4. Conforming Changes to Temporary Bundled Service (TBS) Rate Calculations

In D.03-05-034, we required that DA customers returning on a TBS basis pay for the incremental cost imposed on the system due to additional short-term spot supplies procured to serve them.⁸ The TBS rate applies to DA customers that wish to serve out their six-month advance notice period to return to bundled portfolio service (BPS) on the IOU's procurement service rather than on DA service, or need a 60-day "safe harbor" period while they switch ESPs. Parties support maintaining the TBS rate.

Remaining bundled customers were not to be burdened with these added costs but were to be left indifferent as to whether DA customers use the utility as temporary "safe harbor." (D.03-05-034, at 19-20.) The TBS rate thus is a market-based price to reflect costs that the IOU incurs to serve DA customers that have not provided the required notification to return to fully bundled service. This policy ensures that IOUs' bundled customers do not incur additional costs because DA customers return to IOU service before the IOU can incorporate that load into its procurement planning

Although parties disagree on various changes to the MPB methodologies, they generally agree that whatever changes are adopted with respect to the PCIA and MPB, consistent modifications should be reflected in the TBS. This includes the commodity cost of power, the incremental cost of RPS compliance, and any incremental capacity/RA costs.

While the DA Parties recommend removing CAISO charges from the Total Portfolio Costs and the MPB, however, they do not recommend removing
load-related CAISO costs from the TBS rate.

We adopt the parties' consensus recommendations to apply the adopted modifications with respect to the MPB in calculating the TBS rate. While we have determined that CAISO load-related charges are to be removed from the total portfolio cost and MPB calculation, we agree with the DA parties that load-related CAISO costs should remain in the TBS rate because they are incurred by the IOUs to serve DA customers on TBS. With regard to the timing for modifications to the TBS rate, changes to the TBS should be implemented concurrent with changes to the PCIA, MPB and Indifference Amount.

⁸ The current TBS rate equals the CAISO's hourly Integrated Forward Market Locational Marginal Price at the respective IOUs' Load Aggregation Points, multiplied by an allowance for unaccounted for energy plus an allowance for Ancillary Services and the CAISO Grid Management Charges