4. Proceeding Background

We instituted this rulemaking on October 5, 2000 to:

(1) "examine the role of customers on a utility's interruptible tariffs to ensure reliable and reasonably-priced electric service within California, especially for the Summer of 2001;

(2) coordinate the variety of interruptible, curtailable and demand responsiveness programs being offered and proposed in California;

(3) identify alternative means for customers to reduce their energy usage during periods of peak demand; and

(4) to revise and update the Commission's priorities for curtailing customers during times of energy shortages." (R.00-10-002, Ordering Paragraph 1.)

We proposed in the Order Instituting Rulemaking that the tariff provisions of PG&E, SCE and SDG&E allowing customers to opt out of interruptible programs during a 30-day window beginning November 1, 2000 be temporarily suspended. We invited comment within 7 days. (R.00-10-002, Ordering Paragraph 5.)

After giving careful consideration to all comments, on October 19, 2000 we issued D.00-10-066. By that order, we suspended until March 31, 2001 the portion of SCE's interruptible tariffs that allowed customers to either opt out of the program, or change their firm service levels, during a 30-day window beginning November 1, 2000. The California Manufacturers & Technology Association (CMTA) filed an application for rehearing on November 20, 2000. On March 15, 2001, we found no legal error in D.00-10-066, and denied the application for rehearing. (D.01-03-045.)

A prehearing conference was held on November 17, 2001. The Scoping Memo and Ruling was filed and served on December 12, 2000. The focus of the proceeding was set in the Scoping Memo and Ruling, with the centerpiece being staff recommendations in an Energy Division Report, followed by comments and reply comments from parties.

Leading up to Energy Division's Report, parties filed and served initial proposals on December 4, 2000; comments on initial proposals on December 11, 2000; additional proposals on December 14, 2000; additional comments on December 21, 2000; and supplementary proposals and comments on January 29, 2001.

We issued an emergency order on January 26, 2001 addressing potential jeopardy to public health, safety and welfare.³ On February 6, 2001, a preliminary ruling was filed and served regarding eligibility for intervenor compensation awards. Also on February 6, 2001, an Assigned Commissioner's Ruling authorized limited public release of confidential or proprietary data and information submitted under Public Utilities Code Section 583 and General Order 66-C.

On February 9, 2001, the Energy Division filed and served its Report. Technical Conferences were held on the Report on February 15, 16 and 20, 2001.

Further supplementary proposals and comments were filed on February 14, 2001. In particular, Joint Parties⁴ filed and served a Joint Proposal on preservation of load curtailment program capabilities.

A motion for evidentiary hearing was denied by Ruling on February 20, 2001. On February 22, 2001, comments on the Energy Division Report were filed and served, along with reply comments on the Joint Proposal. On February 26, 2001, reply comments on the Energy Division Report were filed and served.

Public participation hearings were held on February 22, 2001 in San Francisco, February 26, 2001 in San Diego, February 27, 2001 in Santa Ana, February 28, 2001 in San Bernardino, and March 1, 2001 in Fresno.

On March 16, 2001, the Draft Decision (DD) of Presiding Officer and Assigned Commissioner Carl Wood was filed and served in accordance with Public Utilities Code Section 311(g)(1) and Rule 77.7 of the Commission's Rules of Practice and Procedure. On March 21, 2001, respondent utilities filed and served draft advice letters and tariffs to implement the decisions in the DD, as directed by Ruling issued March 1, 2001.

On March 21, 2001, another DD was filed and served. This DD proposed continuing the limited, temporary suspension of SCE tariffs adopted in D.00-10-066. Comments were filed and served on March 23, 2001, and reply comments were filed and served on March 26, 2001. That DD was adopted on March 27, 2001. (D.01-03-070.)

Emergency motions were filed on March 20 and March 21, 2001 asking for an immediate order to classify all hospitals as essential customers exempt from rotating outages. Hearing was held on these motions on March 22, 2001. By Assigned Commissioner Ruling (ACR) dated March 23, 2001, the motions were granted for hospitals with 100 beds or more, regardless of the status of backup or standby generation. We affirm the ACR, as discussed more below.

On March 27, 2001, respondent utilities were directed by ACR to notify essential and non-essential customers reclassified between June 1, 2000 and the date of the notice. Further, respondent utilities were directed to notify customers of future reclassifications before the reclassification would become effective. We affirm the ACR, as discussed more below.

By ACR dated March 28, 2001, an emergency motion filed by the City and County of San Francisco (CCSF) was granted. PG&E was directed to provide limited information to the Commission, for Commission release to CCSF under strict conditions, which CCSF may use to minimize the impact of rotating outages. Further, SCE was directed to meet with the City of Huntington Beach to determine what data not already provided can be reasonably provided to help Huntington Beach meet its public health and safety obligations during a rotating outage. We affirm the ACR.

Motions for final oral argument were filed and served on March 14, 2001. Final oral argument was held on March 22, 2001. Comments on the March 16, 2001 DD, including comments on the draft advice letters and tariffs, were filed on March 26, 2001, and reply comments were filed on April 2, 2001. We incorporate changes to the March 16, 2001 DD in today's order based on the entire record before us, taking everything into account including final oral arguments, comments, and reply comments. Unless discussed otherwise, we affirm rulings made by the Administrative Law Judge and the Assigned Commissioner.

³ D.01-01-056. We granted limited waiver of penalties for two public utility customers on interruptible rate schedules in response to a recommendation from the California Energy Commission (CEC). We suspended further assessment of penalties that customers on interruptible schedules would otherwise incur for failing to curtail upon request, along with the tolling of hours and number of curtailments. Finally, we directed respondent utilities not to bill customers for already incurred penalties, and to track all penalties in a memorandum account for the period from October 1, 2000 through January 25, 2001. We stated that we would later address whether or not past penalties would be waived. Applications for rehearing were filed on February 26, 2001 by SCE and The Utility Reform Network (TURN).