Assignment of Proceeding

Carl Wood is the Assigned Commissioner and Myra Prestidge is the assigned Administrative Law Judge in this proceeding.

Findings of Fact

1. The market for LEVs is developing.

2. The IOUs have the following fueling stations for LEVs, only a subset of which are public access stations:

· SoCalGas has 20 or 21 NGV fueling stations. Fourteen are open to the public. SDG&E has 3 fueling stations.

· PG&E has 22 NGV fueling stations.

· SCE has no NGV fueling stations since it is an electricity-only utility.

3. The INEEL project, in which PG&E and SoCalGas have participated (and PG&E proposes to participate in the future), is aimed at developing a liquefied natural gas product consistent with prior CPUC LEV decisions and RD&D guidelines.

4. PG&E has already spent between $1.6 and $2.1 million on the INEEL project to date, and SoCalGas has spent approximately $1 million on the project.

5. PG&E conducted two marketing studies related to LNG.

6. Several witnesses associated with government and nonprofit LEV programs provided evidence on the need for utility involvement in LEV programs to meet statutory requirements and other state policy goals.

7. While the bulk of the IOUs' customer education function involves maintaining customer service staffs to field contacts from potential fleet purchasers, all ratepayers benefit from the system safety and reliability information that is conveyed to potential LEV users.

8. Potential purchasers of LEV fleet vehicles include school bus operators, transit districts, government entities, garbage companies, shared ride shuttle operators, utilities and taxicab companies who generally are acting in response to statutory or air quality management district requirements

9. The IOUs' customer service staffs, among other things, tell potential fleet purchasers or fleet owners of the utilities' experience with their own fleets, furnish callers lists of LEV-related vendors and written information on new products, and provide free grant-writing assistance to third parties seeking to obtain grants and other incentives for LEV purchases. This customer service function involves gathering literature about LEVs, maintaining websites, attending trade shows and conferences, participation in industry boards and committees, and fielding customer inquiries.

10. No party introduced evidence that it had polled other obvious sources of LEV information such as automakers to determine if it is correct that IOUs are usually the first point of contact for anyone considering investing in LEVs.

11. It is in the ratepayers' interest to authorize the utilities to continue assuming the responsibility of training users at the CNG stations to ensure a safe and reliable natural gas pipeline system.

12. Although the entire natural gas fueling training exercise appears to be currently limited to educating a small number of public users at a small number of unattended fueling stations, the training exercises will grow due to increased participation in the natural gas LEV program.

13. CALSTART and SoCalGas acknowledged that natural gas fueling is now safe.

14. The impact of LEVs on the utilites' electric grid is expected to increase from current levels, especially due to growth in non-road electric vehicles.

15. Many of the IOU funding requests contain sufficient justification based on the § 740.8 requirements of safer, more reliable or less costly gas or electric service.

16. The CEC urges this Commission to consider non-IOU-ratepayer sources for funding LEV programs, including public-private partnerships.

17. SCGC's members do not currently pay the § 890 Natural Gas Surcharge.

Conclusions of Law

1. Pub. Util. Code § 740.3 et seq. prohibits the Commission from passing funding for LEV programs through to ratepayers unless the programs are in the ratepayers' interest.

2. In 1999, the Legislature amended Pub. Util. Code § 740.8 to provide that "interests of ratepayers, short- or long-term, mean direct benefits that are specific to ratepayers in the form of safer, more reliable, or less costly gas or electrical service.

3. In relevant part, PU Code §451 states that, "Every public utility shall furnish and maintain such adequate, efficient, just, and reasonable service, instrumentalities, equipment, and facilities...as are necessary to promote the safety, health, comfort, and convenience of its patrons, employees, and the public."

4. Ratepayers should not fund IOU LEV programs unless such programs meet the requirements set forth in PU Code §§740.8 and 451

5. The IOUs bear the burden of proving that we should continue to fund their programs. To the extent they cannot prove that their ratepayer-funded LEV programs provide ratepayer benefits, the Commission has the discretion to disallow the funding.

