5. Discussion
The issues and concerns raised by parties in this proceeding, such as privacy, smart meter accuracy and alleged health impacts, are similar to those raised in A.11-03-014 and A.11-03-015.42 We have addressed many of these issues in D.12-02-014, which modified PG&E's SmartMeter Program to include an analog meter opt-out option for residential customers who did not wish to have a wireless SmartMeter installed at their location. Given the similarity of issues and concerns, we believe that there is merit to considering DRA and CPA's recommendations to apply the opt-out option adopted for PG&E in D.12-02-014 to SCE.
As noted above, there are four opt-out approaches that could be offered to residential customers who do not wish to have a wireless smart meter. SCE's preferred alternative is the radio-off option, as it believes that option would best leverage existing meters and systems. However, it states that if an analog meter opt-out option is adopted, this option be modified to allow SCE to revert customers back to the meter form (i.e., analog or non-analog, non-smart meter) that was previously installed at the customer's premises. Both DRA and CPA urge that an analog meter opt-out option be adopted on a statewide basis. DRA notes that this option is feasible at this time since there are no mandatory time-of-use (TOU) rates for residential customers. It also contends that this option should be adopted since it is the lowest cost.
In determining the best opt-out option to be adopted, we must balance the concerns expressed by customers against California's overall energy policy. As such, we believe that while residential customers should have the option to opt-out of receiving a wireless smart meter, this option should not impede state energy objectives. The ability to collect interval energy consumption data is a key component to attaining California's overall energy objectives, including matching customer demand with procurement of generation resources. In D.08-09-039, we determined that SCE's selected AMI system met state energy policy objectives and the minimum functional requirements established in R.06-02-001.43 These functional requirements included:
· Implementation of the following price responsive tariffs for:
o Residential and small commercial customers (200 kilowatts (kW)) on an opt out basis:
_ Two or three period TOU rates with ability to change TOU period length;
_ Critical peak pricing with fixed (day-ahead) notification;
_ Critical peak pricing with variable or hourly notification; and
_ Flat/inverted tier rates.
o Large customers (200 kW to 1 megawatt (MW)) on an opt-out basis:
_ Critical peak pricing with fixed or variable notification;
_ TOU pricing; and
_ Two part hourly real-time pricing.
o Very large customers (over 1 MW) on an opt-out basis:
_ Two part hourly real-time pricing;
_ Critical peak pricing with fixed or variable notification; and
_ TOU pricing.
· Collection of usage data at a level of detail (interval data) that supports customer understanding of hourly usage patterns and how those usage patterns relate to energy costs.
· Customer access to personal energy usage data with sufficient flexibility to ensure that changes in customer preference of access frequency do not result in additional AMI system hardware costs.
· Compatibility with applications that utilize collected data to provide customer education and energy management information, customized billing, and support improved complaint resolution.
· Compatibility with utility system applications that promote and enhance system operating efficiency and improve service reliability, such as remote meter reading, outage management, reduction of theft and diversion, improved forecasting, workforce management, etc.
· Capability of interfacing with load control communication technology.
Based on the above, we believe that any selected opt-out option should have the capability of collecting interval energy consumption data. Nonetheless, as noted by DRA, there are currently no mandatory TOU tariffs for residential customers. Further, we have recently ordered PG&E to modify its SmartMeter Program to include an analog meter opt-out option for its residential customers. As such, we find that SCE's Edison SmartConnect Program should be modified to include an "analog" opt-out option for residential customers. This option, however, does not require SCE to install an analog meter at a customer location that previously did not have an analog meter or to replace an existing non-analog, non-smart meter with an analog meter. Rather, the opt-out option shall have the customer retain the meter currently installed at their location or receive the meter form (i.e., an analog meter or a non-analog, non-smart digital meter) that had been at the customer's location prior to the installation of a wireless smart meter.
Our decision to provide residential customers with the option to retain their analog meters at this time, however, does not diminish our commitment and support to the development of California's energy policies. As such, further review of the feasibility of continuing to offer this option may be warranted in the future to ensure that it does not impede the full implementation of net metering, demand response and smart grid.44 At a minimum, this opt-out option should be re-evaluated once default TOU pricing is employed for all residential customers. As with our determinations in D.12-02-014, we decline to adopt more than one opt-out option at this time.
