10. How Will the Proposed Fees Affect Community Choice Aggregator Customers, Bundled Service Customers and/or Residential Direct-Access Customers in California?
AReM and CMTA state that the proposed fees, and especially the MAMF, will have a harmful effect on DA in general and a detrimental impact on the availability of DA service to residential and small commercial customers.144 AReM states that 47% of the revenues that will be collected for DA services under SCE's proposal are attributable solely to the MAMF.145 According to AReM and CMTA, statewide, residential and small commercial customers make up less than 2% of the DA load but the MAMF will be primarily collected from ESPs serving residential and small commercial customers. AReM and CMTA contend that this disproportionate cost burden will further limit the availability of competitive options for small customers.146
AReM contends the structure of the MAMF is especially problematic because it is based on a flat charge for numerous distinct services that is spread across all customers, regardless of whether customers actually require the services. AReM states that DA customers and ESPs should pay charges that reflect actual and reasonable costs incurred by SCE to provide DA-related services, and opposes what it describes as "intra-class subsidies" among DA customers.147
According to SCE, the MAMF is necessary to capture the incremental costs of performing account maintenance activities for DA participants and includes costs of responding to credit inquiries, processing billing and metering exceptions, operating account maintenance support systems (e.g., the DA tracking system), notifying ESPs of changes to customers' service accounts and processing non-energy billing charges.148
Discussion
The approved discretionary service fees apply primarily to DA customers. However, many of the discretionary service fees will also apply to bundled service customers who request certain additional billing and metering services which are not provided for in their applicable default rates, and to special metering or meter reading requests by CCA customers, if a CCA program is implemented in SCE's service territory in the future. For example, Schedule CC-DSF (Customer Choice - Discretionary Service Fees) includes the same meter-related service fees as in Schedule ESP-DSF, but applies to requests made by DA, CCA, and bundled service customers.149 The proposed fees for these services include some new fees, and several existing fees which, in some cases, increase, and in other cases, decrease.
Fees for meter sales, installation and maintenance services represent most, but not all, of the fees applicable to CCA and bundled service customers. According to SCE, revenues from meter sales, installation and maintenance fees will decrease by a total of $212,521.00.150 Thus, while the discrete effect of these fee changes on bundled service or CCA customers is not known, it is likely minimal because these services are provided primarily to DA customers. Also, because the fees applicable to DA, CCA, and bundled service customers we approve are for discretionary services, those customers have the choice to obtain these services from other providers. Therefore, the proposed discretionary service fees will have little effect on residential DA, CCA and bundled service customers.
However, proposed non-discretionary fees that are based on cost estimates which have not been adequately verified for accuracy, if adopted, would likely result in cross-subsidies between direct-access and non-direct-access customers. Moreover, even if DA fees such as the MAMF are cost based, bundling costs for multiple services into a single flat fee inappropriately imposes costs on all DA customers that are attributable to only some DA customers. While SCE's concern with cost shifting is focused primarily on preventing cross-subsidization between DA and bundled service customers, cost shifting between different ESP and DA customers is also undesirable. This is because we have determined that sending customers accurate price signals about the cost of their choices will help a competitive market develop.
Establishing a single monthly "catch all" fee for several DA services is undesirable because all DA customers would pay the fee regardless of whether they use all of the services whose costs are included in the fee. Bundling the costs for various services in a single mandatory MAMF will have a negative effect on DA customers, given the large proportion of DA service fee revenue it represents.
Because we do not approve the proposed non-discretionary service fees, such as the MAMF, residential DA customers are not negatively affected. However, this may result in bundled service customers potentially cross subsidizing DA services to an unknown extent, until verifiable non-discretionary costs are developed and appropriate fees established.151 Therefore, as discussed above, in order to minimize potential cross subsidization by bundled service customers, SCE should remove any costs for non-discretionary DA services from bundled service customer rates.
144 AReM Opening Brief, pp. 12-16.
145 Ibid, p. 14.
146 Exh. AReM/CMTA-1, p. 5.
147 AReM Opening Brief, p. 15.
148 Exh. SCE-2, p. 12.
149 SCE-1, p. 1.
150 Exhibit SCE-5.
151 For example, SCE-5 indicates that the proposed MAMF was estimated to annually generate $408,240.00 in fee revenue.
