ALJ/TRP/avs Mailed 9/19/2003

Decision 03-09-052 September 18, 2003

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Order Instituting Rulemaking Regarding the Implementation of the Suspension of Direct Access Pursuant to Assembly Bill 1X and Decision 01-09-060.

Rulemaking 02-01-011 (Filed January 9, 2002)

OPINION RESOLVING MOTION OF
CENTRAL VALLEY PROJECT GROUP

Introduction

This decision grants, in part, and denies, in part, the motion filed on June 4, 2003 by the Central Valley Project Preference Power Post-2004 Implementation Group (CVP Group). The CVP Group consists of certain "preference power customers"¹ under individual contracts with the Western Area Power Administration (WAPA).² In its motion, the CVP Group seeks an order from this Commission affirming that no "Cost Responsibility Surcharge" (CRS) shall apply to preference power customers for WAPA power purchased after 2004. We grant the motion to the extent it seeks confirmation that those preference power customers meeting their full power requirements through WAPA shall bear no CRS obligation. We deny the motion to the extent it seeks to permit customers to escape CRS responsibility for that portion of their power needs that has been provided through bundled utility service.

The term "CRS" refers to the surcharge mechanism previously adopted and applied to designated direct access and departing load customers under a series of Commission decisions issued in this proceeding. Under the CRS mechanism, designated customers bear a portion of the costs of the California Department of Water Resources (DWR) incurred pursuant to Assembly Bill (AB) 1X, and certain utility costs, as necessary to avoid shifting costs to bundled utility customers. The provisions adopted by the Commission require a CRS to conform with statutory requirements in AB 117. Under the provisions of this legislation, subsection (d) was added to Pub. Util. Code § 366, requiring customers that purchased power from an electric utility on or after February 1, 2001 to bear a "fair share" of DWR's electricity purchase costs, as well as purchase contract obligations incurred.

The CVP motion was filed in response to indications that Pacific Gas and Electric Company (PG&E) intends to apply the CRS to all electricity delivered to WAPA's preference power customers that exceed the customers' respective hydropower allocations under their base resource contracts.

Responses to the motion were filed on June 19, 2003. Responses in support of the motion were filed by the Northern California Power Agency (NCPA) and the University of California/California State University (UC/CSU). Responses in opposition to the motion were filed by PG&E and Southern California Edison Company (Edison), the latter utility having been granted leave to file late comments on June 26, 2003. The CVP Group was also granted leave to file a third-round reply on July 2, 2003 in response to the replies of other parties. This decision is issued based upon review of the motion and responses thereto, including the third-round reply of CVP Group. No evidentiary hearings are necessary to resolve this matter.