ALJ/MLC/jva Mailed 4/22/2005

Decision 05-04-053 April 21, 2005

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Application of Pacific Gas and Electric Company for Authority to Implement Default CPP Rate Options For Large Customers.	Application 05-01-016 (Filed January 20, 2005)
Application of San Diego Gas & Electric Company (U902-E) for Adoption of a 2005 Default Critical Peak Pricing Structure for Commercial and Industrial Customers with Peak Demands Exceeding 300 kW.	Application 05-01-017 (Filed January 20, 2005)
Southern California Edison Company's (U338-E) Application for Approval of Rate Design Proposals for Large Customers.	Application 05-01-018 (Filed January 20, 2005)

(See Appendix A for List of Appearances)

OPINION ADDRESSING CRITICAL PEAK PRICING RATES FOR CUSTOMERS 200 KILOWATTS AND LARGER

TABLE OF CONTENTS

TITLE PAGE

OPINION ADDRESSING CRITICAL PEAK PRICING RATES
FOR CUSTOMERS 200 KILOWATTS AND LARGER 22

1. Summary 22

2. Procedural History 22

3. The Proposals Presented 55

4. The Parties' Positions 99

4.1 Commercial/Retail Building Operators 99

4.2 Large Manufacturing and Industrial Customers 1414

4.3 Agricultural Interests 1919

4.4 School Districts 2121

4.5 Transit Systems 2222

4.6 Petroleum Producers and Transporters 2222

4.7 Generation Interests 2323

4.8 Demand Response/Advanced Metering Companies 2525

4.9 CAISO 2626

4.10 Small Customer Interests 2626

5. Issues Presented 2828

5.1 Will implementation of critical peak pricing tariffs result in demand reduction for Summer 2005? 2828

5.2 From a policy standpoint, should any customers with loads of
200 kW and above be exempted from critical peak pricing rates
in Summer 2005? 3232

5.3 Is there sufficient time for the targeted customers to be educated
about the rates prior to implementation, to understand how to
respond for this summer? 3737

5.4 Given the projected demand response for the targeted customers
and issues surrounding short term customer education, should the Commission move forward with implementing a default critical peak pricing tariff for Summer 2005? 3939

TABLE OF CONTENTS

TITLE PAGE

6. Are the features of the proposed tariffs the best way to design a critical
peak pricing tariff for the future? 4141

6.1 Investment Signal to Customers 4141

6.2 Establishing Revenue Requirement Upon Which to Design Rates 4545

6.3 Event Triggers 4848

6.4 Limit on Events 5050

6.5 Non-Firm Conversion to BIP 5050

6.6 Customer Education Efforts 5252

7. Process for 2006 5353

8. Modifications to Voluntary Critical Peak Pricing Tariffs 5656

8.1 Eligibility Changes 5757

8.2 Notification Changes 5858

8.3 Trigger Changes 5858

8.4 Bill Protection Changes 6060

8.5 Pricing Changes 6161

8.6 Miscellaneous Changes 6161

9. Incremental Programs to Expand Demand Response for Summer 2005 6262

9.1 SDG&E Day-Of Reliability Tariff 6363

9.2 Reopen ISO Demand Relief Program 6464

9.3 Aggressively Market Existing Programs 6666

9.4 Summary of 2005 Programs 6666

10. Comments on Proposed Decision 7474

11. Assignment of Proceeding 7474

Findings of Fact 7575

Conclusions of Law 7777

ORDER 8181

OPINION ADDRESSING CRITICAL PEAK PRICING RATES FOR CUSTOMERS 200 KILOWATTS AND LARGER

1. Summary

After reviewing the potential demand reduction realistically achievable from implementing the proposed default critical peak tariffs by June 1, 2005 for customers over 200 kilowatts (kW) in demand, the bill impacts (both positive and negative) for customers assuming both no changes in usage and significant changes in usage, and the likelihood that customers would have sufficient information and time to make changes to their loads beginning June 1, 2005, we will not adopt new default rates for Summer 2005. Instead, we lay out information learned from these applications and a process to capture the lessons learned as with the goal of comprehensive rate design reform for 2006. We also make modifications to the current voluntary critical peak pricing tariffs for all three utilities and adopt a new tariff for San Diego Gas & Electric Company (SDG&E) to provide for interruptible capacity in its service territory.