2. Background

SDG&E filed a Rate Design Window Application for authority to make various rate design changes, and to update specific marginal costs, effective January 1, 2006, pursuant to the extensions granted in letters from the Executive Director dated January 26, 2005 and October 15, 2004 and otherwise in accordance with the schedule adopted in Commission Decision (D.) 89-01-040, as modified by D.02-10-039, D.95-09-020, and D.94-08-023. SDG&E identified three primary objectives for the application:

adjust electric revenue allocations and rates towards "cost-based levels" arguing that there is a need to reduce "cross-subsidies in the rates of non-residential customer classes."

provide customers "more cost-based commodity price signals" which SDG&E proposes to accomplish by transferring what it has identified as any "remaining cross-subsidies" to a new "non-bypassable charge."

ensure all customer classes bear responsibility for the residential subsidies mandated by Assembly Bill 1X ("AB1X"), including Community Choice Aggregation and Direct Access customers.