The TURN/PG&E Proposal

According to TURN, the issue in this proceeding is the choice facing a new customer between taking bundled service with a meter provided at no direct cost by the utility, or taking a direct access option that requires the purchase of an interval meter, the direct cost of which would be the customers' responsibility.

To remedy this situation, TURN proposes that all new customers pay for the cost of their meter and installation, even though there would be no change in the utility's ownership of that initial meter.

To offset the up-front payment, TURN proposes that the line extension allowance be calculated in a way that delivers to the new customer the equivalent of the meter ownership credit that existing customers receive when they assume the cost of their own meter. According to TURN, the end result is that the new customer will bear the cost of the meter and its installation, but will also receive an allowance that captures on a one-time basis the removal of costs associated with the embedded meter costs in the utility's distribution rates.

In its December 1, 1998 proposal, PG&E proposed three changes to implement Conclusion of Law 5. First, to eliminate the competitive advantage the utility may have under existing rules in markets for new meter installations, PG&E made the cost of meters a nonrefundable cost to the applicant, and clarified that the cost is not subject to the line and service extension allowances. Second, PG&E proposed to reduce the allowances by an amount equal to RCS credits in order to have the "net revenue" used to calculate the allowance more accurately reflect the portion of the total rate that supports line and service extension costs. Finally, PG&E set forth the specific calculation used to determine the fixed residential line extension allowance.

Subsequent to the presentation of the December 1, 1998 proposal, PG&E and TURN engaged in a number of discussions to identify and resolve any disagreements the parties might have over the proper way to implement D.98-09-070. Following these discussions, PG&E filed an amended proposal on February 10, 1999. PG&E's amended proposal reflects some changes that the company had agreed to with TURN. One change had the utility use the meter reading and partial Energy Service Provider (ESP) billing credits adopted for its electric-only customers, rather than a weighted average that included its dual-fuel customers, for purposes of removing RCS credits from the "net revenues." Also, as proposed by TURN, PG&E's proposal provides that the extension allowance would be calculated in a way that delivers to the applicants for a line and service extension the equivalent of the meter ownership credit that customers would receive when they assume the cost of their own meter.

TURN agrees that PG&E's amended February 10, 1999 tariff proposal correctly reflects TURN's views. Also, TURN believes that PG&E's proposal is fully consistent with Conclusion of Law 5 and recommends that it be adopted for all utilities.

The Edison Proposal

Edison's December 1, 1998 comments describe in some detail the various policy issues that the utility believes are implicated by the goal of achieving competitive neutrality. Edison contends that the Commission should address ownership and competitive issues before the line extension rules are revised so that the Commission avoids replacing one form of undue competitive advantage with another.

In its February 10, 1999, filing Edison presented two alternative sets of tariffs. The "Attachment A" tariffs are consistent with the tariffs submitted by PG&E in its February 10,1999 filing. However, Edison submitted these tariffs "for discussion purposes." The "Attachment B" tariffs represent Edison's preference should the policy and implementation issues raised in its comments remain unresolved. The difference between the two is that the Attachment B version continues to make the meter cost a refundable cost to the applicant, and that cost would continue to be included in the utilities' rate base.