Rehearing and Judicial Review
This decision construes, applies, implements, and interprets the provisions of AB1X. Therefore, Public Utilities Code Section 1731(c) (applications for rehearing are due within 10 days after the date of issuance of the order or decision) and Public Utilities Code Section 1768 (procedures for judicial review) are applicable. (See Stats. 2001-2001, First Extraordinary Session, Ch. 9.)
1. An emergency exists in the electricity market in California.
2. Pursuant to Water Code § 80110, this Commission must determine when the right of retail end use customers to acquire service from other providers shall be suspended.
1. The determinations we make today should apply to PG&E, SDG&E and SCE.
2. Pursuant to Water Code Section 80110, the right to acquire direct access service should be suspended as of the date of this order.
3. The execution of any new contracts for direct access service, or the entering into. or verification of, any new arrangements for direct access service pursuant to Public Utilities Code Sections 366 or 366.5, after the effective date of this order, is prohibited.
4. The effect to be given to contracts executed, agreements entered into or arrangements made for direct access service before today, including renewals of such contracts, as well as comments of the parties will be addressed in a subsequent decision.
5. We specifically reserve the right to modify this order to include the suspension of all direct access contracts executed, agreements entered into or arrangements made on or after July 1, 2001.
6. The utilities should modify any information disseminated to customers that describes direct access service to explain that the right to acquire direct access service has been suspended. Revisions are subject to review by the Public Advisor's Office and Energy Division.
7. The utilities should not accept any DASRs for any contracts executed or agreements entered into after the effective date of this decision.
8. Within 14 days of the date of this order, each utility, by letter, should inform the Director of the Energy Division of the steps it has taken to ensure that no direct access service requests are accepted for any contracts executed or agreements entered into after the effective date of this decision.
9. This order should be effective today so that our order may be implemented expeditiously.
10. Since no party will be prejudiced, all petitions to intervene and all motions to file late filed and supplemental comments that have been explicitly noted by this order should be granted.
11. ACWA's and AReM/WPTF's motions to postpone consideration of the suspension of the right to acquire direct access service are denied because a delay of the suspension would allow customers who switch to direct access to shift higher rates to customers who continue to receive utility bundled service.
IT IS ORDERED that:
1. This order shall apply to Southern California Edison Company (SCE). Pacific Gas and Electric Company (PG&E) and San Diego Gas & Electric Company (SDG&E).
2. All petitions to intervene and all motions to file late filed and supplemental comments are granted.
3. The motions of ACWA and AReM/WPTF to postpone consideration of the suspension of the right to acquire direct access service are denied.
4. The execution of any new contracts, or the entering into, or the verification of any new arrangements for direct access service pursuant to Public Utilities Code Sections 366 or 366.5, after September 20, 2001, is prohibited.
5. PG&E, SDG&E and SCE shall notify their customers that the right of retail end users to acquire direct access service from other providers, except the Department of Water Resources, is suspended effective as September 20, 2001.
6. PG&E, SDG&E and SCE shall modify any information disseminated to customers that describes direct access service, subject to review by the Public Advisor's office and Energy Division, to explain that the right to acquire direct access service has been suspended.
7. PG&E, SCE and SDG&E shall not accept any direct access service requests for any contracts executed or agreements entered into after September 20, 2001.
8. Within 14 days of the effective date of this order, PG&E, SDG&E and SCE, by letter, shall inform the Director of the Energy Division of the steps they have taken to ensure that no direct access service requests are accepted for any contracts executed or agreements entered into after September 20, 2001.
9. This phase of the proceeding remains open for further consideration of comments of the parties, including the effect to be given to contracts executed or agreements entered into before the effective date of this order, as well as renewals of any contracts or agreements.
This order is effective today.
Dated September 20, 2001, at San Francisco, California.
LORETTA M. LYNCH
President
CARL W. WOOD
GEOFFREY F. BROWN
Commissioners
I will file dissent.
/s/HENRY M. DUQUE
Commissioner
I will file a dissent.
/s/ RICHARD A. BILAS
Commissioner
Commissioners Henry M. Duque and Richard A. Bilas, dissenting:
One could say that this order is consistent with the Administration's present third world country mentality. We are punishing the very consumers and providers who made a commitment to ensuring electric restructuring did work by adding a demand retail component to cure the dysfunctions in the wholesale market.
We are not convinced that the Department of Water Resources (DWR) bond ratings depend on killing direct access. This notion is a scare tactic and a smoke screen. Direct access comprises such a small percentage of overall demand that it cannot reasonably be seen to be a threat to the sale of the bonds. Direct Access should be seen as a benefit to DWR. It would decrease the amount of the utilities net short obligations and relieve DWR from its power purchasing responsibilities sooner.
Something else is going on here. We think that the DWR does not want direct access because if the public is presented with alternatives, it will make DWR's purchasing mistakes abundantly clear. The Commission should be holding hearings to test the assertions being made by DWR, Finance and the Treasurer. Instead, the Commission is making an ill informed, panicked decision to act now and study the repercussions later.
DWR and the bonds should not be threatened by direct access if DWR is making prudent energy purchases. Only if DWR's contracts are too expensive, relative to market, will customers seek shelter in lower direct access prices. Indeed, retaining direct access as a way to send price signals to consumers may be the only way to place pressure on DWR to make more prudent purchases. This is a very important consideration since AB 1X prevents us from engaging in any prudency review of the DWR costs to be passed through to ratepayers in order to repay the bonds. If there is no yardstick, how can anyone measure DWR performance? The answer is, one can't, unless SB 18xx is signed into law.
We think that additional review of these issues, before suspending direct access, would have produced a more sound decision in the long run.
For these reasons we must respectfully dissent.
/s/ HENRY M. DUQUE /s/ RICHARD A. BILAS
Henry M. Duque Richard A. Bilas
Commissioner Commissioner
September 20, 2001
