5. Discussion

We grant the petition for modification to the extent that we continue the bill limiter on all rate elements, including those in effect before 2001 and also the surcharges adopted in 2001. The petition is unopposed. The "rate increase" to other customers (even if funded differently than as proposed by petitioners) continues past policy on revenue shifts within the large customer group, and, as such, continues to be just and reasonable.

We decline to adopt petitioners' proposed funding mechanism, however. Petitioners' proposal to use the "catch-up" surcharge is unavailable since we did not end the "catch-up" surcharge on June 2, 2002. Rather, the "catch-up" surcharge continues, with the revenue tracked in a memorandum account for later disposition. (Resolution E-3776.³)

In the alternative, we adopt SCE's proposed funding approach. That is, SCE supports petitioners' proposal as long as a source of revenue is established. SCE offers to debit the approximately $29 million per year shortfall into the memorandum account created by Resolution E-3776. If the memorandum account balance is later returned to ratepayers, SCE proposes that the large power customers' share of the refund be reduced by the amounts debited for the additional bill limiter revenue deficiency. If the memorandum account balance is later recorded to the PROACT, SCE proposes that the revenue shortfall attributable to the bill limiter be recorded in a newly established memorandum account, and then collected from all large power customers in future rates. SCE proposes this as a workable accounting approach. We agree that it is workable and reasonable.

At the same time, however, we reaffirm our intention to examine and consider further treatment of the bill limiter (including the possibility of its complete elimination) in SCE's next GRC. (D.02-04-060, mimeo, page 30.) Petitioners agree with this approach.