BACKGROUND
Pursuant to D.99-05-051, SDG&E's rate freeze ended on July 1, 1999, about one year before the electric energy market experienced unprecedented price volatility and extraordinarily high rate levels. The end of frozen rates meant that SDG&E's customers' bills reflected actual electric energy prices. By the Summer of 2000, the increase in electricity prices caused SDG&E's customers' bills to double or triple in some cases. This prompted urgent action from the Legislature and the California Public Utilities Commission (Commission).
In August 2000, the Commission adopted a bill stabilization plan in D. 00-08-037, which established a $68 cap for the first 500 kWh for residential and $220 for the first 1,500 kWh for small commercial (<20 kW) customers. This cap was retroactive to June 1, 2000. SDG&E filed AL 1249-E, as directed in Ordering Paragraph (OP) 7 of D. 00-08-037, on August 28 to implement the plan adopted in that decision. By AL 1249-E, SDG&E also established the Interim Bill Stabilization Sub-Account within the Transition Cost Balancing Account (TCBA) to track the undercollected energy costs, including carrying costs and adjustments retroactive to June 1, 2000.
Assembly Bill (AB) 265, an urgency statute enacted by the Legislature, was signed into law on September 6, 2000. AB 265 added Section 332.1 to the Public Utilities (PU) Code2 requiring the Commission to establish a ceiling of 6.5 cents per kilowatt hour (kWh) specifically on the "energy component of electric bills for residential, small commercial, and street lighting customers of the San Diego Gas and Electric Company" (subsection b). The ceiling is retroactive to June 1, 2000, and shall be in effect through December 31, 2002, at a minimum. Section 332.1 also requires the Commission to establish an accounting procedure to track and recover reasonable and prudent costs of providing electric energy to retail customers unrecovered through retail bills due to the application of that ceiling. Any undercollection in this balancing account is to be offset with revenues associated with sales of energy from utility owned or managed generation assets.
PU Code Section 394 denies Commission authority over the rates of competitive Electric Service Providers (ESPs). AB 265 does not expand Commission authority over ESP rates. Section 332.1, added by AB 265, does not require the Commission to authorize SDG&E to apply the rate stabilization plan to the customers of ESPs.
Consistent with Code Section 332.1, the Commission approved an expanded rate stabilization plan in D. 00-09-040, issued on September 7, 2000, in I.00-08-002. This plan effectively requires SDG&E to defer the portion of its energy procurement charges in excess of 6.5 cents/kWh. Eventual recovery of the deferred charges is subject to reasonableness review. Like AB 265, D. 00-09-040 provides no direction to SDG&E for treatment of DA customers. The Commission has no authority over ESP rates or procurement practices. We can authorize SDG&E to defer its own charges to bundled energy customers but not to defer the electric energy charges of DA customers, as those charges belong to the ESPs that procure that energy. Therefore, extending the provisions of AB 265 to DA customers would amount to authorizing SDG&E to offer loans to its DA customers, equivalent to the benefit these DA customers would receive as bundled customers.
SDG&E filed AL 1254-E in compliance with D.00-09-040 on September 12, 2000, to implement the 6.5 cent/kWh energy rate ceiling for residential, "small commercial" (below 100 kW demand) and lighting customers which take bundled service from SDG&E. Section 332.1 includes in its definition of "small commercial" customers (but does not limit its definition to) those accounts on rate Schedule A (which applies to customers with a maximum demand less than 20 kW) and all accounts on Schedule AL TOU "under 100 kW".
D.00-09-040 originally required SDG&E to withdraw AL 1249-E, and file another AL to implement that decision (i.e., AL 1254-E). However, since SDG&E had put AL 1249-E into effect pursuant to D.00-08-037 prior to issuance of D.00-09-040, SDG&E requested that the Commission modify D.00-09-040 to change the wording from "withdraw" AL 1249-E to "revise" 1249-E. In D.00-12-024, the Commission approved SDG&E's request.
AL 1254-E also renamed the sub-account previously established by AL 1249-E, the "Energy Rate Ceiling" Sub-Account. SDG&E began implementing AL 1254-E on October 2000 bills. By AL 1260-E filed October 2, 2000 and supplemental AL 1260-E-A filed October 30 (which replaces AL 1260-E), SDG&E initiated a credit reflecting the 6.5 cent/kWh energy rate ceiling retroactive to June 2000 for applicable customers which take bundled service. SDG&E began implementing these retroactive credits on November 2000 bills.
SDG&E filed AL 1264-E on October 19, 2000 requesting authority to apply the provisions of AB 265 and D.00-09-040 to DA customers. On December 6, SDG&E filed supplemental AL 1264-E-A, which replaces AL 1264-E. AL 1264-E-A revised language that SDG&E initially proposed in AL 1264-E to include on DA customers' bills regarding the rate stabilization plan. The supplement also clarifies how an informational letter to be issued to customers describing the DA Plan would be developed. SDG&E requests that AL 1264-E-A become effective as quickly as possible, so that DA customers may receive the relief it asserts is necessitated by AB 265 and D.00-09-040. SDG&E estimates that the billing system changes necessary to implement its proposed DA Plan would take 45 days to implement. SDG&E would begin applying the energy rate ceiling and retroactive credit on the first billing cycle after completion of billing system changes.
2 2. All statutory references are to the Public Utilities Code unless otherwise stated.
