9. Implementation

We are persuaded by parties that we must implement today's decision without delay. Quick implementation is needed to allow reasonable opportunity for programs to be finalized and marketed, customers to be subscribed, and meters and other equipment to be installed (to the extent feasible and necessary).

To facilitate implementation, Assigned Commissioner Wood issued a ruling on March 1, 2001 directing respondent utilities to begin crafting advice letters and tariffs. Consistent with that ruling, respondent utilities filed and served draft advice letters and tariffs on March 21, 2001 implementing the decisions in Commissioner Wood's DD. Comments and reply comments on the draft advice letters and tariffs were included in comments and reply comments on the DD. This has greatly facilitated our ability to move quickly.

As a result, we direct that within 5 days of today respondent utilities file and serve advice letters and tariffs to implement today's orders. Those advice letters and tariffs will become effective in 5 days, unless suspended by the Energy Division Director. The Director may require that respondent utilities file and serve amended advice letters and tariffs at his direction to implement today's order. Further, the Director may require each respondent utility to file and serve individual advice letters and tariffs as needed to separately implement portions of today's order.

Findings of Fact

1. Interruptible programs are not inexpensive, and in some cases cost the same or more than prices charged in the dysfunctional electricity wholesale market, with current interruptible programs costing about $220 million per year for about 2,200 megawatts of available interruptible load.

2. D.00-10-066 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, with the suspension continued by D.01-03-070.

3. D.01-01-056 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.

4. During January 2001, there was almost continuous use of interruptible programs, substantially exhausting the programs for the rest of 2001.

5. Electricity market experience during January 2001 was far from the normal expectation.

6. The electricity system is operating outside reasonable bounds, or any realistic assumptions, that customers could have been expected to use in their analyses of whether or not to participate in interruptible programs.

7. On January 17, 2001, Governor Gray Davis proclaimed a State of Emergency.

8. Market conditions have dramatically changed from those that existed in prior years.

9. Businesses and other customers grow, modify processes, and make other changes over time.

10. Many SCE customers would have elected to opt out or change firm service level in November 2000 if it had not been temporarily suspended by D.00-10-066.

11. Lifting the suspension now will permit respondent utilities and the ISO to have a more reliable base of interruptible load for Summer 2001, and more knowledge of the truly available interruptible resources from which to manage conditions in Summer 2001.

12. The market became particularly chaotic in November 2000, when the number of Stage 2 and Stage 3 events began to increase.

13. SCE's current practice is to make an opt-out or change in firm service level effective with the beginning of the next billing cycle.

14. The need for existing programs is unlikely to end by March 31, 2002.

15. Limiting existing program use to one 6-hour event per day, 4 events per calendar week, and 40 hours total per month, will extend program availability.

16. The emergency circumstances exception in SDG&E tariffs requires SDG&E to interrupt customers during a system emergency even when the customers have reached their maximum hourly limit under other tariff provisions.

17. In January 2001, customers on SDG&E Schedules A-V1 and A-V2 were notified of the need to interrupt almost every day, and, as a result, many customers terminated service on these schedules.

18. All curtailments in 2001 have been called in accordance with the system emergency clause in SDG&E's tariffs, not the interruptions subject to an 80-hour per year limit in SDG&E's tariffs.

19. Modified retention of the emergency circumstances exception in SDG&E's tariffs will prevent customers' exposure to unlimited interruptions, and substantial exodus from SDG&E's interruptible tariffs.

20. PG&E's interruptible program is limited to 100 hours of interruptions, and SCE's program is limited to 150 hours.

21. Current interruptible tariffs do not limit a customer's right to continue using electricity during curtailment periods, subject to substantial penalty for failing to curtail.

22. Caliber One does not claim to be a public utility regulated by the Commission, no party claims that Caliber One is a public utility regulated by the Commission, and no evidence is presented that Caliber One is a public utility regulated by the Commission.

23. Caliber One and parties had several opportunities to raise and address Caliber One's issue concerning whether or not interruptible customers have the right to willfully refuse to comply with an interruption notice without breaching their obligations.

24. An interruptible customer's willful refusal to curtail may defeat the public purpose goal of the interruptible program in the specific instance where the customer shifts the risk of penalties from itself to others by use of insurance.

25. Interruptible programs have been largely exhausted for 2001 based on extensive use in January 2001.

26. A replacement fixed payment for capacity interruptible program is necessary.

27. A reasonably simple approach is needed for the VDRP to be successful.

28. Most customers state that their business is conducting their business, not buying and selling electricity, and not constantly monitoring the electricity market to make decisions about buying electricity or curtailing their operations.

