ALJ/CFT/hkr Mailed 1/21/2003

Decision 03-01-037 January 16, 2003

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Order Instituting Rulemaking on the Commission's Own Motion to Determine Whether Baseline Allowances for Residential Usage of Gas and Electricity Should Be Revised.

Rulemaking 01-05-047 (Filed May 24, 2001)

(See Attachment A for List of Appearances.)

INTERIM OPINION IN PHASE 2 APPROVING SETTLEMENT
ON COMMON AREA ACCOUNTS

TABLE OF CONTENTS

Title Page

INTERIM OPINION IN PHASE 2 APPROVING SETTLEMENT
ON COMMON AREA ACCOUNTS 22

I. Summary 22

II. Background 22

A. Procedural History 22

B. Context 55

III. Summary of Modified Stipulation 66

IV. Discussion 99

A. Legal Standard 99

B. Choice Between Residential and Commercial Rate Schedules 1010

1. Customer Impacts 1010

2. Discussion 1212

C. Treatment of New Common Area Accounts 1414

D. Meter Installation and Reprogramming 1515

E. Customer Notice 1515

F. Revenue Shortfall 1616

G. The Settlement Taken as a Whole 1717

V. Comments on Proposed Decision 1919

VI. Assignment of Proceeding 2020

Findings of Fact 2020

Conclusions of Law 2323

INTERIM ORDER 2525

Attachment A: Appearances

Attachment B: Stipulation on Common Area Accounts
in Baseline OIR Phase 2 (Parties' Modified Version)

INTERIM OPINION IN PHASE 2 APPROVING SETTLEMENT
ON COMMON AREA ACCOUNTS

I. Summary

In this opinion, we approve the modified settlement submitted on July 15, 2002, regarding Pacific Gas and Electric Company's (PG&E) residential common area electric accounts. This settlement provides PG&E's common area electric accounts, which are currently served on residential rate schedules, the option to be served on commercial rate schedules. We find that the five-tier residential rate structure adopted in Decision (D.) 01-05-064 is not well suited for application to common area accounts, particularly those with very high usage. The adopted settlement will ameliorate the disproportionately high bill impacts of the residential rate structure on PG&E's larger common area accounts.

In keeping with Rule 51 et seq. of the Commission's Rules of Practice and Procedure (Rules), we approve the modified settlement as being reasonable in light of the whole record, consistent with law, and in the public interest.