Michael R. Peevey is the assigned Commissioner and David M. Gamson is the assigned ALJ in this proceeding.
1. PG&E, SCE, and SDG&E currently assess a system benefit charge known as the public goods charge or PGC that funds, among other things, certain RD&D and renewable energy programs. The authority to collect this charge at current levels ends on January 1, 2012.
2. Issues related to energy efficiency programs currently funded by the PCG are being addressed in R.09-11-014.
3. The Commission required various public purpose programs for many years before the restructuring of the electric industry in California in 1995.
4. The Public Goods Charge was first implemented by statute in 1996 in AB 1890. Conceptually, the Legislative purpose was to guarantee funding for activities that may not otherwise have been supported during a move toward competitive wholesale and retail markets for electricity.
5. The current public goods charge for renewables programs provides ratepayer and public interest benefits through the Existing Renewable Facilities, Emerging Renewables (including the New Solar Homes Partnership) and Consumer Education programs administered by the Energy Commission.
6. The current system benefits charge for RD&D programs provides ratepayer and public interest benefits through RD&D grants and investments for energy efficiency, demand response, renewables, advanced electricity generation, transmission and distribution, climate/environmental and transportation provided through the PIER program administered by the Energy Commission.
7. The expiration of the system benefits charge in Pub. Util. Code § 399.8 on January 1, 2012 in the areas of RD&D and renewables will jeopardize the continuance of ratepayer and public interest benefits in these areas in the absence of alternative funding.
8. Despite the expiration of funding for the PGC, § 399.8 remains in effect, to be considered as policy direction. Section 399.8 provides for specific funding levels for "prudent investments in energy efficiency, renewable energy, and research, development and demonstration," but does not limit itself to programs with ratepayer benefits.
9. Section 451 requires, among other things, that public utility charges be just and reasonable and that every public utility furnish and maintain such adequate, efficient, just, and reasonable service as are necessary to promote the safety, health, comfort, and convenience of its customers and the public.
10. Sections 740 and 740.1, both codifed in 1990, provided authority for the Commission to require ratepayer funding for certain RD&D programs before 1996. Sections 701.1 and 701.3, codified in 1992 and 1991, respectively, provided authority for the Commission to require ratepayer funding for certain renewables programs before 1996. These sections remain in effect today, without modification since enactment.
11. Section 381, enacted in 1996 and amended in 2006, requires that the Commission require each electrical corporation to identify a separate rate component to collect revenues to fund, among other things, certain public interest research and development, and in-state operation and development of certain existing and new and emerging renewable energy resources. Section 381(c) is linked to § 399.8.
12. Since 2004, the Commission has required that funds collected from ratepayers by gas utilities for natural gas RD&D be remitted from the gas utilities to the Energy Commission.
13. D.06-01-024, in the context of solar programs, discussed the Commission's authority to transfer the day to day administration of a program.
14. After January 1, 2011, the Energy Commission will have approximately three to six months of funding available for the programs currently funded by the PGC.
15. A future phase of this proceeding can determine the appropriate ongoing funding levels, programmatic details and governance structures for renewable and RD&D programs funded until now by the system benefit charge.
16. A staff report, subject to parties' comment, on programmatic, governance and funding levels for programs to be funded by a new RD&D/renewables charge will assist the Commission in Phase 2.
1. Benefits associated with the expiring system benefits charge in § 399.8 in the areas of renewables and RD&D programs should continue to accrue to the ratepayers and citizens of California to the extent that such future programs are just and reasonable and consistent with law.
2. The California Constitution and the §§ 451, 701, 701.1, 701.3, 740, 740.3 provide authority for the Commission to require a surcharge by electrical corporations to ensure continuation of the ratepayer and public benefits associated with the expiring system benefits charge in Public Utilities Code Section 399.8 for renewables and RD&D programs.
3. It is in the public interest to impose an interim surcharge, subject to refund, on distribution customers of electric corporations at the same rates as the expiring system benefits charge in Public Utilities Code Section 399.8 (subtracting out the portion of the rates collected for energy efficiency programs), for renewables and RD&D programs that are just and reasonable, and in the ratepayer interest and the public interest.
