3. Parties' Positions on the Requested Modifications to D.03-04-030

Stanford requests that D.03-04-030 be modified to provide clarification as to its responsibility for CRS based on changes in its customer status, as explained herewith.

As an existing customer-generator before, during, and after the 2000-2001 California energy crisis, Stanford asserts that its campus load is exempt from all applicable CRS charges, except to the extent that it has purchased stand-by power. There is no dispute regarding the applicability of CRS charges during the years that Stanford purchased stand-by power from PG&E. Stanford accepts that as a DA customer, it has a responsibility to pay CRS charges under Schedule DA-CRS in an amount that reflected its historical stand-by purchases for the campus load. Such payments ensured that PG&E's ratepayers were made whole for any procurement obligations entered into by PG&E or DWR to provide stand-by power to the campus load. Therefore, Stanford concludes that the indifference principle would require that Stanford pay some limited, but equivalent amount of CRS upon transitioning all or part of the campus load previously supplied by self-generation to DA service. Accordingly, Stanford seeks acknowledgement and clarification of the Commission's policy and associated tariff language regarding the CRS obligation in this circumstance.

Presumably, PG&E and DWR's forecasting for long-term procurement historically included some quantity of power to serve the limited and intermittent demand of stand-by customers such as Stanford. Therefore, Stanford is willing to pay CRS charges commensurate with that procurement obligation. Since Stanford switched its main campus account to DA, however, PG&E has been levying CRS charges on all purchases from the electric service provider (ESP), rather than on the amount of load previously served by PG&E's stand-by service.

Stanford thus requests that D.03-04-030 be amended with added text at the end of the first full paragraph on page 57, as follows:

In the event that an exempt "existing" or "grandfathered" customer account subsequently switches all or part of that load to direct access service the customer shall pay DWR bond charges and ongoing power charges and any other applicable CRS charges in an amount that is determined by reference to the average annual quantity of power actually delivered to the customer account pursuant to an IOU tariff (for example, under Stand-by service) on average during the 36 months preceding that month in which the customer account switched to direct access service.

Stanford also proposes that a new Ordering Paragraph be adopted, mirroring the language above. Stanford also requests that similar language and an illustrative calculation be added to Schedule DA-CRS. Stanford further requests that PG&E be ordered to adjust Stanford's payments under Schedule DA-CRS dating back to March, 2011, reflecting the modifications requested.

PG&E does not oppose Stanford's requested modifications to D.03-04-030, and shares the belief that this may be an issue of first impression, since a few customer-generation accounts have switched to bundled service but none apparently have switched directly to DA service. PG&E supports timely action on Stanford's application so as to clarify this issue for Stanford and similarly situated customers, as well as the IOUs that serve them. PG&E notes, however, that the City of Palo Alto is taking steps to serve Stanford once its Cardinal cogeneration unit is shut down. Stanford's application and PG&E's response only address Stanford's shift from distributed generation to DA. PG&E does not believe that the requested relief would apply to Stanford were it to receive service from the City of Palo Alto.

In its response dated December 13, 2011, Stanford confirmed that its application only addresses Stanford's shift from Distributed Generation to DA. Stanford affirms that it has not requested that the Commission address calculation of CRS (or other non-bypassable) charges for a customer generation account that switches to service from a municipal utility.

Tesoro filed comments in support of Stanford's application to modify D.03-04-030. Tesoro argues that timely clarification, as requested by Stanford, will benefit other customers like Tesoro who may also seek to switch from previously existing on-site customer generation to DA service.