II. Background
District brought five causes of action2 against Edison alleging that Edison violated its duties under its tariffs by overbilling District for electricity sold to it under a standby contract. A previous decision granted Edison summary judgment on the 1st, 2nd, 4th, and 5th causes of action. The sole remaining issue, whether Edison violated its duty under Rule 12 to notify customers of a more favorable rate, is the subject of this opinion.
The District is an operator of a generating plant, known as the "Spadra Project," that burns methane gas that is produced at its landfill in Pomona California.3 In June 1986, District and Edison entered into a Power Purchase Contract (Purchase Contract), whereby the District agreed to sell and Edison agreed to purchase electricity produced by the Spadra Project. To deliver the electricity to Edison, District had to pay for the design, construction, and maintenance of a substation.
District and Edison entered into an Interconnection Facilities Agreement (Facilities Agreement), dated December 1988, regarding the construction of the substation. The Facilities Agreement called for placement of a 12 kilovolt (kV) revenue meter on the District side of the substation. Since 1991, when the Spadra Project began operation, Edison has applied a loss factor adjustment to the metered quantities of purchased electricity from District, and has paid District at an amount consistent with a 66 kV interconnection.
Separate and distinct from the Power Purchase Contract which governs the District's sale of electricity to Edison, District entered into an Application and Contract for Electric Service (Electric Service Contract), dated December 1989, for the purchase of standby electricity from Edison when District's facility was not generating electricity. This Contract specifies that service to the District's Spadra Project would be provided under Schedule TOU-8 and would be at a service voltage of 12 kV. Edison made its applicable prices and rules under Schedule TOU-8 available to District before the Contract was signed. In essence, the District paid a higher price for electricity purchased from Edison under the standby service contract [12 kV rate] than Edison paid to District for electricity generated by the Spadra Project [66 kV rate].4
At the time District selected 12 kV metering for the electricity it purchased from Edison, compensated metering5 was not available. Compensated metering became available in May of 1990 under Special Condition No. 16 of Schedule TOU-8. By utilizing compensated metering, the disparity between District's sales at the 66 kV rate and purchases at the 12 kV rate would be mitigated.
In order to utilize the compensated metering option, a customer must request such service and request installation of a compensated metering device. When District learned of the availability of compensated metering in January 1999, it requested installation of the device, incurred a one-time cost of under $3,000, and began saving approximately $6,000 per month in electricity purchased from Edison for standby service.
On October 27, 1999, District filed a complaint against Edison for alleged billing overcharges and tariff violations. The complaint requested relief in the form of a refund in the amount the District alleges it was overcharged due to Edison's violations. On December 9, 1999, Edison filed an answer to the complaint admitting that the issues are whether Edison overcharged the District for electric services and violated the tariffs. In addition, Edison raised numerous affirmative defenses it alleges support the dismissal of the complaint and the denial of relief sought by District.
On September 22, 2000, the Administrative Law Judge (ALJ) issued a Draft Decision (DD) granting Edison's motion for summary judgment as to all five causes of action. District filed comments to the DD, raising the issue that District did not receive notice, as required by Rule 12, of the new or revised rate available under Special Condition 16.
In summary, Rule 12 required Edison to inform its customers when a new or revised pricing option is available. In April 1990 Edison received authorization to offer compensated metering for certain customers. Such metering could result in service at a "more favorable" rate. Edison notified its customers in May 1990 of this new option by way of Advice Letter 864 (AL-864).
District claimed in its comments to the DD that it did not receive AL-864. To support this contention District submitted Edison's own service list for the AL-a list that did not include an entry for District, or indicate that the AL had been sent to any District address.
Accordingly, the Commission found that a material issue remained; namely, whether Edison served AL-864 on District, or used other reasonable means to inform District of the availability of compensated metering. Because a material issue remained unresolved, D.01-02-071 denied Edison's motion for summary judgment/adjudication on the 3rd cause of action and ordered the parties to submit additional briefing and testimony on this issue.
2 Billing error; violation of Tariff under Schedule TOU-8; violation of Tariff under Rule 12; Breach of the Covenant of Good Faith and Fair Dealing; and Unjust Enrichment.3 District also operates other generating plants including one in Palo Verde. The Palo Verde plant, although smaller than the Spadra facility, operates under similar buy/sell contracts.
4 In contrast to the Spadra facility, at District's Palo Verde facility, electricity purchased from Edison is connected at 12 kV but is billed at the lower 66 kV rate. 5 Compensated metering allows for an adjustment for transformer losses so that a customer pays for electricity at 66 kV level, which is less expensive than electricity measured at 12 kV level.
