4. Opposition to the Petition

CLECA makes the following arguments in its response and opposition to the Petition:

· PTR and CPP are not largely duplicative. PTR is a poor substitute for real dynamic pricing. It does not tell customers when power is more expensive. Instead, it gives them a rebate if they use less power during event periods (which are assumed to be high cost periods) and it has no impact on them if they choose not to change their behavior.

· Larger customers do not have the PTR option at all, and must decide whether to accept default CPP or return to TOU rates, which rate form already contains a strong incentive to reduce usage during summer on-peak periods, periods which are far longer and more frequent than CPP events.

· While dynamic pricing rate options should be delayed until customers have the appropriate metering and a year of meter data, the Petition would delay voluntary CPP until 2013 and default CPP until "no sooner than 2016," which is four to five years after it will apply to other customers, and four to five years after the full installation of SmartMeters at all residential customer premises. This very different treatment for residential customers cannot be justified on customer education grounds.

· The education issue is not limited to residential customers. Customer education issues related to dynamic pricing are extremely important. The solution may be to have someone other than the utilities do the educating. However, CLECA does not support the notion that the customer education issue should or can justify the delay of residential rate changes while the utilities plunge ahead with changes for larger customers, most of whose usage is significantly less flexible than residential use.

· PG&E's proposed costs for residential CPP and PTR implementation, including that for customer outreach and education as well as costs for information technology, program operations, and measurement and evaluation, are very high. The solution, however, is not to delay program implementation but rather for the Commission to decide if third parties could do the customer outreach and education or implement the billing system changes better and more cost-effectively.

In its reply to CLECA, DRA states:

· There is an impact on customers if they choose not to change their behavior under PTR. PTR rebates are paid for by other customers in the same class, residential customers who fail to reduce usage on event days will bear the cost of subsidizing those customers who do reduce usage. Therefore, over time, those customers who choose not to change their behavior will experience higher bills than their more conservation-minded neighbors who earn rebates.

· While CPP may possibly yield more savings per participant, the probable greater customer acceptance of PTR may ultimately yield more overall load reduction than obtainable by CPP alone.

· The requested delay will further the Commission's objectives because it would result in more training, outreach, and staged implementation, which will certainly result in more well-thought out and tested dynamic pricing programs, as well as better customer acceptance.

· CLECA's contention of a later implementation date for captive residential customers is not a luxury, but California law designed to protect ratepayers, especially because residential customers are losing the protections of AB 1X.

· The Petition does not seek any delay of the large electric customers' PDP implementation date of May 1, 2010, which PG&E recently requested to delay by one month due to the fact that PG&E needed to perform more outreach and education so that large customers can better understand default PDP. If PG&E needs to delay PDP implementation, even if only for a month, for more outreach and training for the sophisticated large electric customers, who have been exposed to and are educated with the dynamic pricing programs, then it is reasonable, if not essential for the PDP program to be delayed for novice and unfamiliar residential customers for a substantial period of time. PG&E's request to delay the default PDP for large customers supports the Petition's rationale that the programs be implemented well and effectively.