6. We extend the funding for the utilities' LEV programs, but this funding will sunset at the end of 2005.

7. Utilities' LEV programs may not unfairly compete with nonutility enterprises or interfere with the development of a competitive market.

8. D.95-11-035 and D.98-12-098 made clear that ratepayer funding of LEV programs would not continue indefinitely.

9. D.02-12-056 made clear that we would be considering only "discretionary" LEV program activities, such as customer service, training, research and development and other "non-mandatory" LEV programs, in this proceeding. This decision acts only on the IOUs' discretionary funding requests.

10. D.02-12-056 provided that we would review "mandatory" LEV program activities in each utility's GRC or cost-of-service proceeding. "Mandatory" LEV activities involve the acquisition of alternative fuel use fleet vehicles pursuant to federal law, operation and maintenance costs associated with use of alternative fuel use fleet vehicles and associated infrastructure, infrastructure (fueling facilities and related equipment) needed to support alternative fuel use fleet vehicles, employee training and instruction necessary for the use of alternative fuel use fleet vehicles, and accounting for the costs of these mandatory activities. These activities are outside the scope of this decision.

11. The use of ratepayer funds to educate customers on how to fuel and charge their vehicles safely meets the requirement that LEV funding enhance customer safety.

12. While Pub. Util. Code § 890 Public Purpose Program surcharge revenue may be an appropriate funding source for IOU RD&D programs, we should deny SCGC's and ORA's request to shift funding to this source given that we are only extending the IOU programs till the end of 2005.

13. We should deny the IOUs' request to incorporate discretionary LEV funding into their GRCs or cost-of-service proceedings ordering workshops to help shape how future consideration of LEV programs will be handled is consistent with PU Code § 740.3. (a)

14. The utilities shall maintain current accounting practices for LEV programs.

ORDER

IT IS ORDERED that:

1. We grant the applications by Southern California Gas Company (SoCalGas), San Diego Gas & Electric Company (SDG&E), Southern California Edison Company (SCE), and Pacific Gas and Electric Company (PG&E) (collectively, utilities or IOUs) for funding for the discretionary aspects of their Low Emission Vehicle (LEV) programs as set forth below.

2. For each approved IOU program, we extend funding to the end of 2005.

3. Commencing one year from the effective date of this decision, and continuing every year thereafter, the IOUs shall file and serve the IOU Low Emission Vehicle (LEV) Programs Report, attached hereto as Appendix A, covering the previous yearly period of program activity. The Annual Report requires that the IOUs identify how each program activity relates to safety, reliability or less costly gas or electric service, report on how many people were served, submit program materials, and otherwise establish that they are meeting the requirements of D.95-11-035 and this decision. To the extent the IOUs have included requests for mandatory funding in their applications - even interim funding pending the outcome of their general rate cases (GRCs) or cost-of-service proceedings - we do not act on them here. They must seek interim funding in those other proceedings.

4. We deny the request of the Southern California Generation Coalition (SCGC) and the Office of Ratepayer Advocates (ORA) to shift funding for LEV research and development (RD&D) to Pub. Util. Code § 890 public purpose surcharge funding.

5. All interested parties are directed to meet and confer in a workshop forum hosted by the Commission's Energy Division for the purposes of proposing standards to be used during any future utility discretionary LEV funding proceedings. The details of such a workshop are discussed herein.








6. This proceeding is closed

This order is effective today.

Dated October 30, 2003, at San Francisco, California.

MICHAEL R. PEEVEY

President

CARL W. WOOD

SUSAN P. KENNEDY

Commissioners

I dissent.

LORETTA M. LYNCH

Commissioner

I dissent.

