ALJ/KLM/hl2 Mailed 4/16/2007

Decision 07-04-007 April 12, 2007

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Order Instituting Rulemaking to Implement Portions of AB 117 Concerning Community Choice Aggregation.

Rulemaking 03-10-003 (Filed October 2, 2003)

ORDER ADOPTING MODIFICATIONS TO THE COST RESPONSIBILITY SURCHARGE APPLICABLE TO THE CITY OF CERRITOS
COMMUNITY CHOICE AGGREGATORS

This order adopts certain modifications to the "cost responsibility surcharge" (CRS) charged by Southern California Edison Company (SCE) to the City of Cerritos (Cerritos), which by statute is subject to the CRS applied to Community Choice Aggregators (CCAs). These changes are consistent with those adopted in Decision (D.) 06-07-030 for the CRS applied to direct access customers and municipal departing load customers.

Background

Cerritos has provided retail electric services to the local community since mid-2005 as a publicly-owned utility. Public Utilities Code Section 366.1 provides Cerritos, as owner of the Magnolia Power Project, with a right to act as a "community aggregator" and provide electric services to customers. Those customers must pay to SCE a CRS, a charge that recovers from former SCE customers costs SCE incurred on their behalf. Consistent with an agreement between Cerritos and SCE which this Commission adopted, the CRS paid by Cerritos' customers to SCE is the CRS applicable to CCA customers.¹ D.05-01-009 adopted the settlement and Resolution E-3990 approved SCE's related tariffs setting the initial CRS at $.02. This CRS was suspended in May 2006 because the level of the charge was substantially higher than SCE's actual liabilities and the imposition of the charge was therefore resulting in a large overcollection of the charge from Cerritos. Resolution E-3990, and D.05-01-009 anticipated that overcollections and undercollections of the CRS would be "trued up" to conform to the requirement of Assembly Bill (AB) 117 that the utility collect exactly those liabilities it incurred as a result of the CCA's customers leaving the utility system. These provisions, which we have implemented in significant detail, satisfy AB 80 which applies only to owners of the Magnolia plant, now Cerritos.

¹ AB 117 established the rights and obligations of CCAs and the Commission has implemented the statute in this docket. No California customers are yet served by a CCA, although many cities and counties have either created a CCA or stated an intent to create one, which would permit the city or county to sell electricity directly to electricity customers within their respective jurisdictions.