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ALJ/TRP/gd2 Date of Issuance 12/7/2011

Decision 11-12-018 December 1, 2011

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Rulemaking regarding whether, or subject to what Conditions, the suspension of Direct Access may be lifted consistent with Assembly Bill 1X and Decision 01-09-060.

Rulemaking 07-05-025
(Filed May 24, 2007)

DECISION ADOPTING DIRECT ACCESS REFORMS

DECISION ADOPTING DIRECT ACCESS REFORMS 1 1

1. Introduction 2 2

2. Procedural Background 4 4

3. Changes to the Indifference Amount Methodology 6 6

3.1. Changes in the Market Price Benchmark (MPB) to
Account for Renewable Resource Requirements 10 10

3.1.1. Parties' Positions 10 10

3.1.2. Discussion 17 17

3.2. Revised Capacity Adder for the MPB 25 25

3.2.1. Parties' Positions 25 25

3.2.2. Discussion 28 28

3.3. CAISO Load-Based Costs 30 30

3.3.1. Parties' Positions 31 31

3.3.2. Discussion 31 31

3.4. Shaping Profile to Reflect MPB value of Portfolio Resources 32 32

3.4.1. Parties' Proposals 33 33

3.4.2. Discussion 34 34

3.5. Credit for Negative Indifference 35 35

3.6. Adjustment to Account for Congestion 36 36

3.7. Setting a Zero Default PCIA Value 37 37

3.7.1. Parties' Positions 37 37

3.7.2. Discussion 39 39

4. Conforming Changes to Temporary Bundled Service (TBS)
Rate Calculations 41 41

5. DA Switching Rules 42 42

5.1. Minimum Stay Requirements 43 43

5.1.1. Parties' Positions 43 43

5.1.2. Discussion 46 46

5.2. Advance Notice Period to Switch Service 49 49

5.2.1. Parties' Positions 51 51

5.2.2. Discussion 51 51

5.3. Preservation of the Safe Harbor 52 52

5.3.1. Parties' Positions 53 53

5.3.2. Discussion 53 53

6. ESP Financial Security Requirements 54 54

6.1. Necessity for ESPs to Post Financial Security Instruments 56 56

6.1.1. Parties' Positions 56 56

6.1.2. Discussion 57 57

6.2. Definition of Reentry Fees 60 60

6.2.1. Parties' Positions 60 60

6.2.2. Discussion 67 67

6.3. Financial Instruments that Satisfy Section 394.25(e) Requirements 73 73

6.3.1. Parties' Positions 73 73

6.3.2. Discussion 75 75

6.4. ESP Financial Security Bond Methodology 76 76

6.4.1. Parties' Positions 76 76

6.4.2. Discussion 82 82

6.5. Tariff Service for Involuntarily Returned DA Customers 85 85

6.5.1. Parties' Positions 86 86

6.5.2. Discussion 90 90

6.6. Timing of Bond Calculations and Posting 93 93

6.7. Collecting Re-entry Fees on an Involuntary Return 94 94

7. Implementation of Changes in Indifference Methodologies 95 95

8. Categorization and Assignment of Proceeding 98 98

9. Comments on Proposed Decision 98 98

Findings of Fact 98 98

Conclusions of Law 107 107

DECISION ADOPTING DIRECT ACCESS REFORMS