STATE OF CALIFORNIA GRAY DAVIS, Governor

PUBLIC UTILITIES COMMISSION

505 VAN NESS AVENUE

SAN FRANCISCO, CA 94102-3298

July 19, 2001

TO: PARTIES OF RECORD IN APPLICATION 00-11-038 ET AL.

This is the draft decision of Administrative Law Judge (ALJ) Christine Walwyn. It will be on the Commission's agenda at the meeting on August 2, 2001. The Commission may act then, or it may postpone action until later.

When the Commission acts on the draft decision, it may adopt all or part of it as written, amend or modify it, or set it aside and prepare its own decision. Only when the Commission acts does the decision become binding on the parties.

Pursuant to Rule 77.7(f)(9), comments on the draft decision must be filed within seven days of its mailing and no reply comments will be accepted.

In addition to service by mail, parties should send comments in electronic form to those appearances and the state service list that provided an electronic mail address to the Commission, including ALJ Walwyn at cmw@cpuc.ca.gov. Finally, comments must be served separately on the Assigned Commissioner, and for that purpose I suggest hand delivery, overnight mail, or other expeditious methods of service.

/s/ LYNN T. CAREW

Lynn T. Carew, Chief

Administrative Law Judge

LTC:tcg

Attachments

ALJ/CMW/k47/tcg DRAFT H-21

8/2/01

Decision DRAFT DECISION OF ALJ WALWYN (Mailed 7/19/2001)

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Application of Southern California Edison Company (E 3338-E) for Authority to Institute a Rate Stabilization Plan with a Rate Increase and End of Rate Freeze Tariffs.	Application 00-11-038 (Filed November 16, 2000)
Emergency Application of Pacific Gas and Electric Company to Adopt a Rate Stabilization Plan. (U 39 E)	Application 00-11-056 (Filed November 22, 2000)
Petition of THE UTILITY REFORM NETWORK for Modification of Resolution E-3527.	Application 00-10-028 (Filed October 17, 2000)

INTERIM OPINION ADDRESSING REAL TIME PRICING ISSUES

AND MODIFYING DECISION 01-05-064

1. Summary

In this decision, we address two petitions by the California Energy Commission (CEC) to modify portions of Decision (D.) 01-05-064 related to Real Time Pricing (RTP) issues.

We grant, in part, CEC's May 17, 2001 petition and modify D.01-05-064 to (1) clarify that the receipt of interval meters for customers with electric loads over 200 kilowatts (kW) of demand is mandatory under Assembly Bill 29X; and (2) provide customers receiving these meters who are not on a Time of Use (TOU) rate schedule the choice of participating in a demand reduction program administered by the Commission or switching to a TOU schedule.

We do not adopt the pro-forma tariff proposed by the CEC in its June 21, 2001 petition. We find the proposal is not based on real-time prices; does not provide an estimate of the dollar amount of incentives that will need to be paid under the proposal and the impact this would have on the CDWR revenue requirement; raises significant concerns that the plan proposed by CEC would result in cost shifting from large customer classes to the small business, agricultural, and residential classes; dilutes the positive load reduction effects of the rate increase, the 20/20 program, and the system benefits of subsidized energy efficiency improvements; and would not be compatible with existing demand reduction programs administered by the Commission, CDWR, and the ISO. Perhaps most troubling is that the CEC proposal would have the Commission unlawfully delegate its ratemaking authority.

While many, although perhaps not all, of our concerns with the CEC's proposal could be addressed by additional time, we realize the significant constraints the CEC was operating under in attempting to have a program operational for this summer. We plan to follow up on the CEC's initiative. To assist all parties, we are laying out the guidelines that we believe an RTP program must have in order to be beneficial. In this decision, we reaffirm our support for an RTP program and provide specific criteria that we will use to evaluate future proposals. We direct Pacific Gas and Electric Company (PG&E), Southern California Edison Company (Edison), San Diego Gas & Electric Company (SDG&E), and any other interested parties to present RTP proposals that meet these criteria by August 17, 2001.