FINAL ORDER
IT IS ORDERED that:
1. The determinations made in this order apply to all Commission-regulated gas or electric utilities.
2. The Tier 3 large household program proposed by The Utility Reform Network (TURN) is adopted, as described in this order and incorporating the procedures described in Finding of Fact 22, for Pacific Gas and Electric Company (PG&E), Southern California Edison Company (SCE), and San Diego Gas & Electric Company (SDG&E).
3. Energy Division shall 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.
4. PG&E, SCE, and SDG&E shall fully implement the adopted large household program for all customers within 20 weeks of the effective date of this order.
5. PG&E, SCE, and SDG&E shall each file and serve a compliance advice letter within 60 days of the effective date of this order to implement the large household program, with tariff modifications to become effective no later than 16 weeks after the effective date of this order. The advice letters shall become effective after appropriate review by Energy Division.
6. PG&E, SCE, and SDG&E shall each record its program costs and related revenue shortfalls resulting from the large household program in its Baseline Balancing Account (BBA).
7. In recognition of the provisions in Decision (D.) 03-07-029 regarding its BBA, SCE is authorized to use its existing BBA or create a new BBA for the purposes of this order.
8. Each electric or gas utility shall 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.
9. Each electric or gas utility shall maintain a reasonable method for determining the percentage of customers who are seasonal residents in each climate zone, and may gather such information through its Residential Appliance Saturation Surveys or similar customer surveys.
10. Each electric or gas utility, except Mountain Utilities, shall file and serve a compliance advice letter to implement the adopted exclusion of seasonal residences from baseline calculations. Each utility shall file its advice letter within 60 days of the effective date of this order except that SDG&E shall file its advice letter as soon as practical after it receives pending Residential Appliance Saturation Survey results. Each utility shall explain and document in its advice letter whether the adopted 3% materiality threshold is met in each climate zone during each season. If the adopted materiality threshold is met, the advice letter shall include any tariff modifications needed to adjust baseline quantities appropriately, to be effective at the beginning of the next baseline period. Each utility may use PG&E's proxy methodology and shall explain the methodology it uses to exclude the usage of seasonal residences from baseline calculations, with supporting documentation to allow review of the reasonableness of the methodology. The advice letters shall become effective after appropriate review by Energy Division.
11. If the advice letter of a gas utility filed as provided in Ordering Paragraph 10 adjusts baseline quantities, its concurrent advice letter filed as provided in Ordering Paragraph 27 shall reflect the expected revenue losses and shall include tariff modifications with gas rate adjustments to maintain revenue neutrality.
12. If the advice letter of an electric utility filed as provided in Ordering Paragraph 10 adjusts baseline quantities, the accompanying tariff modifications shall adjust its non-generation or non-commodity rates if needed to maintain revenue neutrality for those rate components and shall adjust its generation or commodity rates so that total rates are unchanged, to be effective at the beginning of the next baseline period. Each such electric utility shall establish a BBA if it does not have one, and shall record in its BBA any generation or commodity revenue shortfalls resulting from the exclusion of seasonal residences from baseline calculations.
13. Each electric or gas utility shall submit in its general rate proceeding or other appropriate proceeding, including pending proceedings if feasible without delay of the proceedings, an assessment of whether it should deny baseline quantities to seasonal residences. Its assessment shall include the proportion of seasonal residences in each climate zone, the effect a baseline exclusion has or would have on permanent residents' bills, and actual or projected costs of administering an equitable program of withholding baseline quantities from seasonal residences. The utility shall describe an appropriate and equitable method for identifying seasonal residences for purposes of withholding baseline quantities, and shall assess an alternative approach in which separate, lower baseline allowances would be provided to seasonal residences. Mountain Utility shall include provisions to implement the adopted exclusion of seasonal residences from baseline calculations.
14. Pending further review in its general rate case, SCE shall not implement the policy adopted in D.96-04-050 that it withhold baseline quantities from seasonal residences in climate Zones 15 and 16.
15. Each electric utility, in addition to PG&E, that currently serves any common area accounts through residential tariffs shall allow such accounts 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.
16. Each electric utility other than PG&E that currently serves any common area accounts through residential tariffs shall file and serve a compliance advice letter within 30 days of the effective date of this order, with tariff modifications to become effective within 45 days of the effective date of this order, to implement the adopted treatment of residential common area accounts. Each such utility shall establish a Common Area Balancing Account (CABA) to record any revenue undercollection or overcollection resulting from residential common area accounts that switch to commercial tariffs. The advice letters shall become effective after appropriate review by Energy Division.
17. PG&E's motion to strike the testimony of Watergate Community Association regarding its request for common area-related refunds is denied.
18. Each electric company that takes power from Department of Water Resources (DWR) or is otherwise bound by the provisions of Water Code § 80110 and whose total rates for residential usage up to 130% of baseline are higher than when AB 1X was enacted on February 1, 2001 shall adjust its rates if needed to comply with this statute.
