TREATMENT OF DIRECT ACCESS CUSTOMERS

The entry in the Assembly Daily Journal (ADJ), dated September 1, 2000 (at page 9077) states: "It is the intent of this Legislature in enacting AB 265, that direct access customers not be discriminated against in implementation of the rate formula as established in AB 265." (p. 2-3). The ADJ further states that if DA customers in SDG&E's service territory are excluded from the rate cap in implementation of AB 265, then "such customers should not be assessed for the balancing account, unless they are included in the capped rate by subsequent action." To guard against such inequities, we will exempt DA customers from any future cost recovery obligations associated with AB 265 rate ceiling benefits .

The rate stabilization plan in place for bundled service customers is retroactive to June 2000. Rates beginning last summer were far in excess of the 6.5 cent cap adopted by AB 265 and D.00-09-040, allowing SDG&E's bundled service customers to accrue substantial credits over the past year. DA customers over the same period, or even a portion of that time period, have not been offered similar benefits by SDG&E. Much of the concern expressed in protests on both sides of SDG&E's now withdrawn ALs 1264-E/E-A involve eventual repayment of deferred charges; choice about whether to accept the deferral and eventual collection, and customers being able to avoid repaying their fair share, increasing the burden on everyone else. While the cost recovery mechanism is beyond the scope of this resolution, we clarify that direct access customers are not responsible for payment of SDG&E's undercollections resulting from the rate ceiling.

Two protests in the context of ALs 1264-E/-E-A raise concerns that are relevant despite SDG&E's withdrawal. ARM raises the issue of how to deal with the repayment obligations of customers that leave or return to bundled service while the energy rate ceiling is in effect. TPC, which opposes extending the rate ceiling to DA customers, is concerned that customers can avoid their obligation to pay their portion of the undercollection if SDG&E accounts for undercollected revenues in the TCBA sub-account in a "pooled" rather than on an individual customer-by-customer month-by-month basis. We will not adopt individual tracking of AB rate ceiling benefits, because the vast majority of SDG&E's small customers are included in the plan.