18. Assignment of Proceeding
Dian M. Grueneich is the assigned Commissioner and Jessica T. Hecht is the assigned ALJ in this proceeding.
1. The settlement agreement would authorize SCE to deploy it proposed AMI system (Edison SmartConnectTM ) to all metered accounts in its service territory with demands less than 200 kW (approximately 5.3 million meters) over a five-year period beginning in 2008.
2. In order to approve this application, we must find that the proposed AMI system affirmatively answers the following questions:
a. Does the proposal satisfy State Energy Policy Objectives?
b. Are the various elements of SCE's AMI business case and deployment plan reasonable?
c. Is SCE's AMI proposal cost-effective, and will it provide lasting value for SCE's customers?
d. Is SCE's AMI technology selection reasonable based on the AMI technologies available in the market?
3. The settlement agreement recommends approval of $1,633.5 million in funding for AMI deployment activities,
4. The AMI deployment plan contained in the settlement agreement is reasonably expected to generate $1,174 million in operational benefits and $816 million in energy conservation, load control, and DR-related benefits.
5. Additional "societal benefits" from the system, including meter accuracy and reduced energy theft, could add approximately $295 million in net benefits over the expected life of the project benefits.
6. The proposal for AMI deployment contained in the Settlement Agreement is cost effective.
7. The stipulations filed by SCE and TURN comprise a subset of the SCE/DRA settlement.
8. Because all elements of the stipulations are also part of the settlement agreement, all issues that are contained in the stipulations are considered to be uncontested issues.
9. For the Commission to approve a settlement, whether contested or uncontested, the settlement must be reasonable in light of the whole record, consistent with law, and in the public interest.
10. The analytical framework used to determine the cost effectiveness of the settlement agreement business case is reasonable.
11. The "consensus framework" for determining DR cost effectiveness proposed by parties in R.07-01-041 is not appropriate for use in analyzing the AMI business case.
12. The $50 per unit wholesale cost estimate for PCTs included in the settlement agreement is reasonable.
13. The settlement agreement estimate of 25% participation in a PCT program is reasonable.
14. The kWh savings assumed in the settlement agreement are reasonable, and do not need to be adjusted for average air conditioning tonnage, inoperative air conditioning units, or customer overrides.
15. For the purposes of analyzing the settlement agreement business case, it is reasonable to assume 50% of households would both be aware of SCE's proposed Peak Time Rebate program and take action to reduce peak energy usage in response to it.
16. The PTR customer elasticities used in the settlement agreement business case, which are based on elasticities calculated from CPP rates and are assumed to remain stable over time, are reasonable for the purposes of estimating future energy savings and associated benefits from PTR rates.
17. It is reasonable to include a 20% benefit to the T&D system from AMI deployment for the purpose of the business case analysis.
18. It is reasonable to consider benefits for reduced energy theft and increased meter accuracy as additional societal benefits beyond the primary AMI business case in our review of the AMI deployment proposal included in the settlement agreement.
19. The AMI deployment proposal in the settlement agreement is cost effective, with between $9 million and $304 million in net benefits over the life of the project based on an analysis of the best available information.
20. The AMI system proposed in the settlement agreement meets the Commission's Minimum Functionality Criteria for approval of an AMI system.
21. SCE's AMI technology choices are reasonable when compared to existing AMI and related technology that is currently available.
22. SCE's AMI technology choices meet state policy objectives for supporting demand response programs and providing increased information about their electricity usage to consumers.
23. Based on SCE's representations, SCE's AMI technology choices should support the possible development of a smart grid, and should contain flexibility that will allow for reasonably foreseeable updates and improvements to the system.
24. The technology chosen for SCE's AMI system is reasonable, and will support state energy policy goals.
25. The settlement agreement includes ratepayer funding for marketing, education, and outreach related to the AMI program.
26. It is reasonable to require SCE to work with Commission staff to ensure that SCE's AMI marketing, education, and outreach program is consistent with the goals and strategies set forth in the California Long-Term Energy Efficiency Strategic Plan.
27. Reporting of data on demand response achieved with the AMI system will provide valuable information, and will assist in tracking progress towards state energy policy goals.
28. The balancing account mechanism and associated cost recovery provisions of the settlement agreement are uncontested by parties and are reasonable and consistent with law.
29. SCE shall negotiate in good faith with SoCalGas and other utilities to provide about providing automated meter reading services through its AMI system.
30. Automated meter reading services through SCE's AMI system should be provided on a contract basis, and should not be a tariffed service.