4. While the Commission cannot delegate its authority and responsibility to determine rates, program rules, regulations and policies, it does have authority to transfer the day to day administration of a program. This authority does not stem primarily from Section 399.8.
5. Funds collected through a new interim surcharge should be collected by electric corporations for the purposes of funding renewables and RD&D programs in the ratepayer and public interest, but not disbursed until the Commission determines the programmatic, governance and funding levels appropriate for these programs. These funds should be collected subject to refund.
6. A Phase 2 decision, based on a staff report and parties' comments, should be issued as soon as practicable in order to ensure continuation of RD&D and renewables programs with ratepayer and public benefits.
IT IS ORDERED that:
1. Effective January 1, 2012, Pacific Gas and Electric Company, Southern California Edison Company, and San Diego Gas & Electric Company shall no longer impose the system benefit charge authorized by Public Utilities Code Section 399.8.
2. Pacific Gas and Electric Company, Southern California Edison Company, and San Diego Gas & Electric Company shall each institute a surcharge, effective January 1, 2012, to collect funds for: i) renewables programs, and ii) research, development, and demonstration programs. The surcharges shall be imposed on an interim basis, subject to refund, until the Commission issues its final decision at the conclusion of Phase 2 of this rulemaking, or until January 1, 2013 (whichever comes first). The surcharges shall be called the Electricity Program Investment Charge or EPIC.
3. Pacific Gas and Electric Company, Southern California Edison Company, and San Diego Gas & Electric Company shall each impose the Electricity Program Investment Charge established by Ordering Paragraph 2 in this decision, on all distribution customers in the same manner as the expiring system benefits charge associated with Public Utilities Code Section 399.8, for the purposes specified in Ordering Paragraph 2 in this decision. This surcharge shall be set at the same levels per kilowatt/hour as the rates for the system benefits charge, after subtracting the portion of the system benefits charge collected for the energy efficiency programs associated with Public Utilities Code Section 399.8. This surcharge shall reflect the same allocation among classes as the rates for the system benefits charge, and shall be collected in the Public Purpose Program component of rates as with the current system benefits charge.
4. Pacific Gas and Electric Company, Southern California Edison Company, and San Diego Gas & Electric Company shall each establish a balancing account for the Electricity Program Investment Charge established in Ordering Paragraph 2 of this decision. Each balancing account, to be known as the "EPIC Balancing Account," shall record funds collected from customers through the EPIC charge, at the level commensurate with funds previously remitted to the Energy Commission for renewables programs and research, development and demonstration programs authorized under Section 399.8 for 2011. The funds collected and placed in these balancing accounts, and the interest earned thereon, shall not be disbursed until authorized by the Commission's final decision at the conclusion of Phase 2 of this proceeding. The new tariffs for these balancing accounts shall be transmitted with the advice letter required by Ordering Paragraph 5 of this decision.
5. No later than December 22, 2011, Pacific Gas and Electric Company, Southern California Edison Company, and San Diego Gas & Electric Company shall each file a Tier 1 Advice Letter consistent with Ordering Paragraphs 2 through 4 in this decision, withdrawing (or substituting) the tariff sheets governing the collection of the Public Goods Charge and submitting proposed new (or revised) tariff sheets authorizing them to collect the EPIC on an interim basis, subject to refund, pending the Commission's final decision in Phase 2 of this proceeding. Subject to review for compliance with the Ordering Paragraphs of this Interim Decision, the new (or revised) tariff sheets shall become effective, and collection of the EPIC shall commence, on January 1, 2012.
6. The Motions for Party Status of Proteus, Inc. and La Cooperativa de Campensina, The National Asian American Coalition, the Latino Business Chamber of Greater Los Angeles and the Black Economic Council; Kern County Taxpayers Association; San Francisco Bay Area Rapid Transit District; and Ecology Action of Santa Cruz, Inc. are granted.
7. Rulemaking 11-10-003 remains open.
This order is effective today.
Dated December 15, 2011, at San Francisco, California.
MICHAEL R. PEEVEY
President
TIMOTHY ALAN SIMON
MICHEL PETER FLORIO
CATHERINE J.K. SANDOVAL
MARK J. FERRON
Commissioners