IV. SCE's Proposals
A. The Period January 19, 2001 to June 2, 2001
On January 19, 2001, SCE ended its participation in the PX markets. As a result, SCE could no longer utilize the PX price to calculate the DA credit. Thus, SCE was compelled to modify its DA credit methodology to reflect the fact that it was no longer procuring power from the PX, but rather from a number of sources. SCE, therefore, modified its DA credit methodology to rely instead on a weighted average energy price. SCE used this modified methodology until June 3, 2001. SCE requests that the Commission ratify its DA credit calculation between January 19, 2001 and June 2, 2001. No party objects. We agree that it is reasonable because it uses an appropriate calculation for the DA credit.
B. The Period June 3, 2001 to Implementation
of Bottoms-Up Billing
Since June 3, 2001, SCE has utilized a DA credit calculation based on the generation rate of the customer's otherwise applicable tariff (OAT). Under Schedule PE-Procured Energy, the DA credit is set at the generation component of the OAT, adjusted for charges or credits. SCE requests that the Commission ratify its modified OAT generation methodology employed since June 3, 2001. No party objects. Again, we agree that this is a reasonable approach and we approve it.
SCE proposes that for the remainder of the Rate Repayment Period (as defined in the Settlement)5 Historical Procurement Charges (HPC), and all other authorized non-bypassable charges, should be subtracted from the generation component of the DA customers OAT before it is credited to them. SCE says the Commission has already signaled its approval of this mechanism in the findings of fact D.02-07-032:
"SCE will modify the currently effective DA credit calculation by subtracting the HPC as adopted from the generation rate of the DA customers' OAT before it is credited to them. The HPC will have the effect of reducing future credits."6
SCE, therefore, urges the Commission to find that until bottoms-up billing is adopted at the end of SCE's Rate Repayment Period, SCE's HPC, and all other authorized non-bypassable charges, should be subtracted from the generation component of the DA customers' OAT before it is credited to them. No party objects. This methodology appropriately ensures that DA customers pay the required nonbypassable charges. It is reasonable and will be adopted.
C. Bottoms-Up Billing
SCE asserts that nearly every party to this proceeding agrees that the best prospective approach is to avoid the crediting methodology entirely by moving to a bottoms-up billing approach. Under this approach, DA customers' bills would be based on the services they purchase from the utility, plus any nonbypassable charges, instead of paying the same total charges as bundled service customers and then receiving a credit. SCE submits that there is broad support for this approach and that the Commission should authorize a bottoms-up approach for SCE at the end of its Settlement Rate Repayment period. SCE's proposal is the same as PG&E's. It is reasonable and will be adopted.
5 The Rate Repayment Period is defined as September 1, 2001 to the earlier of December 31, 2003 or when SCE recovers its Procurement Related Obligation Account (PROACT) balance. For a detailed description of the Settlement, the HPC, and PROACT, see D.02-07-032. 6 See D.02-07-032, Finding of Fact 10.
