2. Background
SDG&E proposes in this proceeding to phase-out the rate cap on Tier 1 and Tier 2 usage. This phase-out proposal is designed to gradually eliminate the rate cap imposed by Water Code § 80110 by increasing the electric rates for SDG&E's Tier 1 and Tier 2 usage beginning on January 1, 2008, and ending on January 1, 2016. SDG&E proposes this annual increase to move electric rates for Tier 1 and Tier 2 usage closer to the actual costs of providing this service.
In the April 11, 2007 Scoping Memo and Ruling, we framed the phase-out proposal and the issues raised by the proposal into the following issue: "Can the Commission take any action on the AB1X rate freeze?"4
In the settlement that we approved for this proceeding in Decision
(D.) 08-02-034, the parties agreed to separate the AB1X rate cap issues from the other cost allocation and rate design issues addressed in that decision. The parties also agreed to waive evidentiary hearings on the AB1X issues, and agreed to a schedule for the filing of opening and reply briefs on the AB1X issues.
SDG&E provided testimony on its phase-out proposal in Exhibits 1 and 2. Some of the parties to the proceeding submitted testimony in opposition to SDG&E's phase-out proposal as reflected in Exhibits 15, 29, 30, and 36. Other parties submitted testimony in support of SDG&E's phase-out proposal, or to have the rate cap end as soon as possible, as reflected in Exhibits 1, 2, 17, 20, 26, 28, and 36.
Opening briefs on the AB1X issues were filed by SDG&E, the Division of Ratepayer Advocates (DRA), SCE, and The Utility Reform Network (TURN). Reply briefs were filed by SDG&E, DRA, Pacific Gas and Electric Company (PG&E), SCE, and TURN.5
In the February 5, 2008 Ruling of the Assigned Commissioner and Administrative Law Judge (ALJ), the parties were invited to file additional briefs on the issue of whether AB1X allows the Commission to order SDG&E to switch its Schedule DR residential customers to the residential time-of-use schedule (Schedule DR-TOU) that was in effect when AB1X took effect, once advanced metering infrastructure (AMI) meters are installed for residential customers. SDG&E, DRA, and TURN filed opening briefs, and a reply brief was filed by DRA.
4 Southern California Edison Company (SCE) correctly notes that Water Code § 80110 is technically a rate cap, as opposed to a rate freeze, because nothing in AB1X prevents rates from being decreased.
5 Although the phase-out proposal, if adopted, would only apply to SDG&E's customers, PG&E and SCE are interested in the issue because the rate cap applies to their residential customers as well.
