BACKGROUND
Commission Decision (D.) 96-08-025 authorized SCE's flexible pricing options, including EDR Agreements. The purpose of the EDRs was to encourage business to locate, remain, and expand within SCE's service area, in order to increase the number of customers and the electric load supporting SCE's distribution revenue requirement. EDRs provide eligible customers with a discount off the otherwise available tariff (OAT) rate. The discount decreases over the term of the five to seven year agreements. These optional rates, established after June 1996, are not subject to the rate freeze1.
While the EDR agreements provide for a specified percentage discount from the OAT rate, they also contain a minimum charge provision. The minimum charge is the hourly cost of procuring energy from the PX and the marginal cost for transmission and distribution facilities plus loss factors.
By Advice Letter 1461-E, SCE claims that the recent high PX prices for energy have caused the minimum charge for EDR customers to exceed the OAT rates, eliminating the original discounts. SCE believes this situation is unfair to EDR customers who made investment decisions based on a discount, but who could end up paying higher rates than customers without the discount. SCE has, therefore, interpreted the minimum charge provision as requiring SCE to charge customers no more than the OAT and has billed EDR customers accordingly. SCE requests Commission approval of SCE's interpretation and authorization to revise the EDR agreements accordingly. Advice Letter 1461-E does not explain who will bear the cost of the loss in revenue, caused by the tariff change.
SCE requested that the proposed tariff sheets have an effective date of August 2, 2000.
By letter dated August 1, 2000, Paul Clanon, Energy Division Director, suspended the tariff sheets for up to 120 days to allow for review.
On August 11, 2000, SCE responded to Mr. Clanon's suspension of the tariff sheets. SCE claims the Director of the Energy Division has no authority to take such an action on behalf of the Commission.
1 See Public Utilities Code Section 368.
