6. Submission of Proceeding
This case was deemed submitted on December 14, 2007, when CBIA and Edison both submitted reply briefs on the issues litigated at the hearings.
1. Under Edison's Electric Rule 15.E.6, SCE is permitted to recover monthly ownership charges from developers who have paid for a line extension in those situations where the load on the extension is insufficient to cover its costs.
2. Versions of a rule allowing Edison to recover monthly ownerships charges from developers on line extensions with insufficient load have been in existence since at least the 1930s.
3. From the late 1960s until 1985, predecessor versions of SCE Rule 15.E.6 expressly provided that "payment of [monthly] ownership charges will normally be made by deduction from the developer's advance."
4. The language quoted in FOF 3 was understood by Edison and everyone in the building industry to mean that monthly ownership charges would be deducted from the developer's remaining refundable balance, even in those months for which no refund was due to the developer.
5. Under the contracts that Edison enters into with developers pursuant to SCE Rule 15, any portion of the advance paid by a developer that has not been refunded to the developer within 10 years after the date SCE first gives notice of its readiness to serve reverts to Edison.
6. Edison uses moneys that revert to it pursuant to the policy described in FOF 5 to reduce the amount of the rate base on which SCE's future rates are calculated.
7. The January 2006 change of policy that CBIA is challenging in this case is likely to increase the amounts that revert to Edison pursuant to the contract provision described in FOF 5, although the amount of the increase is difficult to quantify.
8. In 1995, the predecessor of Rule 15.E.6 was amended to state that "monthly ownership charges are in addition to the refundable amount."
9. SCE Electric Rule 15 and contracts entered into pursuant to this rule are administered by Edison's Ledgers Department.
10. Despite the 1995 addition of the language quoted in FOF 8, Edison's Ledgers Department continued to deduct monthly ownership charges from the remaining refundable balances of developers, whether or not a refund was due to a developer for a particular month.
11. The SCE Ledgers Department did not update its in-house LAS computer program, which calculates remaining refundable balances, to reflect the 1995 change of language quoted in FOF 8.
12. Pursuant to advice received from Edison's RP&A Department, the SCE Ledgers Department changed its practice in January 2006 and began to bill developers separately for monthly ownership charges for those months in which a refund was not due on the developer's remaining refundable balance.
13. Since January 2006, the SCE Ledgers Department has made no change to its practice of deducting monthly ownership charges from the refund due to the developer for those months in which a refund is owed to the developer.
14. The total amount that SCE has billed to developers pursuant to the change of policy described in FOF 12 totaled approximately $1,451,100 as of the date of hearings in this case.
15. Of the total amount billed to developers pursuant to the change of policy described in FOF 12, approximately $730,700 has been paid.
16. Of the total amount billed to developers pursuant to the change of policy described in FOF 12, approximately $720,400 has not been paid.
1. Because it results in developers having to pay additional funds to cover charges for which they are liable, the change of policy described in FOF 12 constitutes an alteration of a practice that has resulted in a new rate within the meaning of Pub. Util. Code § 454.
2. Because it results in developers having to pay additional funds to cover charges for which they are liable, the change of policy described in FOF 12 constitutes a change that results in "lesser service or more restrictive conditions at the same rate or charge" within the meaning of Section VI of GO 96-A.
3. The change of billing policy described in FOF 12 is violative of both Pub. Util. Code § 454 and GO 96-A because Edison did not seek Commission approval before instituting this policy change.
4. Edison should be required to refund with interest the $730,714 that, as of the date of hearings in this case, had been collected from developers pursuant to the change of policy described in FOF 12.
5. Edison should be required to cancel the $720,405 in bills that were based upon the change of policy described in FOF 12 and that, as of the date of hearings in this case, had not been paid by developers.
6. If Edison wishes to bill developers separately for monthly ownership charges owing for those months in which no refund is due to the developer on the advance the developer has paid, Edison should seek the Commission's permission to do so either by application or through the Commission's advice letter process.
7. This order should be made effective immediately to prevent further improper billings and to refund as soon as possible the improperly collected charges.
IT IS ORDERED that:
1. The complaint herein is granted.
2. Within 30 days after the effective date of this decision, Southern California Edison Company (Edison) shall issue refunds, with interest, to those developers that have paid bills issued on or after January 1, 2006 for monthly ownership charges assessed for months in which no refund was due to the developer under Edison's Electric Rule 15 and related contracts.
3. Within 30 days after the effective date of this decision, Edison shall cancel the outstanding bills that have not been paid by developers who, after January 1, 2006, were billed by Edison for monthly ownership charges assessed for months in which no refund was due to the developer under Edison's Electric Rule 15 and related contracts.
4. Prior to issuing any bills for monthly ownership charges assessed for months in which no refund is due to a developer on the advance the developer has paid pursuant to Edison's Electric Rule 15, Edison shall seek, either by advice letter or application, Commission authority for the issuance of such bills.
5. Case 07-03-026 is closed.
This order is effective today.
Dated July 31, 2008, at San Francisco, California.