SCE requests that all costs within the scope of offering an opt-out option be found reasonable and not subject to further review. However, SCE's estimated costs provide limited information to determine that the costs included in its estimates are only incurred as a result of offering the opt-out option. Further, SCE has already stated that it is planning to file updated costs. Therefore, we find that further review of the costs associated with offering an opt-out option is warranted. Consequently, the costs associated with offering the opt-out option shall be considered in a separate phase of this proceeding. Further, as proposed by CPA, this phase shall consider whether to allow the opt-out option to be exercised by local communities and governments and, if so, whether the costs for a community exercising the opt-out option would differ from an individual customer exercising the opt-out option.45
SCE proposes to recover the incremental costs associated with the opt-out option from those residential customers exercising the option. SCE's proposal includes an initial fee, monthly charges and an exit fee. These fees and charges would be discounted by 20% for those customers enrolled in the California Alternate Rates for Energy (CARE) program.
Since we will be considering SCE's costs and revenue requirements in a second phase of this proceeding, we do not believe that it would be reasonable to adopt SCE's proposed fees and charges at this time. Rather, we adopt interim fees and charges at this time so that the opt-out option may be implemented without further delay. The interim fees and charges adopted here will be subject to adjustment pending the resolution of this second phase. Consistent with D.12-02-014, the interim fees and charges are as follows:
For Non-CARE customers:
Initial Fee $75.00
Monthly Charge $10.00/month
For CARE customers:
Initial Fee $10.00
Monthly Charge $5.00/month
In its comments on the proposed decision, Center for Electrosmog Prevention (CEP) states that customers with multiple meters on their premises associated with one account should not be charged an initial fee and monthly charge for each meter, regardless of whether the meter is gas or electric.46 SCE believes that CEP's recommendation should be evaluated further in the second phase of this proceeding.47 We agree that there should be further evaluation of whether the opt-out fees and charges should vary based on the number of meters located at a customer's premises. However, until that evaluation is completed, SCE shall charge a single interim initial fee and monthly charge for all electric meters at the customer's premise, provided the customer participating in the opt-out option is the customer of record, pending the resolution of the second phase of this proceeding. Since SCE does not provide natural gas service, a residential customer's ability to opt out of a gas smart meter, and the associated fees and monthly charges associated with the opt-out, are not covered by this determination.
We make no determination regarding whether to impose an exit fee at this time. The current record does not contain sufficient evident to justify why such a fee is necessary nor the appropriate amount. Therefore, we will consider the appropriateness of an exit fee in the second phase of this proceeding.
SCE is authorized to establish a new two-way memorandum account to track revenues and costs associated with providing the opt-out option. We allow SCE to track these costs and revenues in a two-way memorandum account so that it will preserve the opportunity to seek recovery of these costs and revenues once a final decision on costs and cost allocation is issued.48
Finally, we agree with SCE that the issues of privacy and cyber security are outside the scope of this proceeding. The issue before us is simply whether SCE should be required to offer an alternative to those residential customers who do not wish to have a wireless smart meter installed at their location. CPA's request, on the other hand, seeks to evaluate the security practices and implementation of all utilities implementing wireless mesh networks. These issues are not material to determining whether to modify the Edison SmartConnect Program to include an opt-out option.
42 A.11-03-014 addresses PG&E's application to modify its SmartMeter Program to include an opt-out option. A.11-03-015 addresses an application by the Utility Consumers Action Network to modify SDG&E's Advanced Metering Infrastructure (AMI) Project to include a smart meter opt-out option.
43 D.08-09-039 at 41 & 44.
44 This would include reviewing whether customers are electing the analog meter opt-out option as a means to avoid mandatory TOU tariffs and whether the opt-out fees would need to be adjusted to discourage this action.
45 Consideration of a "community" opt-out option shall include issues presented by residents living in multi-family dwelling units, where large numbers of wireless smart meters are located closely together.
46 Center for Electrosmog Prevention Comments on Proposed Decision Issued March 15, 2012, filed April 3, 2012, at 9.
47 Reply Comments of Southern California Edison Company on the Proposed Decision Modifying Decision 08-09-039 and Adopting an Opt-Out Program for Southern California Edison Company's Edison SmartConnect Program, filed April 9, 2012, at 3.
48 Authorization of a memorandum account does not necessarily mean that the Commission has decided that the types of costs to be recorded in the account should be recoverable in addition to rates that have been otherwise authorized, e.g., in a general rate case. Instead, the utility shall bear the burden when it requests recovery of the recorded costs, to show that separate recovery of the types of costs recorded in the account is appropriate, that the utility acted prudently when it incurred these costs and that the level of costs is reasonable. Thus, SCE is reminded that just because the Commission has authorized these memorandum accounts does not mean that recovery of costs in the memorandum accounts from ratepayers is appropriate.
