ALJ/TRP/sid Mailed 5/12/2006
5/11/2006 Item 27
Decision 06-05-018 May 11, 2006
BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA
Order Instituting Rulemaking Regarding the Implementation of the Suspension of Direct Access Pursuant to Assembly Bill 1X and Decision 01-09-060. |
Rulemaking 02-01-011 (Filed January 9, 2002) |
OPINION RESOLVING PETITION FOR MODIFICATION
OF DECISION 03-09-052
I. Introduction
In this decision, we grant, in part, and deny, in part, the Petition for Modification of Decision (D.) 03-09-052, filed by Pacific Gas and Electric Company (PG&E) on July 18, 2005. In D.03-09-052, the Commission addressed the motion of the Central Valley Project Preference Power Post-2004 Implementation Group (CVP Group) regarding the applicability of the "Cost Responsibility Surcharge" (CRS) to preference power customers for Western Area Power Administration (WAPA) power purchased after 2004. The CVP Group consists of certain "preference power customers"1 under contracts with the WAPA.2 In D.03-09-052, we determined that preference power customers meeting their full power requirements through WAPA bear no CRS obligation, but for that portion of their power needs provided through bundled utility service (referred to as "split wheeling"), they remained responsible for the CRS.
After the issuance of D.03-09-052 in September 2003, PG&E engaged in negotiations with WAPA, the Commission, and various WAPA customers concerning termination of Contract 2948A. Under the terms of Contract 2948A, WAPA integrated its facilities with those of PG&E in support of WAPA sales of firm power to preference power customers.
On March 31, 2004, PG&E filed at the Federal Energy Regulatory Commission (FERC) seeking, among other things, to cancel terms of Contract 2948A and to replace it with successor arrangements.3 The principal successor agreement relating to service area and customer-related issues was the "Service Agreement for Wholesale Distribution Service to Western Area Power Administration" (WDT Agreement). The WDT Agreement was filed at FERC in connection with an "Offer of Settlement" on various issues.4
PG&E subsequently sought to implement a new Rate Schedule E-NWDL (New WAPA Departing Load) by filing Advice Letter (AL) 2592-E on November 19, 2004. PG&E intended to apply Rate Schedule E-NWDL to customers that "discontinue or reduce their purchases of bundled or direct access electricity service from PG&E to receive electricity from WAPA (or another similarly situated entity), not pursuant to Contract 2948A, but rather under a new contractual agreement." [Petition at page 2.] PG&E designated such customers by the term WAPA "new allottees."
By letter dated May 16, 2005, the Commission's Energy Division Director rejected the AL 2592-E filing, and informed PG&E that the issues raised therein should be brought before the Commission through a formal application. By supplemental letter on June 2, 2005, the Energy Division Director clarified that PG&E could also bring the matter as a Petition for Modification of D.03-09-052. PG&E thus filed the instant Petition for Modification on July 18, 2005, seeking confirmation that customers subject to CRS and other nonbypassable charges covered in D.03-09-052 included WAPA "new allottees."
The Power and Water Resources Pooling Authority (PWRPA)5 filed a response in opposition to PG&E's Petition for Modification on August 17, 2005, arguing for further discovery. PWRPA claimed that the Petition lacked factual support and was unduly vague in its use of the term WAPA "new allottee." PG&E filed a third-round reply on August 29, 2005. In its reply, PG&E provided further information in support of its Petition. PG&E clarified the definition of the term "new allottee" as referring to new points of interconnection taking service from WAPA for the first time after January 1, 2005. PG&E provided additional argument in support of its Petition based on the claim that the California Department of Water Resources (DWR) did procure power on behalf of WAPA "new allottees."
In response to the claim that its Petition lacked factual support, PG&E attached to its reply the Declaration of Dennis M. Keene, manager of the PG&E Service Analysis Department. Keene is responsible for the group that supports PG&E's customer retention and economic development efforts.
On September 6, 2005, the PWRPA filed a motion seeking a ruling as to how the Commission would address the issues in PG&E's Petition. PWRPA argued that the definition of "new allottee" provided in PG&E's August 29th response should be treated as an amendment to its original Petition, and that parties should have an opportunity to present testimony and to challenge the legal and factual merits of PG&E's assertions.
On September 21, 2005, PG&E filed a response in opposition to the PWRPA motion, arguing that the record was adequate for the Commission to grant its Petition, and that no further procedural measures were necessary as a basis to grant its Petition.
On December 22, 2005, PWRPA filed an additional motion to supplement the record and repeated its request for a ruling to provide guidance as to how the issues raised by PG&E's Petition would be addressed. PWRPA attached to its motion the Declaration of Stuart Robertson, its economic and technical consultant.
PWRPA asked the Commission to provide for the following measures:
1. Notice to all parties that they may be affected by PG&E's amended definition of the term "new allottee";
2. An opportunity for parties to respond to the Amended PG&E Petition as it relates to PG&E's new definition of the term "new allottee";
3. An opportunity for parties to supplement the record with evidence relevant to the consideration of the Amended PG&E Petition; and
4. A prehearing conference (PHC) to address the scope and schedule for the Commission's consideration of PG&E's Amended Petition, the need for evidentiary hearings, and any other pertinent procedural matters.
PG&E filed a response to the PWRPA motion on January 6, 2006, indicating no opposition to receipt of the Robertson Declaration into the record. PG&E did, however, take issue with certain assertions in the Declaration. PG&E also reiterated its position that no further proceedings were necessary.
An Administrative Law Judge's (ALJ) ruling, issued on January 19, 2006, granted the PWRPA request to supplement the record with the Robertson Declaration. A PHC was convened on February 2, 2006, where parties had the opportunity to present arguments on further procedural measures necessary to provide an adequate record. At the PHC, parties agreed that no evidentiary hearings and no further pleadings were necessary.
The Assigned Commissioner and ALJ directed the parties to meet and confer to seek agreement on a joint proposal for settling the disputed issues raised by PG&E's Petition, and to report on their progress by February 17, 2006. PG&E notified the assigned ALJ by email on February 17, 2006, that the parties had been unsuccessful in arriving at a settlement of disputed issues. While PWRPA requested that a mediator be provided to facilitate further discussions, PG&E opposed this request and believes that the matter is now ready to be resolved by a Commission decision.
1 "Preference power customers" refers to those entities granted a preference by WAPA when contracting to sell surplus federal power, and includes "municipalities and other public corporations or agencies; and also cooperatives and other nonprofit organizations financed in whole or in part by loans made pursuant to the Rural Electrification Act of 1936 (7 USC 901 et seq.)."
2 WAPA is a power marketing agency within the U. S. Department of Energy that sells capacity and energy generated by the U. S. Bureau of Reclamation at Central Valley Project (CVP) hydroelectric plants that is surplus to the CVP's own project power consumption.
3 See FERC Docket No. ER04-690-000 et al.
4 FERC accepted the settlement package, including the WDT Agreement and appendices, on December 3, 2004. (See PG&E, 109 FERC ¶ 61,255 (2004).)
5 The PWRPA was organized and established by the CVP Group on January 22, 2004, under a Joint Powers Agreement for the purpose of, among other things, aggregating and supplementing preference power deliveries under WAPA's post-2004 Marketing Plan. The PWRPA participants include the same members as the former CVP Group.
