II. DISCUSSION
A. The Bond Charge Rehearing Decision Should Be Modified in Order to Apply the Bond Charge to Residential Sales Of Up To 130% of Baseline Usage in All Three Service Territories.
The Applicants request that the Commission grant rehearing of Decision 02-11-074 (Bond Charge Rehearing Decision) to require inclusion of all residential usage up to 130 percent of baseline in the calculation of the bond charges for each of the three utilities to the maximum extent possible.1 To the extent that the bond charge cannot be recovered from residential usage below 130 percent of baseline on the San Diego Gas & Electric Company (SDG&E) system, they propose that that issue be addressed for SDG&E on an intra-utility basis, to avoid shifting SDG&E's proper share of the Department of Water Resources (DWR) bond charge costs onto customers of PG&E and the California Edison Company (SCE).2 The Applicants argue that the Commission's determination improperly shifts more bond costs to the non-exempt customers solely because of a perceived problem with SDG&E.
The basis for the Commission's Decision on Rehearing was that there was a problem in the fact that SDG&E's customers were treated differently from other utilities' customers, thus resulting in a cost shift between service territories, and that this result was not sufficiently justified. In order to treat these customers the same in all three service territories, the Commission could legally (without any risk of unlawful discrimination between service territories) either 1) exempt all residential usage under 130% of baseline from the bond charge; or 2) impose the bond charge on all such usage. As a matter of policy, as explained in Attachment A to D.02-11-074, the Commission determined to pursue the first option. Although we do not agree with Applicants that there is any legal error in this approach, upon further consideration we have determined that in fact, the bond charge should be imposed on customer usage below 130% of baseline. Our reasoning for including this usage in the calculation of the bond charge is set forth in Appendix A to this decision. We find that the simplest way to achieve this result is to modify the entire text of the Original Bond Charge Decision, D.02-10-063, as we adopted it on October 24, 2002, to read as shown in Appendix A attached to this decision.
We recognize that the modifications we are ordering today will require other charges to be reduced in equal or greater amounts to maintain rates for SDG&E residential customer usage up to 130% of baseline at today's levels. However, Ordering Paragraph 4 of D.02-10-063 already requires the utilities to impose offsetting decreases in charges for electricity energy costs as part of their compliance advice letter filings that impose a per kWh charge on non-exempt bundled consumption to insure that overall rates are not raised at this time.
We also note that pursuant to Ordering Paragraph 9 of D.02-10-063 SDG&E is already directed to "establish a balancing account to track the amounts it remits to DWR and thus allow it to seek a rate change, to the extent necessary, to permit recovery of its own authorized costs independent of these increased remittances to DWR. This balancing account will not affect remittances to DWR at any time, but is simply an account to allow SDG&E to recover ultimately its own authorized costs from its own customers entirely independent of its remittances to DWR." Pursuant to Ordering Paragraph 9, SDG&E should track the amounts it remits to DWR and seek a rate change, if necessary, to permit recovery of its own authorized costs. SDG&E should file a separate application with the Commission in order to seek a rate change to recover any resulting shortfall. Because of the prospective availability of this relief, it is not necessary for the Commission to address in this decision any potential shortfall in SDG&E's future recovery of its authorized costs. Rather, the Commission will address this issue if and when SDG&E applies for a rate change to make up any such shortfall.
B. The Applicants' Claim That the Decision on Rehearing Was Adopted Without Hearing and Opportunity for Comment Is Without Merit.
The Applicants claim that the Decision on Rehearing is arbitrary and capricious because it was issued without further hearing and opportunity to brief the issues. This argument is without merit. The Decision on Rehearing adopts the same outcome as in the ALJ's Proposed Decision. That Proposed Decision was circulated to the parties for comment, and the Applicants had an opportunity at that time to be heard on the proposal to exempt all residential usage up to 130% of baseline from the bond charge. In addition, in its application for rehearing of the Original Decision, TURN argued that the Commission should exempt all 130% of baseline usage from the bond charge. The Applicants had an opportunity to comment at that time in a response to that application for rehearing. Since the parties had an adequate opportunity to file comments and be heard on the issue of exempting 130% of baseline usage from the bond charge, the Applicants' allegation of legal error is without merit.
THEREFORE, IT IS ORDERED that:
1. The Application for Rehearing of Decision 02-11-074 is granted, as discussed herein, in order to include residential sales of up to 130% of baseline usage in all three service territories in the bond charge calculation. As a result, the Original Bond Charge Decision, D.02-10-063, shall be modified pursuant to this Order which incorporates by reference Appendix A.
2. PG&E, SDG&E and SCE shall file new compliance advice letters, no later than five days following the effective date of this decision, that impose a per Kwh charge on non-exempt bundled consumption as defined in Appendix A, and consistent with Ordering Paragraph 4 of Appendix A.
This order is effective today.
Dated December 30, 2002, at San Francisco, California.
HENRY M. DUQUE
GEOFFREY F. BROWN
MICHAEL R. PEEVEY
Commissioners
I dissent.
/s/ LORETTA M. LYNCH
President
I dissent.
/s/ CARL W. WOOD
Commissioner
COM/GFB/DMG/vfw Appendix A
Decision 02-10-063 as modified by Decision 02-12-082.
BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA
Application of Southern California Edison Company (U 338-E) for Authority to Institute a Rate Stabilization Plan with a Rate Increase and End of Rate Freeze Tariffs. |
Application 00-11-038 (Filed November 16, 2000) |
|
Emergency Application of Pacific Gas and Electric Company to Adopt a Rate Stabilization Plan. (U 39 E) |
Application 00-11-056 (Filed November 22, 2000) |
|
Petition of THE UTILITY REFORM NETWORK for Modification of Resolution E-3527. |
Application 00-10-028 (Filed October 17, 2000 Bond Charge Phase |
DECISION ADOPTING METHODOLOGY FOR SETTING CHARGES TO RECOVER BOND-RELATED COSTS INCURRED BY THE DEPARTMENT OF WATER RESOURCES 2
1. Summary 2
2. Background 5
3. Details of DWR's Proposed Bond Sale 8
A. Discussion: Major Changes between Exhibit 1 and Reference Exhibit 1-a 10
4. Issues in Proceeding 12
5. Should the Commission Exclude Specific Bundled Customers or Electricity Consumption from the Bond Charge? 12
6. What Methodology Should the Commission Use to Allocate and Collect the Revenue Requirement for Bond-Related Costs? 19
A. PG&E, CLECA, SDG&E, ORA: Allocate and Collect Bond Costs Based on kWhs 19
B. ORA: Adjust PG&E's Rates in Light of WAPA Contracts 20
C. TURN: Allocate Revenue Requirement Per D.02-02-052 21
D. PG&E: Adjust Bond Charge to Reflect Line Losses 21
E. EPUC, CLECA and Modesto: Adjust Bond Charge on Departing Load Customers to Exclude Revenue Requirements 22
F. Discussion: Allocate and Collect Bond Charges Based on All Non-Excluded kWh Consumption 22
7. Consequences of Other Commission Policies on the Bond Charge: What are the Key Projected Bond Surcharge Scenarios Pending Policy Determinations in R.02-01-011? 25
8. How Should the Commission Implement the Methodology Adopted to Allocate and Collect Bond-Related Costs? 30
A. Positions of Parties: Create Balancing Accounts 31
B. Discussion: Use Advice Letter Process with Balancing Accounts to Implement Policies Adopted 32
9. Comments 39
10. Assignment of Proceeding 39
11. Rehearing and Judicial Review 39
FINDINGS OF FACT 39
CONCLUSIONS OF LAW 44
O R D E R 45
