2. Background
D.97-10-087 approved tariff provisions and related agreements necessary to implement a statewide DA program, as part of electric industry restructuring in California.3 That decision authorized the UDCs to begin charging interim fees for discretionary DA services.4 UDCs were authorized to book the interim fees and costs of providing discretionary DA services to a one-way memorandum account subject to refund.5 Although UDCs were allowed to collect interim fees for discretionary DA services, D.97-10-087 stated that the authority granted was not to be construed as a decision on the merits of the interim tariffs or approval of the fees charged by the UDCs.
D.97-10-087 did not authorize UDCs to charge fees for non-discretionary DA services. However, UDCs were allowed to book costs for non-discretionary DA services to a memorandum account,6 pending a later determination regarding the appropriateness of those costs and possible recovery under Pub. Util. Code § 376.7 D.97-10-087 anticipated that issues concerning the appropriateness of the fees would be considered in a future ruling or decision.8 However, UDCs were authorized to charge fees for non-discretionary services related to ESP consolidated billing services, and Resolution E-3582 approved fees for those services.9
As with discretionary service, D.97-10-087 stated that the authority granted for memorandum account treatment of non-discretionary DA service costs was not a decision on the merits, and a subsequent decision would consider the appropriateness of those costs and their recovery.10 In D.99-09-064, the Commission approved a settlement of issues related to industry restructuring implementation costs pursuant to § 376 costs, including recovery of certain DA costs.11
SCE offers discretionary and non-discretionary services to ESPs and primarily DA customers through three rate schedules: Schedule ESP-DSF (ESP - Discretionary Service Fees), Schedule CC-DSF (Customer Choice - Discretionary Service Fees), and Schedule ESP-NDSF (ESP - Non-Discretionary Service Fees).12 Schedule ESP-DSF applies to ESPs who choose to receive certain metering, billing and other DA-related services from SCE. Schedule ESP-NDSF applies to ESPs who require certain services from SCE to offer optional services to customers. Schedule CC-DSF applies to DA customers who request certain meter-related services from SCE. Schedule CC-DSF also applies to bundled service customers not participating in DA who request meter-related services which are not already provided for by their applicable default rates. If Community Choice Aggregation (CCA) is implemented in SCE's service territory, Schedule CC-DSF will also apply to any CCA customers who request additional meter-related services.
On January 26, 2007, SCE filed Application (A.) 07-01-045 (Application) requesting authority to add, delete and make revisions to the service fees in Schedules ESP-DSF, ESP-NDSF, and CC-DSF to reflect current processes and costs; to re-title the DA tariffs to eliminate the discretionary/non-discretionary categorization of fees, and to use the advice letter process for establishing new DA service fees. The Application also seeks approval of SCE's incremental cost methodology and cost-causation principles that were used in developing the DA and other service fees.
The Application states that SCE's existing DA service fees are outdated and require updating to reflect current costs and current DA processes which have changed since 1998. SCE previously sought in A.99-06-040 to revise its DA service fees and establish new fees. However, the Commission dismissed A.99-06-040 in 2003 without prejudice because no decision had been rendered, and the record had become stale as a result of attention diverted to the California energy crisis.13
SCE represents that its proposed changes to the rate schedules and service fees reflect current DA processes and costs. SCE is proposing to revise the existing DA service fees by increasing 11 and reducing 20 of the existing service fees, and changing five existing service fees from a fixed rate to a time and materials (T/M) basis. SCE is also proposing to remove 38 existing service fees, and add 47 new service fees.
SCE states that, because it is proposing that all DA service fees receive cost-of-service regulatory treatment, it also seeks to eliminate the "discretionary/non-discretionary" service fee classifications.14
Notice of A.07-01-045 appeared on the Commission's Daily Calendar on January 30, 2007. A protest was received on March 1, 2007, from AReM, and a response to the Application was received from the Division of Ratepayer Advocates (DRA) on March 1, 2007.
