customers to allow them an equal opportunity to enroll in DA during the initial open enrollment window, as described in Appendix 2 hereto. The waivers shall apply only during the initial open enrollment window. The long-term applicability of the three-year minimum BPS commitment and six-month advance notice requirements shall be addressed in a subsequent phase of this proceeding. We shall not grant a special preference or set-aside of load to existing DA-eligible customers. Instead, an equal opportunity to enroll in DA shall apply to all eligible customers.

SCE suggested in its comments that residential customers who have taken DA service in the past, but now take utility bundled service (considered as "DA-eligible" under the Commission's rules in effect prior to the enactment of SB 695), would be permitted to switch back to DA service during the phased reopening period. TURN disagrees, however, arguing that SCE's interpretation is inconsistent with SB 695.

SB 695 repealed the prior statutory provisions regarding the suspension of DA which had been in effect since 2001, and replaced those provisions with a new statute, Public Utilities Code Section 365.1. The new statute provides, in relevant part, as follows:

365.1. (a) Except as expressly authorized by this section, and subject to the limitations in subdivisions (b) and (c), the right of retail end-use customers pursuant to this chapter to acquire service from other providers is suspended until the Legislature, by statute, lifts the suspension or otherwise authorizes direct transactions. . . .

b) The commission shall allow individual retail nonresidential end-use customers to acquire electric service from other providers in each electrical corporation's distribution service territory, up to a maximum allowable total kilowatt hours annual limit. . . . . (Emphasis added.)

TURN argues that Section 365.1(a) suspends the right of retail end-use customers provided elsewhere in statute (in the AB 1890 revisions to the Public Utilities Code) to acquire service from other providers except as authorized therein and subject to the limitations in subdivisions (b) and (c). Among those limitations is the provision that allows only nonresidential end-use customers to acquire DA service, up to a maximum annual kWh limit.

We agree with TURN's interpretation. Nothing in the statutory language indicates that any residential customer not already taking DA service would be permitted to take service from another provider under the annual kWh limit during the period of the suspension. Accordingly, we affirm that the right to acquire new DA pursuant to SB 695 excludes residential customers who are not already taking DA service. However, an existing DA-eligible residential customer on bundled service that has already given its six-month notice to return to DA prior to the effective date of this decision would still retain the right to return.

¹⁶ See D.03-05-034 and D.03-06-035.