III. Positions of Parties Concerning New Load CRS Allocation Exception

All of the IOUs, as well as CMUA, Industry, and SSJID take issue with the method for apportioning a CRS exception between "existing" and "new" publicly-owned utilities, as adopted in D.03-07-028.⁵ Each of these groups of parties disagree, however, as to how any apportionment adopted in D.03-07-028 should be revised. Each of the IOUs argue that neither they nor DWR reduced their load forecasts in anticipation that "new load" would be served by publicly-owned utilities (either existing or new). Consequently, the IOUs argue that no "new load" CRS exception should apply at all. SSJID and Industry argue that there should be a "new load" exception, but disagree that a February 1, 2001, cut-off date should be used for allocating the exception. CMUA argues that all new load should simply be excluded from paying the CRS, rather than being subject to any allocation.

Irvine believes a CRS exception may only be assessed against a municipal utility's customers on the basis of whether such customers ever purchased DWR power from an IOU. Irvine argues that the Commission should not apportion any CRS exception based on whether a publicly-owned utility was formed before or after February 1, 2001 because (a) DWR did not consider load growth of publicly-owned utilities; (b) the February 1 date is arbitrary; and (c) picking one single cut-off date by which a publicly-owned utility must be formed and providing retail service ignores the realities of forming a publicly-owned utility.

If the Commission maintains the February 1, 2001 date as a basis to define existing publicly-owned utilities that qualify for the CRS exception, SSJID proposes that a certain level of megawatts be set aside for which publicly-owned utilities that commence providing retail service after that date could apply (on a first come, first served basis) in order to receive an exception for new load. SSJID argues that such allocation would be consistent with the fact that the earlier in time in which a publicly-owned utility starts providing retail service after February 1, 2001, the more likely the utility considered or should have considered that this publicly-owned utility would serve new load.

City of Industry recommends that the Commission eliminate the distinction between existing and newly formed publicly-owned utilities but that the Commission provide an exception for Industry's new loads from CRS because Edison knew that Industry would be serving new loads soon after February 1, 2001. Industry supports a CRS exception for all new load of any publicly-owned utility that was either providing electric service or that can document that it had made substantial investments in preparing to provide electric service as of the date of issuance of the Municipal Departing Load Decision, July 10, 2003. Alternatively, Industry asks either that the Commission grant an exception to publicly-owned utilities serving customers as of July 10, 2003 or to any publicly-owned utility serving customers as of either May 1, 2001 or July 10, 2003 (under the rationale that the choice of date depends on whether the focus is on DWR's updated forecast or, for parties who had no notice of the MDL decision on July 10, 2003.

Both Modesto ID and Merced ID support use of the February 1, 2001, cut-off date for deciding whether a publicly-owned utility should qualifying as an "existing" publicly-owned utility, ⁶ and believe that they would qualify for the "existing" new load exception.⁷ Modesto states that municipal departing load which the utilities explicitly or implicitly accounted for in their forecasts should not be subject to the CRS. According to Modesto, new municipal departing load should not be subject to the CRS if such load is (a) served by an existing publicly-owned utility as defined in the MDL Decision or (b) located within the service area of a publicly-owned utility as that service area existed as of February 1, 2001.

NCPA argues that it is premature for the Commission to address allocation issues, because the parties need more information from PG&E about the load forecasts PG&E provided to DWR, and the methodologies behind such forecasts before parties can provide an intelligible scheme for allocation of exceptions. NCPA believes that the fact that an IOU provided a forecast to DWR and DWR relied upon such forecast should not be the end of the inquiry. NCPA argues that the IOUs' forecasts should be reviewed for accuracy, and if the IOUs provided inaccurate information, then the IOUs' shareholders should bear the burden for this amount.

Rancho Cucamonga believes that the February 1, 2001 cut-off date is arbitrary and urges the Commission to adopt the July 10, 2003 date of issuance of the Municipal Departing Load Decision as a cut-off date. Rancho Cucamonga believes that the July 10 date is preferable because it does not require review of what the IOUs or DWR knew or should have known, and deals with any residual concern regarding loopholes.

⁵ See PG&E Comments, pp. 4-5; SDG&E Comments, pp. 5-6; SCE Comments, pp. 4-5; CMUA Comments, pp. 7-8; Industry Comments, p. 1; SSJID Comments, p. 3.

⁶ See Merced ID Comments, pp. 5-6; Modesto ID Comments, pp. 2-3.

⁷ But see Comments of Pacific Gas and Electric Company Regarding Criteria For New Load Exception (filed Aug. 15, 2003) arguing that, while Merced ID may meet certain of the criteria for qualifying as an "existing publicly-owned utility," PG&E believes that, consistent with the principles adopted in D.03-07-028, Merced ID should not qualify for any "new load" exception.