A prehearing conference (PHC) was held on March 29, 2007, where SCE, AReM, DRA and other interested parties were in attendance.
On April 23, 2007, the assigned Commissioner issued a ruling and scoping memo (Scoping Memo) establishing a procedural schedule and identifying the following issues for consideration:
1. Should the Commission approve the proposed revised schedules and service fees?
2. Should SCE be authorized to add certain service offerings and fees that were not included in the original schedules?
3. Should SCE be authorized to remove certain offerings that are no longer relevant?
4. Should the Commission approve SCE's incremental cost methodology for calculating the service fees? Is the methodology used for calculating the proposed fees appropriate? Does the methodology help reduce cost shifting? If so, which cross-subsidies are reduced, and which ones remain?
5. Is the cost information used to calculate the proposed fees reliable and accurate?
6. What impact, if any, will SCE's advanced metering infrastructure proposal have on the proposed fees or meter-related costs?
7. Do the proposed fee changes raise any issues related to potential impacts on SCE's revenue requirement that should be considered?
8. How will the proposed fees affect CCA customers, bundled service customers and/or residential DA customers in California?
9. Should the Commission authorize an advice letter procedure for establishing new service fees?
The Scoping Memo also determined that the proceeding should consider only SCE's proposed incremental costs, cost methodology, and the appropriateness of that methodology for calculating SCE's DA service fees. The proceeding would not consider what DA services and fees other utilities may have in place. The Scoping Memo determined that the DA services provided by other utilities or the costs of other utilities' DA services were not sufficiently relevant to SCE's DA program to justify the additional burden placed on parties to consider those other utilities' DA programs and the likelihood of doing so substantially delaying this proceeding. The Scoping Memo also determined that this proceeding would not consider the timing of when SCE's DA services and fees should be next examined, or whether SCE's proposed fees should be reexamined if and when the DA market reopens.
AReM and the CMTA served joint filed testimony on June 22, 2007. SCE served rebuttal testimony on July 16, 2007. An evidentiary hearing (EH) was held on August 28, 2007, where AReM, CMTA, DRA and SCE were in attendance.
In the EH, AReM, and CMTA requested, and SCE agreed to provide, additional exhibits after the close of hearings. On August 31, 2007, SCE served via electronic mail four documents in response to AReM's and CMTA's request.15 A September 5, 2007 Administrative Law Judge's (ALJ) ruling identified and marked the exhibits, and the exhibits were moved into the record on September 7, 2007 without objection.16
SCE, AReM, and CMTA filed opening briefs on September 21, 2007, and SCE and AReM filed reply briefs on October 5, 2007. No oral argument was held, and the proceeding was submitted upon the filing of reply briefs.
3 D.01-09-060, as modified by D.01-10-036, suspended the right to enter into new contracts or agreements for DA service. That suspension remains in effect.
4 D.97-10-087 defines "discretionary services" as those services for which there are sufficient providers to ensure customer choice. "Non-discretionary services" are those services for which the Commission determines that there are insufficient providers to ensure customer choice. (Finding of Fact (FOF) 22 and Footnotes 11-12 (76 CPUC2d, 330, 377.)
5 D.97-10-087, Ordering Paragraph (OP) 7 (76 CPUC2d, 335).
6 D.97-10-087, OP 8 (76 CPUC2d, 335).
7 All statutory references are to the Public Utilities Code, unless otherwise noted.
8 76 CPUC2d, 306 - 308.
9 D.98-09-070.
10 76 CPUC2d, 307.
11 2 CPUC3d, 396.
12 Unless otherwise indicated, "customer" or "end-use customer" refers to DA end-use customers, Community Choice Aggregator end-use customers and bundled service end-use customers who request certain additional billing and metering services which are not included or provided for in their applicable default rates.
13 D.03-01-072, p. 3.
14 Application, p. 4.
15 TR 26 -28, 31.
16 These exhibits are identified as Exh. SCE-3 through Exh. SCE-6.
