ALJ/KLM/tcg Mailed 12/21/2004
Decision 04-12-046 December 16, 2004
BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA
Order Instituting Rulemaking to Implement Portions of AB 117 Concerning Community Choice Aggregation. |
Rulemaking 03-10-003 (Filed October 2, 2003) |
(See Appendix A for List of Appearances.)
ORDER RESOLVING PHASE 1 ISSUES ON PRICING AND COSTS ATTRIBUTABLE TO COMMUNITY CHOICE AGGREGATORS
AND RELATED MATTERS
TABLE OF CONTENTS
Title Page
ORDER RESOLVING PHASE 1 ISSUES ON PRICING AND COSTS
ATTRIBUTABLE TO COMMUNITY CHOICE AGGREGATORS
AND RELATED MATTERS 1
I. Summary and Background 3
II. Procedural Background 5
III. Implementation and Transaction Costs 8
A. Allocation of Implementation Costs Between Ratepayers and
Individual CCAs 9
B. Transaction Costs 12
C. Specific Transaction and Implementation Costs 16
IV. Cost Responsibility Surcharge 23
A. The CRS Model 24
B. CRS "Vintaging" 26
C. Utility Resource Planning 28
D. Unbundling of CRS Components 30
E. Credits or Liability for "In-Kind" Power 32
F. Open Season 33
G. Responsibility for CRS Liabilities 35
H. Collection of Amounts Relating to CRS Exemption for Baseline Customers 36
I. Exclusion for Norton Air Force Base 38
J. CRS True-Up 39
K. CRS Implementation 42
V. Informational Needs of CCAs 46
VI. Other Issues and Terms of Service 53
A. CCA Program Phase-In 53
B. CCA Requirements to Offer Service 55
C. CCA-Specific Load Profiles 55
D. Boundary Metering 56
VII. Comments on Proposed Decision 57
VIII. Assignment of Proceeding 57
Findings of Fact 57
Conclusions of Law 63
ORDER 69
Appendix A - List of Appearances
Appendix B - Assembly Bill 117
ORDER RESOLVING PHASE 1 ISSUES ON PRICING AND COSTS ATTRIBUTABLE TO COMMUNITY CHOICE AGGREGATORS
AND RELATED MATTERS
This order resolves outstanding issues in Phase 1 of this proceeding, which addresses costs and other related matters relevant to Community Choice Aggregators (CCA) and in order to implement the provisions of Assembly Bill (AB) 117 (2002 Stats., ch. 838) that would enable CCAs to procure power for their local residents and businesses.
I. Summary and Background
CCAs are governmental entities formed by cities and counties to serve the energy requirements of their local residents and businesses. The state Legislature has expressed the state's policy to permit and promote CCAs by enacting AB 117, which authorizes the creation of CCAs, describes essential CCA program elements, requires the state's utilities to provide certain services, and establishes methods to protect existing utility customers from liabilities that they might otherwise incur when a portion of the utility's customers transfer their energy services to a CCA.
Cities and counties have become increasingly involved in implementing energy efficiency programs, advocating for their communities in power plant and transmission line siting cases, and developing distributed generation and renewable resource energy supplies. The CCA program takes these efforts one step further by enabling communities to purchase power on behalf of the community.
Today's decision is the first major step toward implementing that portion of the CCA program that would facilitate energy procurement activities by cities and counties. Today's decision constitutes the beginning of our implementation of AB 117. In this implementation, we have fashioned a program that is consistent with our expressed policies with regard to resource planning, utility ratemaking and cost recovery generally. This approach to the program will protect bundled utility customers who do not have the option to transfer to a CCA from the possible cost impacts of CCA programs.
This order by itself does not resolve all issues, even those originally anticipated for Phase 1 in this proceeding. Unfortunately, the record does not provide the type of information required for final resolution of many of the cost allocation issues that are the subject of this phase of the proceeding. This order does, however, take the program as far as possible with the limited information we have by adopting interim CCA charges and service protocols.
We hope this decision provides the type of guidance CCAs and prospective CCAs will need in determining whether to pursue energy procurement efforts in advance of our final order in Phase 2. The order should also provide some guidance to the parties about how we envision the CCA energy procurement program in the broadest sense, and the costs that CCAs will have to incur as customers of and partners with the utilities.
This order adopts the following:
· Department of Water Resources' (DWR) methodology for estimating the cost recovery surcharge (CRS), which will allow the utilities to recover from CCAs the costs of DWR bonds and contracts, utility power procurement contracts and other items in a way that remaining bundled utility customers are indifferent to the CCA program;
· A temporary CRS in the amount of $.020/kWh, which will be trued up in 18 months or sooner, if final utility estimates of CRS are 30% lower or higher than $.020/kWh, and thereafter will be trued up annually;
· Principles for setting prices for utility services offered to CCAs;
· Ratemaking and cost allocation principles for utility services offered to CCAs, implementation costs and the CRS;
· A method to allocate amounts related to the subsidy for baseline customers;
· An exception from the CRS for certain load attributable to Norton Air Force Base in the event that customers at Norton are served by a CCA;
· Requirements for and conditions under which CCAs can acquire customer information from utilities needed to manage energy procurement by CCAs;
· Application of AB 117 as it relates to CCA program phase-ins, boundary metering and the use of CCA-specific load profiles.
