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 wholesale price volatility and extraordinarily high rate levels. The end of frozen rates meant that SDG&E's customers' bills reflected actual wholesale electric energy prices. By the summer of 2000, the increase in wholesale 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) Code 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)2. The ceiling is retroactive to June 1, 2000, and shall be in effect through December 31, 2002. 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.
Consistent with PU Code Section 332.1, the Commission approved an expanded rate stabilization plan (plan) in D. 00-09-040, issued on September 7, 2000, in I.00-08-002. The plan effectively requires SDG&E to defer the portion of its energy procurement charges in excess of 6.5 cents/kWh. In adopting this plan, the Commission states that, consistent with AB 265, "the rate stabilization plan will ensure that SDG&E establishes a 6.5 cents/kWh for the energy component of electric bills for its residential, small commercial, and lighting customers." (D. 00-09-040 at p. 1). The language throughout the decision is no clearer than that. The words, "direct access" never appear in the decision. The fact that the 6.5 cent/kWh rate ceiling applies to the "energy component" of customers' bills is an important factor in the implementing decision. Therefore, SDG&E's proposed implementation plan, as it now stands, is appropriate in limiting application of the rate ceiling to bundled service customers.
The Commission expressed its intent to consider extending the bill stabilization adopted at that time to DA customers: "In addition, we are concerned about the impact of an SDG&E specific bill stabilization plan on retail competition. Therefore, we will consider in our ongoing investigation the appropriateness of extending the bill stabilization plan retroactively to direct access customers." (D. 00-08-037 at p. 8). The same decision states in Conclusion of Law 5, "The Commission should further study the bill stabilization plan as to direct access customers." If D. 00-09-040 was the product of that further study, the decision never mentioned it.
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 who 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 replaced AL 1264-E. On February 1, the Governor signed Assembly Bill 1X 1 into law, which directs the Commission to suspend DA by a date determined by the Commission. Prior to our determining an effective date for the suspension of DA, SDG&E, in its February 14 comments on the draft and alternate resolutions, argued that AB 1X eliminates the need for DA customers to receive the AB 265 rate cap. On February 16, SDG&E withdrew AL 1264-E/-E-A, citing the impending suspension of DA.
2 2. ABX1 43, signed into law on April 11, 2001, among other things, modifies the language in subsection b to state that the ceiling applies to the "energy component of electric bills for electricity supplied to residential, small commercial, and street lighting customers by the San Diego Gas and Electric Company." The amended subsection (b) language does not affect the existing implementation of the rate stabilization plan.
