II. Introduction
Today's decision addresses the issue of Direct Access (DA) customers' cost responsibility and related issues that were specified for further proceedings in Decision (D.) 02-03-055, which kept in effect the suspension date for DA ordered in D.01-09-060.1 Today's decision establishes mechanisms to implement surcharges applicable to DA customers within the service territories of California's three major electric utilities: Southern California Edison Company (SCE), Pacific Gas and Electric Company (PG&E), and San Diego Gas & Electric Company (SDG&E). The surcharges adopted in this decision required to hold DA customers responsible for their share of costs as explained herein, and to prevent such costs from being unlawfully and unfairly shifted to "bundled" utility customers.
Although in D.02-03-055, we permitted DA customer contracts entered into on or before September 20, 2001, to remain in effect, we did so on the condition that bundled customers would not be adversely impacted in terms of cost impacts. Specifically, we required that there be no shifting of costs caused by customers migrating from bundled to DA load.2
These costs are comprised of: (1) costs incurred by the California Department of Water Resources (DWR) on behalf of customers in the service territories of the three major utilities, and (2) costs incurred by each of the utilities through their own resources and contracts.
In pleadings and testimony of parties in this proceeding, a variety of terms have been used to refer to the charges to be imposed on DA customers pursuant to D.02-03-055. These terms have included expressions such as "nonbypassable charge," forward or ongoing costs, and "exit fee." For the sake of uniformity and clarity, we shall use the term DA "cost responsibility surcharge" (DA CRS) as an umbrella term taking into account all of the various charge components at issue in this proceeding that are necessary to hold DA customers responsible for the appropriate charges as adopted in this order.
In this order, we adopt the necessary measures and processes, in conjunction with companion proceedings in Application (A.) 00-11-038 et al. to implement DA CRS for DWR historic costs incurred during 2001-2002, for 2003 prospective costs, and also a process for periodic updating in subsequent years. The CRS shall be determined on a total portfolio basis, taking into account both DWR and utility-procured resources, and shall reflect DA customers' respective share of costs associated with those resources. The DA CRS shall be composed of the following elements:
(1) DWR Bond Charge. The actual amount of this charge for DA customers shall be computed and implemented through a separate decision in the Bond Charge Phase of A.00-11-038 et al. Implementation of the Bond Charge applicable to DA customers will become effective only after any legal challenges of the decision have been exhausted, as explained in the Bond Charge decision.
(2) DWR power charge covering DA customers' share of procurement costs between September 21, 2001 and December 31, 2002, representing DA customers' share of the uneconomic portion of DWR costs incurred after DA suspension but prior to the implementation date for the instant order.3
(3) DWR power charge applicable to prospective costs for calendar year 2003, representing DA customers' share of the uneconomic portion of prospective DWR costs. The principles and criteria underlying the determination of DA cost responsibility for this component shall be determined as prescribed in this order.
(4) A separate charge to cover the ongoing above-market portion of utility-related generation costs, as we explain in further detail below.4
The DA CRS components shall be applicable to DA customers on the following basis. The DWR Bond Charge shall be applicable to all DA customers except for those that have been continuously subscribed to DA both before and since DWR began its power purchase program. The DWR Power Charge shall be applicable to all incremental DA load that took bundled service on or after February 1, 2001. Continuous DA customers that remained on DA both before and after February 1, 2001 shall be excluded from the DWR Power Charge. All DA customers, irrespective of the date they began to take DA service shall be required to pay the URG-related component of the DA CRS. The payment of charges by DA customers shall be subject to an overall cap of 2.7 cents/kWh, subject to the terms, conditions, and limitations set forth in this order.
1 The issues of "Departing Load" (DL) cost responsibility are deferred to further proceeding and to a separate decision. Further, today's decision does not address the Rule 4 ("switching exemption") issue, which is a matter in the instant rulemaking proceeding arising from a limited rehearing granted in D.02-04-067 on this issue. Resolution of this issue also is deferred. 2 DA customers purchase electricity from an independent electric service provider (ESP), and receive only distribution and transmission service from the utility. "Departing Load" customers are those customers who leave the utility, and thus, receives no electricity, distribution and transmissions service from the utility. "Bundled" customers, however, rely on the utility for all these services. Distribution and transmission charges are "bundled" with a charge for the procurement of energy supplies. 3 The actual final amount of the DWR power charges shall be based on the specific forecast variables underlying the 2003 DWR revenue requirement that will be implemented in A.00-11-038 et al. proceedings. 4 In addition, DA customers in the SCE service territory currently pay a "Historic Procurement Charge" to SCE pursuant to D.02-07-032.
