Assignment of Proceeding

Carl W. Wood and Geoffrey F. Brown are the Assigned Commissioners and Thomas R. Pulsifer is the assigned ALJ in this proceeding.

Findings of Fact

1. DWR began buying electricity on behalf of the retail end use customers in the service territories of the California utilities: for PG&E and SCE on January 17, 2001, and SDG&E on February 7, 2001.

2. AB 1X, together with AB 117, provides for DWR to collect revenues by applying charges to the electricity that it purchased on behalf of all retail end customers that took bundled utility service on or after February 1, 2001 in the service territories of the three major utilities.

3. Consistent with AB 1X and AB 117, retail customers that took bundled service on or after February 1, 2001 are responsible for paying a fair share of the DWR revenue requirements.

4. To the extent that some of the CVP Group preference power customers have received all of their power needs from WAPA, and have never taken bundled service from PG&E, such entities do not meet the definition of departing load under PG&E's tariffs, and consequently have no load that could "depart."

5. No cost shifting between customer groups would result from excluding preference power customers that never took bundled service from PG&E with respect to CRS obligations.

6. Certain members of the CVP preference power customers have received only a portion of their power through WAPA, with the remaining power needs met through bundled PG&E utility service during periods on or after February 1, 2001, on a split-wheeling basis pursuant to contract.

7. To the extent preference power customers that took power under split wheeling arrangements on or after February 1, 2001, subsequently terminate bundled service under those split wheeling arrangements after December 31, 2004, such termination constitutes "departing" load under the provisions of PG&E's tariff.

8. Split wheeling is a component of retail load, therefore, and not part of wholesale obligations as addressed in the data response from Navigant, received into the record as a late-filed item. The Navigant data response does not indicate any reduction in retail load requirements was made to reflect any "split wheeling" component.

9. The data response from Navigant, received into the record as a late-filed item, indicates that DWR did not procure power to serve the wholesale power needs of WAPA Preference Power Customers, but that it did in fact bear responsibility to meet the power supply needs of PG&E's retail end users.

10. In D.96-11-041, the Commission has previously determined that customers receiving increased allocations of federal preference power under Contract 2948 would not be classified as departing load under PG&E's tariff to the extent such increased power was allocated in a manner contemplated under that existing contract.

11. In D.97-06-070, the Commission further clarified that if such existing contract arrangements were altered in a way that reduced service from PG&E and substituted service from another, the exclusion from departing load may not apply.

12. The record does not support a finding that DWR reduced its load forecasts to reflect the termination of the split wheeling requirements for bundled load in excess of CRD levels after December 31, 2004.

Conclusions of Law

1. Consistent with the provisions of AB 1X and AB 117, departing load customers that took bundled service from PG&E on or after February 1, 2001 are responsible for paying their "fair share" of DWR costs.

2. The provisions for imposing CRS-related costs on departing load customers as adopted in D. 03-04-030 and D. 03-07-030 form a basis for applying corresponding CRS-related costs to the departing load component of preference power customers' split-wheeling load.

3. Preference Power customers bear cost responsibility for the CRS, including the DWR bond and power charges, to the extent they meet the definition of departing load under PG&E's tariff and pursuant to the previous Commission decisions adopted in this rulemaking.

4. Preference power customers that have taken no bundled utility service from PG&E on or after February 1, 2001, but have met their full contract needs through WAPA deliveries, bear no responsibility for paying a CRS.

5. In order to prevent cost shifting and to impose cost responsibility in accordance with AB 1X and AB 117, split-wheeling preference power customers must bear cost responsibility for the portion of their load that is met by bundled utility service and that subsequently is terminated after December 31, 2004.

6. Since the CRS is imposed pursuant to IOU tariffs and is collected based only upon bundled utility power deliveries pursuant to IOU tariffs, there is no conflict with FERC rules regarding the pricing of WAPA power.

7. No evidentiary hearings are necessary to resolve this motion, but a meet-and-confer session among interested parties, including UC/CSU, is warranted to resolve outstanding technical implementation issues relating to the quantification of departing load in excess of CRD levels under the provisions of Contract 2948A.

ORDER

IT IS ORDERED that:

1. The motion of CVP Group regarding cost responsibility of Preference Power Customers is granted in part and denied in part, as ordered below.

2. No CRS shall apply to those preference power customers that have met their full power requirements through deliveries from WAPA, and have not taken bundled service from PG&E since February 1, 2001 to meet a portion of their load.

3. Split wheeling preference power customers shall bear no responsibility for any component of the CRS for electric loads that fall within the customer's contract rate of delivery (CRD) in the manner contemplated under the existing provisions of Contract 2948A.

4. A CRS shall be imposed on split wheeling preference power customers to the extent they received a portion of their power through PG&E bundled service to the extent such power exceeds the customer's CRD in the manner contemplated under the existing provisions of Contract 2948A.

5. PG&E, CVP customers, and UC/CSU shall meet and confer within 20 business days of the effective date of this decision to identify and discuss resolution of any outstanding questions concerning the manner in which relevant preference power volumes in excess of the CRD and subject to the CRS would be identified and billed by PG&E.

6. To the extent the parties cannot reach timely agreement as to the manner in which the quantification of departing load volumes will be identified and billed in accordance with the principles outlined in this order, either party may file a subsequent motion for clarification of the methodology identifying and billing CRS to the split wheeling load.

7. PG&E is directed to promptly file an advice letter with the appropriate amendments to its tariff to reflect the identification and billing of CRS for the applicable split wheeling volumes upon resolution of this matter in accordance with process outlined in this decision.

8. The motion of CVP Group, dated August 28, 2003, for receipt into the record of late-filed materials is hereby granted.

9. The motion to intervene of the NCPA is hereby granted.

This order is effective today.

Dated September 18, 2003, at San Francisco, California.

MICHAEL R. PEEVEY

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