STATE OF CALIFORNIA ARNOLD SCHWARZENEGGER, Governor
PUBLIC UTILITIES COMMISSION
505 VAN NESS AVENUE
SAN FRANCISCO, CA 94102-3298
August 1, 2008
TO PARTIES OF RECORD IN CASE 07-03-026, DECISION 08-08-001,
MAILED AUGUST 1, 2008.
On June 30, 2008, a Presiding Officer's Decision in this proceeding was mailed to all parties. Public Utilities Code Section 1701.2 and Rule 15.5(a) of the Commission's Rules of Practice and Procedures provide that the Presiding Officer's Decision becomes the decision of the Commission 30 days after its mailing unless an appeal to the Commission or a request for review has been filed.
No timely appeals to the Commission or requests for review have been filed. Therefore, the Presiding Officer's Decision is now the decision of the Commission.
The decision number is shown above.
/s/ ANGELA K. MINKIN
Angela K. Minkin, Chief
Administrative Law Judge
ANG:rbg
Attachment
ALJ/MCK-POD/rbg Date of Issuance 8/1/2008
Decision 08-08-001
BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA
California Building Industry Association, Complainant, vs. Southern California Edison Company (U338E), Defendant. |
Case 07-03-026 (Filed March 27, 2007) |
Vidhya Prabhakaran and James D. Squeri, for California
Building Industry Association, complainant.
Maricruz Prado and Michael D. Montoya, for Southern
California Edison Company, defendant.
DECISION GRANTING COMPLAINT
TABLE OF CONTENTS
Title Page
In this complaint case, we are called upon to determine whether, in 2006, defendant Southern California Edison Company (Edison or SCE) made a permissible change in the interpretation and implementation of one of its tariffs, Electric Rule 15.E.6, or whether - as the California Building Industry Association (CBIA) contends - the change violates Section 454 of the Public Utilities Code and Commission General Order (GO) 96-A, which generally prohibit changes by utilities in rates, services or practices without prior Commission authorization.
Electric Rule 15.E.6 concerns line extensions that do not yet serve enough load to recover their costs, and on which Edison is therefore entitled to a "monthly ownership charge" from the developer. Rule 15.E.6, the current version of which dates to 1995, is entitled "Unsupported Distribution Line Extension Cost" and provides as follows:
"When any portion of a refundable amount has not qualified for a refund at the end of twelve (12) months from the date SCE is first ready to serve, Applicant [i.e., the developer] will pay to SCE a Monthly Ownership Charge for administration and general (A&G) expense including Franchise Fees and Uncollectibles (FF&U), ad valorem tax, insurance, and operations and maintenance (O&M) in the percentages shown in Rule 2, Section H.2.c on the remaining refundable balance. Monthly ownership charges are in addition to the refundable amount and will normally be accumulated and deducted from refunds due to Applicant. This provision does not apply to individual residential Applicants."
The basis for the dispute here is that between 1995 and 2005 -- and, in fact, dating back to about 1970 -- Edison had deducted the monthly ownership charges from the developer's "remaining refundable balance," even if no refund was due to the developer. However, beginning in January 2006, after obtaining an opinion from its Regulatory Policy & Affairs (RP&A) Department that the prior practice had been incorrect, Edison began to bill the developers separately for monthly ownership charges when no refund was due. As of the date of hearings in this case, the amount that had been billed on account of this change in tariff interpretation amounted to approximately $1,451,000.
For the reasons set forth below, we conclude that Edison's change of tariff interpretation, and its consequent change in billing practice with respect to Rule 15.E.6, violates both Pub. Util. Code § 454 and GO 96-A. We therefore direct Edison to make refunds (with interest) to those developers who have paid bills for monthly ownership charges due to the change, and to cancel the bills for such charges that have not been paid.1 If Edison wishes to collect monthly ownership charges through separate billings, it should seek to amend Rule 15.E.6 through our advice letter process (or, if necessary, by application).
1. Procedural Background
The complaint in this case was filed electronically on March 27, 2007. On May 10, 2007, Edison electronically filed its answer, admitting it had changed its interpretation of Rule 15.E.6 in the final quarter of 2005, and alleging that its new billing practices were permissible under the language of the rule (and related rules and contracts).
A telephonic prehearing conference (PHC) was held on June 13, 2007. During the PHC, CBIA and Edison both agreed that the case was not likely to be susceptible to alternative dispute resolution, but could probably be disposed of on briefs, with no need for hearings.
However, after the assigned Administrative Law Judge (ALJ) stated that he thought questions might arise about the facts, a schedule for hearings was worked out. First, the parties agreed to file a joint stipulation of facts on August 15, 2007. To the extent they could not agree on factual matters, the parties would file opening testimony on September 12, 2007, and reply testimony on September 26, 2007. Five days were set aside for hearings beginning on October 29, 2007, although it was generally agreed that not all of this hearing time was likely to be necessary.
The parties adhered to this schedule, and hearings in the case were held on October 29 and 30, 2007. At the conclusion of the hearings, the ALJ directed the parties to file opening briefs on November 30, 2007, and reply briefs on December 14, 2007.
Owing to the press of other Commission business, the ALJ was not able to turn his attention to drafting a Presiding Officer's Decision (POD) in this case until late in the first quarter of 2008. Accordingly, on March 14, 2008, the Commission issued Decision (D.) 08-03-014, which extended the 12-month statutory deadline for the proceeding by six months, until September 26, 2008.
1 According to Exhibit (Ex.) 7 in this proceeding, of the $1,451,119 that Edison has billed as a result of its change of interpretation of Rule 15.E.6, only $730,714 has actually been paid.