31. Appropriate charges for contract meter reading services shall be negotiated between the parties to the contract; it is not necessary to determine here whether those costs should be limited to incremental costs of providing the service or should include additional costs.
32. It is reasonable to require SCE to submit any contract it negotiates to provide automated meter reading services to other Commission-jurisdictional utilities to the Commission for approval.
33. It is reasonable to approve SCE's proposed PCT program as part of the Settlement Agreement, and to require SCE to file an advice letter proposing a specific PCT tariff within 15 days of this decision's adoption.
34. It is not reasonable to penalize SCE for failure to meet the demand response forecasts made in the AMI deployment business case.
35. It is reasonable to require SCE to report to the Commission on the energy savings and associated financial benefits of the demand response, load control, and conservation programs enabled by AMI.
1. The settlement agreement is reasonable in light of the whole record, consistent with the law, and in the public interest.
2. No Commission rule provides for the adoption of stipulations between parties, but the stipulations between SCE and TURN constitute a partial settlement of a subset of the issues included in the Settlement Agreement.
3. SCE should file an advice letter for Commission approval of the tariffs for its voluntary PCT program approved in this decision.
4. SCE should offer automated meter reading and related services to other utilities on a contract basis, and should negotiate these services and the associated charges in good faith to other utilities.
5. SCE should submit any contract to provide automated meter reading services to other Commission-jurisdictional utilities to the Commission for approval.
6. SCE should ensure that the AMI marketing, education and outreach funding approved in this decision is used in a manner consistent with the California Long-Term Energy Efficiency Strategic Plan.
IT IS ORDERED that:
1. The March 10, 2008 Settlement Agreement between Southern California Edison Company (SCE) and the Division of Ratepayer Advocates (DRA) on SCE's Application for Approval of Advanced Metering Infrastructure (AMI) Deployment Activities and Cost Recovery Mechanism, Application (A.) 07-07-026 (Appendix A to this decision), is adopted.
2. The March 10, 2008 Stipulations between SCE and The Utility Reform Network are adopted to the extent that they represent a subset of the terms of the SCE/DRA Settlement Agreement.
3. SCE shall report to the Commission on the energy savings and associated financial benefits of all demand response, load control, and conservation programs enabled by AMI, including programmable communicating thermostat program programs, Peak Time Rebate programs, and other dynamic rates for residential customers. SCE shall work with Energy Division develop a reporting format for this information, and shall file annual reports in April of each year in Rulemaking 07-01-041 or a successor proceeding until April 2019. If no successor proceeding exists, SCE shall send these reports to the Director of the Energy Division and serve the service list of the most recent Commission demand response rulemaking. SCE shall base its estimates of energy savings on the Commission's adopted load impact protocols contained in Decision 08-04-050 or successor protocols adopted in the future.
4. Consistent with Section L of the settlement agreement, SCE shall file an advice letter proposing a specific Programmable Communicating Thermostat tariff for Commission approval within 15 days from the effective date of this decision. SCE shall also include a discussion of this PCT program in its amended Demand Response application in A.08-06-001.
5. Consistent with the provisions of the Settlement Agreement, SCE shall file an advice letter no later than 30 days from the effective date of this decision, establishing the SmartConnect Balancing Account. SCE is authorized to recover costs of up to $1,633.5 million in this account, plus additional amounts, if any, consistent with the terms and conditions of the Risk Sharing Mechanism for Deployment Cost Overruns set forth in the Settlement Agreement.
6. In its next (2012) General Rate Case, SCE shall make an affirmative showing that it has avoided double recovery of any requested AMI costs, and that any requested costs in its 2012 GRC are consistent with the limits of recovery adopted in this decision.
7. SCE shall work with Commission staff to ensure its AMI marketing, education and outreach program is consistent with the goals and strategies set forth in the California Long-Term Energy Efficiency Strategic Plan regarding DSM integration and coordination of marketing, education, and outreach.
8. A.07-07-026 is closed.
This order is effective today.
Dated September 18, 2008, at San Francisco, California.
MICHAEL R. PEEVEY
President
DIAN M. GRUENEICH
JOHN A. BOHN
RACHELLE B. CHONG
TIMOTHY ALAN SIMON
Commissioners
************** PARTIES **************
|
********** STATE EMPLOYEE *********** |
Damon A. Franz
|
Rebecca Tsai-Wei Lee
|
Chris King
|
Dionne Adams Kelly M. Foley |
Case Administration |
(END OF APPENDIX B)
D0809039 Appendix A - Settlement Agreement
