2. Discussion

We must be responsive to pending and new requests for exemption from rotating outages, and have a process to expeditiously consider those requests. Summer 2001 is fast approaching, and we must respond quickly.

At the same time, however, every additional exemption reduces the pool of customers from which to draw for rolling outages. The potential frequency and duration of rotating outages experienced by remaining customers is increased as the pool of candidate customers is reduced. Moreover, maintenance of a reasonable pool of customers available for rotating outages is vital to have rotating outages as a tool in protecting the state from widespread system collapse when demand otherwise exceeds supply. We must balance the need to exempt some customers with the need to maintain as large a pool as possible.

The existing Priority System for Rotating Outages takes several factors into account, including, but not limited to, the most important public benefits; greatest public need; economic, social and other effects of a temporary discontinuance of electrical service; and allocation rules, orders and regulations of the federal government. (Pub. Util. Code Sections 2771 and 2772.) In large measure, these factors result in eligibility for essential customer status based on public health and safety (e.g., fire, police, prisons, national defense, hospitals, water and sewer utilities for such purposes as fire fighting).

We do not seek to disturb the existing balance of these factors as now reflected in the essential customer list. At the same time, however, we must consider additional ways to be responsive to pending and new requests for essential customer status.

We conclude that we should not disturb the existing balance of factors, but that we should provide a limited, further classification. To do this, we further

modify the essential customer list to allow exclusion of additional customers as necessary to protect public health and safety. This limitation balances the public interest in exempting a limited set of additional customers with the public interest in maintaining as large a pool from which to draw for outages as possible. It considers equity between customers, achieves the most important overall public benefit, and meets the greatest public need by, to the extent reasonably possible, mitigating the risk of a widespread electrical system collapse and the devastating effects that would result from such collapse.

To qualify for this category, a customer must show that inclusion of the customer in a rotating outage presents unacceptable jeopardy, or imminent danger, to public health and safety. This jeopardy or danger must be beyond economic harm or inconvenience to the customer. Rather, it must be jeopardy or danger to wider public health and safety.

We anticipate a substantial administrative burden associated with the processing of pending and new requests for exemption from rotating outages prior to the summer of 2001. Processing such requests within a short time period is an extraordinary circumstance which requires the Commission to act in a fair and timely fashion to expand the list of essential use customers for the purpose of alleviating jeopardy or imminent danger to the general public health and safety. We find that this extraordinary circumstance justifies contracting for consultant or advisory services on an expedited basis, as set forth in Public Utilities Code Section 632.

Pursuant to Public Utilities Code Section 1708, the Commission may rescind, alter or amend a prior decision upon notice to parties, along with the opportunity to be heard. Notice of the amendment to D.01-04-006 was provided by the filing and service of a Draft Decision on all parties, with the opportunity to file and serve comments and reply comments. No party requested hearing on the proposed change.