Conclusions of Law
1. AB 2443 prohibits the Commission, in developing the baseline program, from considering end uses other than those specified in § 739(b).
2. Section 739 does not restrict our ability in establishing and applying baseline quantities to take into account factors, except for end uses, in addition to those specified in § 739(a) and (d)(1). Thus, the Commission may consider factors such as whether a residence is seasonal or permanent, household size, and income in establishing the baseline program.
3. The Commission may not make the standard limited allowance available to, or create additional standard limited allowances for, customers not specified in § 739(b).
4. Statutory requirements for the baseline program do not apply to the non-baseline tiers of the residential rate design.
5. Because the principle in § 739(c)(2) that electricity and gas services should be affordable encompasses all residential customers, the residential rate design may consider customers' financial situation in other ways in addition to the CARE program.
6. Because the principles of affordability and conservation established by Section § 739(c)(2) are complementary, we may consider proposals that advance the affordability of basic energy needs even if they do not improve conservation.
7. Based on the harmonization of § 739(d)(1) and Water Code § 80110, we may consider proposals that increase baseline quantities for a subgroup of vulnerable residential customers even if baseline decreases for other customers needed to comply with § 739(d)(1) are not permissible due to a conflict with Water Code § 80110.
8. TURN's Tier 3 lower-middle income large household program should be adopted because it is consistent with the rate design principles in § 739(c), will meet an identified need for rate relief in an effective manner consistent with the evaluation criteria we have established, and is preferable to baseline adjustments for large households, as proposed by LIF/Greenlining.
9. The procedures regarding implementation and administration of the adopted large household program described in Finding of Fact 22 should be adopted.
10. Energy Division should hold a workshop within 45 days of the effective date of this order, in order to finalize implementation and administrative procedures for the adopted large household program.
11. PG&E, SCE, and SDG&E should implement the adopted large household program for all customers within 20 weeks of the effective date of this order, with the first qualified customers who respond to the bill inserts or otherwise request the program receiving reduced rates at least 4 weeks earlier than that.
12. PG&E, SCE, and SDG&E should be authorized to recover through their BBAs reasonably booked costs and revenue losses of the adopted large household program.
13. Recognizing that the PROACT settlement adopted in D.03-07-029 provided for the elimination of SCE's BBA, SCE should be authorized to use its existing BBA or create a new BBA for the purposes of this order.
14. Each electric or gas utility should exclude seasonal residences from baseline calculations in climate zones where their inclusion would cause a reduction in baseline quantities of 3% or more, with this materiality threshold applied separately for electricity and for gas usage, for the summer and winter seasons, and for each climate zone.
15. If the materiality threshold is met, changes to baseline quantities to reflect the exclusion of seasonal residences should be effective at the beginning of the next baseline period after that determination is made.
16. Each utility should be allowed to use PG&E's proxy methodology to exclude the effects of seasonal homes from baseline calculations.
17. Each utility should maintain a reasonable method for determining the percentage of customers who are seasonal residents in each climate zone for the purpose of excluding their usage from baseline calculations, and should be allowed to gather such information through its RASS or similar customer surveys.
18. The utilities should be authorized to recover revenue losses that result if baseline quantities are adjusted to exclude the usage of seasonal residences, with gas rates and non-generation electric rates adjusted, if needed, concurrently with the baseline changes in order to maintain revenue neutrality for these rates, with offsetting adjustments to non-generation rates so that total electric rates are unchanged, and with generation revenue losses accrued in the utilities' BBAs.
19. Each utility should submit in its general rate proceeding or other appropriate proceeding, including pending proceedings if schedules permit, an assessment of whether it should deny baseline quantities to seasonal residences, as described in Section III.E.2 of this order.
20. Pending further review in its general rate case, SCE should not implement the policy adopted in D.96-04-050 that it withhold baseline quantities from seasonal residences in climate Zones 15 and 16.
21. Section 739 does not constrain the Commission from requiring that utilities allow common area electric accounts to transfer voluntarily from a residential schedule to a commercial schedule.
22. The voluntary transfer of electric common area accounts from residential to commercial schedules would not violate AB 1X.
23. Each electric utility that currently serves any common area accounts through residential schedules should allow its residential common area customers the option to switch to commercial schedules, under terms comparable to the provisions found reasonable and adopted for PG&E in D.03-01-037 and within 45 days of the effective date of this order.
24. Each electric utility that allows its residential common area customers the option to switch to commercial schedules should be authorized to establish a CABA to recover its reasonably booked revenue losses resulting from residential common area accounts that switch to commercial tariffs.
25. An adjustment to rates that does not involve general ratemaking may have a retroactive effect without violating the prohibition on retroactive ratemaking in § 728.
26. Because the surcharges adopted in D.01-03-082 were not the result of general ratemaking, a refund such as WCA requests would not be prohibited by § 728.
27. Because the relief which WCA requests is not prohibited under § 728, PG&E's motion to strike WCA's related testimony should be denied.
28. Based on an analysis of the legislative history of AB 1X, the rate protection in Water Code § 80110 should be interpreted to apply to total retail rates for residential electricity usage up to 130% of baseline amounts in effect when AB 1X became effective, for utilities that take power from DWR or are otherwise bound by its provisions.
29. SDG&E's proposal to increase its distribution and CTC rate components for all residential usage without offsetting decreases in other rate components for usage up to 130% of baseline is counter to Water Code § 80110 added by AB 1X.
30. Because SDG&E's total rates for residential usage up to 130% of baseline currently exceed the total rates for such usage when AB 1X became effective, SDG&E's total rates for residential usage up to 130% of baseline do not comply with AB 1X.
31. Each electric utility that takes power from DWR or is otherwise bound by Water Code § 80110 and whose total rates for residential usage up to 130% of baseline are higher than when AB 1X was enacted should adjust its generation or commodity rates for residential usage up to 130% of baseline amounts, effective within 45 days of the effective date of this order, to comply with AB 1X as we have interpreted it previously and affirm in this decision.
32. Each electric utility, except SCE, should be required to adjust its non-generation rates to reflect the on-going effect of changes currently being accrued in its BBA or (for PG&E) CABA and to amortize existing undercollections of non-generation revenue requirements, with offsetting reductions in generation rates, so that revenue requirements adopted previously for non-generation rate components are maintained and total rates are unchanged.
33. Each electric utility should maintain the generation portion of its baseline-related balancing accounts until a comprehensive assessment of costs, cost allocation, and rate design issues is undertaken in its general rate case or other appropriate proceeding.
34. Shortfalls due to gas baseline-related changes should be recovered from the residential class, with rate changes based on previously adopted gas rate design principles to the extent feasible.
35. Because this decision construes, applies, implements, and interprets the provisions of AB 1X (Chapter 4 of the Statutes of 2001-2002 First Extraordinary Session), §1731(c) (applications for rehearing are due within 10 days after the date of issuance of the order or decision) and § 1768 (procedures applicable to judicial review) are applicable.
36. CMTA's motion to intervene should be granted and its comments on the proposed decision should be filed.
37. This order should be effective today, so that the modifications adopted herein may be implemented expeditiously.
