II. BACKGROUND

AC Farms Sherwood, et al. are in the business of growing citrus. They receive electrical service from Southern California Edison ("Edison") under Schedule PA-1 to power machines used to circulate air in their orchards on those days during the winter when necessary to prevent damage from frost. The machines operate at 75 to 100 horsepower, or approximately 56 to 75 kilowatts ("kW").

Schedule PA-1 applies "where [Edison] determines that 70% or more of the customer's electrical usage is for general agricultural purposes or for general water or sewerage pumping and none of any remaining electrical usage is for purposes for which a domestic schedule is applicable." The charge is $17.65 per month plus $2.05 per horsepower. Alternatively, Schedule GS-1 covers "single- and three-phase service" -- with the exception of any customer "whose monthly maximum demand, in the opinion of [Edison], is expected to exceed 20 kW or has exceeded 20 kW in any three months during the preceding 12 months" -- at a charge of $.048 per day plus $0.11760 per kilowatt-hour. In addition, Schedule GS-2 contains the same language with respect to maximum demand exceeding 500 kW.

On April 4, 2002, AC Farms Sherwood, et al. filed a complaint seeking to have Edison provide them service under Schedule GS-1 for "the one or two months period each year" when their machines are operated. Complaint at 1. AC Farms Sherwood, et al. acknowledge how a customer may be disqualified from service under this schedule:

[O]ne disqualifier looks prospectively ("expected to exceed"), and the other looks retrospectively ("has exceeded"). By its literal language, the retrospective disqualifier is limited by both time and frequency ("has exceeded 20 kw in any three months during the preceding 12 months"). By contrast, the literal language of the prospective disqualifier ("is expected to exceed") has no such limitation.

Id. at 2 (emphasis in original). Nonetheless, AC Farms Sherwood, et al., assert that this interpretation is untenable since "it is hopelessly vague and ambiguous to say that an event is `expected' without any indication of the time period during which it is expected." Id. at 3. In the opinion of AC Farms Sherwood, et al.,

[J]ust as the retrospective disqualifier only disqualifies an account that "has exceeded 20 kw in any three months during any three of the preceding 12 months" (in the past), the prospective disqualifier can only disqualify accounts that are "expected to exceed 20 kw" in any three months during the succeeding 12 months (in the future).

Id. at 2 (emphasis in original). AC Farms Sherwood, et al. further allege, "[I]n applying the GS-2 tariff in practice, [Edison] interprets `expected to exceed 500 kW' to mean `expected to exceed 500 kW in any three months during the succeeding 12 months.'" Id. at 7 (emphasis in original). Similarly, AC Farms Sherwood, et al. allege that Edison violates Section 453 of the Public Utilities Code, by "systematically" applying "the disqualifying language of Schedule GS-1 differently for PA-1 customers, as compared to existing GS-1 customers." Id. at 9. On June 10, 2002, Edison filed an answer to the complaint, asserting various defenses and recommending that it be dismissed.

On November 7, 2002, based on the pleadings, the Commission issued Decision 02-11-003, dismissing the complaint for failure to state a claim for relief under Section 1702 of the Public Utilities Code. It concluded that Edison properly provides service to AC Farms Sherwood, et al. under Schedule PA-1 and that they are not eligible to receive service under Schedule GS-1. Thus, AC Farms Sherwood, et al. have failed to allege any violation of law as required by Section 1702. The Commission went on to suggest that, if they seek to change the criteria for eligibility of service under Schedule GS-1, their proper recourse is to request modification under Section 1708.

On December 10, 2002, AC Farms Sherwood, et al. filed an application for rehearing of Decision 02-11-003. According to their application, the Commission erred (a) by concluding that they do not qualify for service under Schedule GS-1, (b) by violating Section 1705 of the Public Utilities Code in failing to explain how it reached various conclusions in Decision 02-11-003, and (c) in allowing Edison to file a reply to comments on the Proposed Decision after the time specified by Rule 77.5. On December 23, 2002, Edison filed a response to the application for rehearing, urging that it be denied.