3. Settlement Terms
A "March 2, 2006 Agricultural Applicability Statement" is included as part of the Agricultural Definition Settlement. The Settling Parties propose that Section A of that statement would replace each of the current agricultural tariff applicability statements. Section A reads as follows:
A. Applicability
1. A customer will be served under this schedule if 70% or more of the annual energy use on the meter is for agricultural end-uses. Agricultural end-uses consist of:
(a) growing crops,
(b) raising livestock,
(c) pumping water for irrigation of crops, or
(d) other uses which involve production for sale.
2. Only agricultural end-uses performed prior to the First Sale of the agricultural product are agricultural end-uses under this criteria, except for the following activities, which are also agricultural end-uses under this criteria: (a) packing and packaging of the agricultural products following the First Sale and before any subsequent sale, and (b) agricultural end-uses by nonprofit cooperatives.*
3. None of the above activities may process the agricultural product. Residential dwelling, office, and retail usage are not agricultural end-uses.
4. Rule 1 specifies additional activities and meters that will also be served on agricultural rates, and guidelines through the following sections: (B) Other Activities and Meters Also Served on Agricultural Rates, (C) Specific Applications of the March 2, 2006 Applicability Criteria, and (D) Guidelines for Applying the Applicability Criteria.
* Guidelines for interpreting this applicability statement are set forthwith in Section D.
The Settling Parties propose that the entire applicability statement,7 which includes Sections A through E, be included as a Rule 1 definition in its electric tariffs.
Section B includes grandfathering provisions whereby specific activities previously determined in Commission decisions to be agricultural end-uses will continue to be considered agricultural end-uses.8 Certain similar activities, most of which were previously determined by PG&E to be agricultural end-uses, will also be considered agricultural end uses going forward.9 Section B also provides for meters that are on agricultural rates prior to March 2, 2006 remaining on agricultural rates providing (1) energy usage on the meter continues to meet the Applicability Statement in effect at that time, and (2) metered usage remains, without interruption, in the name of the present account holder.10
For clarification purposes, especially as to the processing of agricultural products (Section A.2.), Section C specifies numerous activities that are, and are not, agricultural end-uses.
Section D contains guidelines for applying the applicability criteria. Definitions and requirements related to production for sale, packing and packaging, nonprofit cooperatives, "First Sale," processing, processing operation, agricultural product, and harvest operation are specified.
Section E clarifies which applicability statement (current or proposed) would be applicable in determining the specified Tariff Rule 17.1 adjustments, in the pre- and post- March 2, 2006 time periods.
Regarding the grandfathering provisions, customers who have been on PG&E's agricultural rate schedules prior to March 2, 2006 will be grandfathered onto the existing agricultural applicability criteria (i.e., be allowed to remain on agricultural rates even if they do not qualify under the proposed settlement criteria). In addition, customers who filed formal CPUC complaints prior to March 2, 2006 that have not yet been decided and who are subsequently successful, will also be grandfathered. Customers who seek agricultural rates and/or file formal complaints on or after March 2, 2006 will not be subject to grandfathering.
Customers who apply for PG&E service and who are placed on agricultural rates on or after March 2, 2006 and prior to the effective date of this decision will have been notified that their status as agricultural customers is potentially subject to change and they may therefore only be agricultural customers on an interim basis. All adjustments of rate applicability for the interim customers will be consistent with this decision and will be prospective from the effective date of this decision. The Settling Parties believe that this interim treatment was required to ensure that there would be no perverse incentives to commence litigation to fit within the grandfathered customer classification.
7 A copy of the entire Agricultural Definition Settlement, including the Agricultural Applicability Statement, is contained in Appendix B.
8 These activities include milk processing, cotton ginning, almond hulling and shelling, and a feed mill integral to the operation of an agricultural end-use.
9 These similar activities include sun-dried raisin packing, pistachio hulling and shelling, rice drying, hulling and milling necessary to produce white rice, and packing of brown and white rice, but no grinding, crushing, parboiling, cooking, or gelatinizing of rice.
10 For transfers of ownership, specific exceptions (e.g., lineal descendents) for remaining on agricultural rates are included.
