II. Background
D.03-06-035 granted limited rehearing on the issue of a suitable proxy for the short-term commodity cost of electricity.1 This cost would be borne by those DA customers who require bundled service as a temporary "safe harbor." D.03-06-035 directed that this matter be addressed through a Rule 22 Working Group Meeting, (p.13) which was held on August 29, 2003. Participants in the workshop included Pacific Gas and Electric Company (PG&E), Southern California Edison Company (SCE), San Diego Gas & Electric Company (SDG&E), The Alliance of Retail Energy Markets/Western Power Trading Forum (AReM/WPTF), The California Manufacturers & Technology Association (CMTA) and Energy Management Services (EMS).
At the Working Group Meeting, five separate proposals were initially presented regarding the appropriate short-term proxy price, four of which were similar.2 Through discussions, those parties offering similar proposals were able to agree on a single proposal based on the California Independent System Operator (ISO) real-time INC price. The INC price represents the market clearing price set by the marginal resource generating the energy purchased by the ISO to cover imbalance energy, i.e., the difference between scheduled energy and energy required to support real-time load. Metered load in excess of scheduled load is charged the INC price.
On September 15, 2003, parties submitted a "Status Report" summarizing these discussions and the proposals submitted. Participants did not reach full agreement on a price proxy proposal as a result of the workshop, but did agree on the advisability of participants filing an additional brief in support of their respective proposals for the Commission's consideration. By Administrative Law Judge ruling dated September 25, 2003, parties were granted leave to file briefs regarding their positions on price proxies. Briefs were filed on October 10, 2003.
1 In addition to the electric commodity costs, safe harbor, Direct Access load is expected to also pay additional costs such as the California Independent System Operator's grid management costs, ancillary service costs, UFE, transmission and distribution losses, and franchise fees and uncollectibles. 2 The four similar proposals were offered by SDG&E, SCE, AReM/WPTF and CMTA.