GEOFFREY F. BROWN

Commissioner

STATE OF CALIFORNIA GRAY DAVIS, Governor



PUBLIC UTILITIES COMMISSION

505 VAN NESS AVENUE

SAN FRANCISCO, CA 94102-3298

IOU Low Emission Vehicle (LEV) Programs

Annual Reports Narrative Template

How and To Whom to Submit Annual Reports

o To the CPUC Energy Division: You must send both hard copies and electronic submittal

· Hard Copies to CPUC:

_ 3 printed copies (at least one unbound) of the Annual Report Narrative and the Annual Report Workbook (You need only print areas with cells containing data)

_ Attachments: 2 copies of all materials and sample forms used in the program

_ Send hard copies and attachments to:
Energy Division Director
California Public Utilities Commission
505 Van Ness Avenue, 4^th Floor
San Francisco, CA 94102

o To the Service List (e-mail only)

You should download and use the current service list each time you serve.
The current list is available at http://www.cpuc.ca.gov/published/service_lists/A0203047_39807.htm

· Notification of Availability of your Annual Report.

_ Your e-mail notification subject heading should follow the naming convention described below:

o Low Emission Vehicle Annual Report [program implementer name] [year covered by report].


_ Your e-mail notification body should contain the following

o Description of what is being made available

o Instructions on how to obtain the annual report electronically or by mail.

o URL or Hyperlink to the section of your webpage where the report is posted.

IOU Low Emission Vehicle (LEV) Programs

Annual Reports Narrative Template

Section I. Program Overview

Provide a brief description of LEV program activities for the year (one or two paragraphs)

Section II. Program Summary Data

Provide a list or table that summarizes program budget, expenditures, goals and achievements by end of reporting period. The list or table should include the following, as applicable:

1. Program Expenditures

o Total program budget and total expenditures by end of reporting period (actual and committed displayed separately and totaled)

2. Safety Related Expenditures

For each safety related activity, provide the following data:

o A description of each activity (subject matter, delivery method, material provided, how it relates to safety, etc.)

o Number and description of persons (e.g., fleet customer, residential customer, noncore customer, etc.) to whom safety information delivered

o Number of staff persons involved in each activity and time spent on each

o To the Energy Division care of Energy Division Director submit two copies of all material, including but not limited to safety instructions, flyers, brochures, posters, program announcements, newsletters, website posting, websites, etc. (NOTE: Websites and website postings need not be printed and sent to ED, but please provide list of URLs and brief description of each website and web posting)

o Quantity produced of each piece of material

o Method(s) of distribution and approximate quantities distributed by each method

o Expenditures on each activity and totaled

3. Reliability Related Expenditures

For each reliability related activity, provide the following data:

o A description of each activity (subject matter, description of how activity relates to reliability of electric or gas system, materials developed or obtained, etc.)

o Number of staff persons involved in each activity and time spent on each

o To the Energy Division care of Energy Division Director submit two copies of all materials developed or obtained, including but not limited to studies or analyses of impact of new LEV technology on load, grid or reliability

o Expenditures on each activity and totaled

4. Expenditures for Activity Leading to Less Costly Gas or Electric Service

For each activity that will lead to less costly gas or electric service, provide the following data:

o A description of each activity (subject matter, delivery method, material provided, how it will lead to less costly gas or electric service, etc.)

o Number of staff persons involved in each activity and time spent on each

o To the Energy Division care of Energy Division Director submit two copies of all materials developed or obtained, including but not limited to studies or analyses of how program activity will reduce rates

o Expenditures on each activity and totaled

5. Other Expenditures

o A description of accomplishments not captured within the foregoing section and how they relate to safer, more reliable, or less costly gas or electrical service.

o A description of each activity (subject matter, delivery method, material provided, how it will accomplish Commission-articulated goals for ratepayer-funded IOU LEV programs, etc.)

o Number of staff persons involved in each activity and time spent on each

o To the Energy Division care of Energy Division Director submit two copies of all materials developed or obtained, including but not limited to studies or analyses of how program activity will accomplish Commission-articulated goals for ratepayer-funded LEV programs, etc.

o Expenditures on each activity and totaled

Section III. Additional Items


Please use this section to report issues, information and data not included in the main body of the report, but deemed relevant and important by the program implementer. You may organize this section as you see fit.