Discussion

In D. 01-09-059, we determined that the commodity rates for SDG&E's residential time-of-use (TOU) rate schedules, Schedules DR-TOU and DR-TOU-2, should be the same as those for residential non-TOU rate schedules:

"To implement the 130% of baseline exemption requirement for residential TOU rate schedules, SDG&E recommends that the Commission tier commodity rates only using the same tiered rates applied for the non-TOU residential rate schedules, while leaving the TOU `signals' embedded in the transmission and distribution portion of these residential rates (i.e., DR-TOU). This approach is essentially consistent with the residential TOU rate design adopted for [Pacific Gas and Electric Company's] residential TOU rate schedules (Schedules E-7 and E-8) in D.01-05-064 (Appendix B, pp. 1-2). If the commodity rates are not tiered consistent with the non-TOU residential rate schedules, customers will have an incentive to switch rate schedules simply to avoid an increase, rather than because the schedule is more suitable to their needs. We agree with SDG&E that such perverse incentives must be avoided, and therefore approve this request." (Section 6.3 of D.01-09-059.)

Notwithstanding this intent, the rate template used to develop commodity rates in this proceeding did not reflect seasonal commodity billing determinants for Schedules DR-TOU and DR-TOU-2, and the Commission could not use the residential non-TOU seasonal commodity rates for those schedules. Instead, D.01-09-059 applied the summer residential non-TOU commodity rates for both summer and winter periods of Schedules DR-TOU and DR-TOU-2. The Commission stated that it might revisit this issue in a Rate Design Window or other appropriate proceeding.

SDG&E states that although the record in this proceeding does not show the seasonal commodity billing determinants for Schedules DR-TOU and DR-TOU-2, information needed to make the calculation is in the record. SDG&E proposes to calculate the seasonal billing determinants for Schedules DR-TOU and DR-TOU-2 using the same seasonal tiered billing determinant factors used to develop the seasonal billing determinants (usage breakdowns by tier levels) for residential non-TOU rates.

SDG&E proposes making changes to the DR-TOU and DR-TOU-2 commodity rates as soon as possible because the start of the residential winter season is November 1, and so that customers taking service under DR-TOU and DR-TOU-2 are billed the correct seasonal commodity rates and to mitigate any customer confusion. The current and proposed rates are shown below:

Schedules DR-TOU and DR-TOU-2

Winter Commodity Rates

Usage Level	Filed Rate (cents/kWh)	Proposed Rate (cents/kWh)
Up to 130% of Baseline	6.500	6.500
131% - 200% of Baseline	7.425	7.378
201% - 300% of Baseline	8.332	8.260
Above 301% of Baseline	9.915	10.068

SDG&E states that the proposed changes to the Schedule DR-TOU and Schedule DR-TOU-2 commodity rates will not impact the rates of any other rate schedule. SDG&E notes that while the rate changes proposed are very small, they are needed to correctly bill the commodity rates that were designed to collect the DWR revenue requirement.

SDG&E's petition includes proposed changes to Schedule EECC (Electric Energy Commodity Cost) to reflect the proposed DR-TOU and DR-TOU-2 commodity rates. In addition, the proposed EECC tariff reflects minor clean-up changes to make it less confusing to customers.

We concur that the commodity rates for residential Schedules DR-TOU and DR-TOU-2 should be changed to reflect the rates we intended to adopt if the DR-TOU and DR-TOU-2 billing determinants in the rate template had been displayed as seasonal billing determinants. We further agree with SDG&E that the effective date of this change be as soon as possible to avoid incorrect billing of DR-TOU and DR-TOU-2 customers. SDG&E's petition is therefore granted as set forth in the following order.