19. Each electric utility that takes power from DWR or is otherwise bound by Water Code § 80110 shall file and serve a compliance advice letter filing within 30 days of the effective date of this order demonstrating that its total residential rates for usage up to 130% of baseline quantities are no higher than they were when AB 1X became effective. If total residential rates are not in compliance with Water Code § 80110, the advice letter filing shall contain tariff modifications, effective within 45 days of the effective date of this order, to reduce the utility's generation or commodity rates for usage up to 130% of baseline so that total rates for such usage are no higher than they were when AB 1X became effective.
20. Cost and revenue shortfalls due to baseline and rate design changes adopted in this proceeding are recoverable to the extent provided by this order.
21. Each electric utility that has a BBA, except SCE, shall adjust its non-generation or non-commodity rates to reflect the on-going effect of changes currently being accrued in its BBA and (for PG&E only) CABA and to amortize existing undercollections of non-generation or non-commodity revenue requirements so that the revenue requirements adopted for non-generation or non-commodity rate components are maintained, and shall adjust its generation or commodity rates so that total rates are unchanged.
22. Each electric utility that has a BBA or CABA, except SCE, shall file and serve a compliance advice letter within 30 days of the effective date of this order, with tariff modifications to become effective within 45 days of the effective date of this order, to adjust its non-generation or non-commodity rates to reflect the on-going effect of changes currently being accrued in its BBA and (for PG&E only) CABA and to amortize over 12 months its existing undercollections of non-generation or non-commodity revenue requirements. Generation or commodity rates shall be adjusted so that total rates are unchanged. The advice letters shall become effective after appropriate review by Energy Division.
23. Each electric utility that has baseline-related balancing accounts or creates such accounts pursuant to this order shall maintain the generation or commodity portion of such accounts until a comprehensive assessment of costs, cost allocation, and rate design issues is undertaken in its general rate case or other appropriate proceeding.
24. Additional electric rate adjustments to maintain revenue neutrality and to terminate the baseline-related balancing accounts shall be made in utilities' general rate cases or other appropriate proceedings.
25. Each gas utility is authorized to recover shortfalls due to gas baseline-related changes from the residential class, with rate changes based on previously adopted gas rate design principles to the extent feasible.
26. Each gas utility shall file and serve a compliance advice letter within 60 days of the effective date of this order, with tariff modifications to become effective at the beginning of the summer 2004 baseline period, to adjust residential gas rates to effect the authorized recovery of on-going baseline-related shortfalls. PG&E, SDG&E, and Southern California Gas Company (SoCalGas) shall each adjust its residential gas rates in a manner consistent with the rate design methodologies adopted in its most recently completed Biennial Cost Allocation Proceeding (BCAP). Southwest Gas Corporation (Southwest) shall adjust residential gas rates on an equal cents-per-therm basis. Each remaining gas utility shall adjust residential gas rates consistent with the rate design methodologies adopted in its most recently completed gas rate design proceeding or, if that is not feasible, on an equal cents-per-therm basis. The advice letters shall become effective after appropriate review by Energy Division.
27. Each gas utility shall file and serve a compliance advice letter with tariff changes to become effective concurrent with the next unrelated changes in residential gas rates after the final BBA balance is known to adjust residential gas rates to amortize over 12 months its gas BBA balance and to terminate its gas BBA. PG&E, SDG&E, and SoCalGas shall each adjust its residential gas rates in a manner consistent with the rate design methodologies adopted in its most recently completed BCAP. Southwest shall adjust residential gas rates on an equal cents-per-therm basis. Each remaining gas utility shall adjust residential gas rates consistent with the rate design methodologies adopted in its most recently completed gas rate design proceeding or, if that is not feasible, on an equal cents-per-therm basis. The advice letters shall become effective after appropriate review by Energy Division.
28. The motion to intervene filed by the California Manufacturers & Technology Association (CMTA) is granted and its comments on the proposed decision are accepted for filing.
29. The following person is granted Interested Party status on behalf of CMTA and is added to the Appearances portion of the service list:
Keith R. McCrea
Sutherland Asbill & Brennan, LLP
1275 Pennsylvania Avenue, N.W.
Washington, D.C. 20004
Telephone: (202) 383-0100
Email: keith.mccrea@sablaw.com
Appearing for the California Manufacturers &
Technology Association
30. This proceeding is closed.
This order is effective today.
Dated February 26, 2004, at San Francisco, California.
MICHAEL R. PEEVEY
President
CARL W. WOOD
LORETTA M. LYNCH
GEOFFREY F. BROWN
SUSAN P. KENNEDY
Commissioners
ATTACHMENT A
LIST OF APPEARANCES
************ APPEARANCES ************ |
Dan L. Carroll |
William H. Booth |
Stacy Van Goor |
James Van Nostrand |
********** STATE EMPLOYEE *********** |
Angela K. Minkin |
********* INFORMATION ONLY ********** |
Lulu Weinzimer |
Jeanne M. Bennett |
Sara Steck Myers |
Mary Fricker |
(END OF APPENDIX A)
