ALJ/jgo DRAFT H-11

4/4/2002

Agenda ID #236

Decision ____________________

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Order Instituting Rulemaking on the Commission's Own Motion to Determine Whether Baseline Allowances for Residential Usage of Gas and Electricity Should Be Revised

Rulemaking 01-05-047

(Filed May 24, 2001)

INTERIM OPINION
REGARDING PHASE 1 ISSUES

TABLE OF CONTENTS

Title Page

INTERIM OPINION REGARDING PHASE 1 ISSUES 1 1

I. Summary 3 3

II. Scope Of This Proceeding 4 4

III. Discussion 5 5

A. Updating Energy Usage Data 5 5

B. Percentage of Energy Usage to Use in Calculating Baseline Quantities 9 9

C. Commission Authority to Adjust Baseline Quantities 11 11

1. AB 1890 11 11

2. Water Code § 80110 12 12

a) "Existing" Baseline Quantities 13 13

b) Whether We May Increase Baseline Quantities 13 13

c) Whether We May Decrease Baseline Quantities 15 15

d) Interplay Between Water Code § 80110 and
Pub. Util. Code § 739 16 16

e) Effect of § 80110 on Usage Above 130% of Baseline 16 16

f) Gas Baseline Quantities Not Affected 17 17

3. Conclusions Regarding Interpretation of Interplay Between Our Interpretation of Water Code § 80110 and Our Decision to Update
Energy Usage Data and Set the Target Percentage at Top of
Statutory Range 18 18

4. Timing of Changes to Baseline 19 19

D. Rate Impacts Addressed in Phase 2 20 20

E. Medical Baseline 21 21

1. Translating Medical Baseline Forms Into Languages Other Than
English and Into Braille 21 21

a) Foreign Languages 21 21

b) Braille 23 23

2. Simplification of Medical Baseline Forms 24 24

3. Availability of Medical Baseline Forms 25 25

4. Outreach 26 26

a) CARE Programs 26 26

b) Other Outreach 27 27

5. Recertification 27 27

6. Size of Medical Baseline Allowance 27 27

IV. Addressing Ongoing Issues and Objectives (or Goals) 28 28

V. Comments on Proposed Decision 28 28

Findings of Fact 28 28

Conclusions of Law 30 30

INTERIM ORDER 32 32

I. Summary

In this first phase of our Rulemaking on electric and gas baseline allowances, we increase the baseline allowances for many residential customers and begin the process of improving the medical baseline program. Specifically, we require the utilities to update the data used for calculating baseline allowances to reflect current usage of both gas and electricity, to increase baseline allowances to the maximum percentage levels allowed by state law for those customers not already receiving those maximum allowances, and to take steps to simplify and improve the process by which customers may obtain additional baseline allowances for medical reasons.

In the Order Instituting Rulemaking (OIR) dated May 24, 2001 opening this proceeding, we stated:

In summary, it has become clear that baseline is an important topic that merits attention at a time when so many Californians are being affected by the largest energy rate increase this Commission has ever had to impose. Section 739, the baseline statute, was added to the Public Utilities Code by the legislature through passage of Assembly Bill 167, the Warren-Miller Energy Lifeline Act, in the 1975-1976 legislative session. After the Commission determined the initial baseline quantities in 1976, it made subsequent revisions and updates in the utilities' general rate cases over the years. Section 739(d)(1) requires, "The commission shall review and revise baseline quantities as average consumption patterns change in order to maintain these [50% to 60%, and 60% to 70% of average residential consumption] ratios." With our recent rate design relying so heavily on baseline quantities to determine which residential customers are affected and to what degree, it becomes more important than ever to ensure the baseline program is up to date. Now is an appropriate time to do such a review. (OIR pp. 5-6)

This decision is the first step in bringing the baseline program up to date. This first step, while significant in expanding the benefits of the baseline program, still provides only limited relief to California's ratepayers. Our actions in Phase 2 of this proceeding may provide additional relief, but as we noted in the OIR:

While we will do our best to adjust baseline quantities to more accurately reflect current consumption levels and significant differentials between customers, we are limited in our review by the statutes setting baseline quantities well below average usage of customers. Because of this, even with revised and updated baseline quantities, the average customer may still find it difficult to reduce usage to baseline levels. (OIR pp. 5-6)

We do, however, begin to make the baseline program more consistent among utilities, which should make it more understandable than it has been in the recent past. In addition, our changes will have the effect of increasing the baseline quantities for most Californians.

Our actions today apply to all Commission-regulated gas and electric utilities. All changes required of any of these utilities to be made in their baseline quantities pursuant to this decision shall be in place by April 1, 2002.