29. A fixed rate for the VDRP, subject to limited modification as needed, is efficient and simple.

30. The Energy Division's recommendation of $0.15/kWh is too low given prices in the current dysfunctional market, but the Joint Parties recommendation of $0.50/kWh to $0.75/kWh is too high, reflecting prices at the unreasonable levels in today's dysfunctional wholesale market.

31. A dual rate for the VDRP (between day ahead and day of) is needlessly complex, and will encourage customers to withhold supply, waiting for the higher rate.

32. A minimum payment to VDRP participants provides compensation for at least some of their cost and inconvenience for participation.

33. Satisfaction and participation in an air conditioner cycling program will decline if the program is overused by the utility.

34. The CEC estimates that 14,000 MW of air conditioning load (28% of total load) occurs during the state's summertime peak demand of 50,000 MW, with about 7,000 MW commercial, and about 7,000 MW residential.

35. Comverge Technologies, Inc. can assume full responsibility for turnkey projects, take the financial risk on a pay-for-performance basis, and use existing paging companies for radio communication.

36. Comverge can use radio signals in an interruptible program with a wide range of appliances (from air conditioners to electric water heaters, pool pumps, or other electric motors) in residential, commercial or industrial settings.

37. The 20% maximum load reduction required in the current OBMC program is too onerous, and will reduce the ability of customers to use this program.

38. The economic damage criterion for participation in the OBMC program limits the candidate pool for participation.

39. Failure to account for recent conservation efforts reduces the incentive to participate in an OBMC program, while failure to recognize reasonable growth in demand over time similarly penalizes participation.

40. Measuring 5% OBMC increments against usage over the last 10 days is the most up-to-date measurement reflecting current conditions when actual system conditions otherwise require mandatory curtailments.

41. Measuring 20% OBMC total reduction against the prior year's average peak usage for the same month recognizes yearly variations, and does not penalize customers for near term demand reduction efforts.

42. Using a baseline for OBMC of the average demand for the same period will prevent comparison of off-peak with on-peak hours, or other dissimilar comparisons.

43. It will facilitate further study of SDG&E's HVAC program to provide meters and communication equipment without charge to customers who participate in the VDRP.

44. There is no net benefit to California for ISO and respondent utility programs which are similar to compete for subscribers at different prices.

45. Many customers are exempt from rotating outages because they share a circuit with an essential customer.

46. Inclusion of non-essential customers who are now on exempt circuits in the rotating outage pool increases the amount of load available for emergency curtailment by thousands of megawatts, thereby significantly reducing the frequency and duration of outages all other customers may face, and more equitably distributing the burden of outages.

47. Inclusion of non-essential customers in the rotating outage pool ensures that all non-essential customers experience the same incentive to voluntarily curtail use before mandatory curtailments are initiated, thereby assisting the entire State weather the current crisis.

48. Isolating essential from non-essential customers must be carefully studied to promote equity between customers, and to cost-effectively increase the available pool for mandatory curtailment.

49. Equity between customers is compromised by treating customers differently for purposes of rotating outages based solely on service voltage.

50. Limiting the pool of customers subject to rotating outages increases the likelihood of outages for those in the rotating outage pool, while the excluded customer is protected.

51. About 75% of transmission level customers cannot be easily curtailed by the utility without extensive interaction with, and cooperation from, the customer.

52. Limiting an essential customer's participation in interruptible programs to no more than 50% of average peak load will balance some contribution by the customer when it is feasible for the customer to do so with the customer's essential status.

53. Outages affecting fossil fuel producers, pipelines, and users, if not coordinated, may cause unacceptable jeopardy to public health and safety.

54. The ISO may give very short notice (e.g., 10 minutes) of a Stage 3 mandatory curtailment.

55. Cost-effective utility treatment of remotely and manually controlled circuits can likely be improved to promote efficiency and equity.

56. It is important to study and implement all reasonable steps for SCADA and non-SCADA execution of rotating outages to ensure that forced outages are accomplished with optimal equity and efficiency, as well as within reasonable cost.

57. The consequences of customer reclassification from essential to non-essential categories can be great given the increased occurrence of rotating outages in 2000 and 2001, and increased likelihood of rotating outages through the rest of 2001 and possibly beyond.

58. PG&E provides electric service to approximately 48,000 medical baseline customers, of whom about 22,000 are classified as "life support" customers, while SCE has about 27, 000 medical baseline customers, of whom about 2,200 are critical care customers.

59. An infrastructure currently exists in the medical community and industry to supply and inspect backup devices for vital medical equipment that need not be duplicated by utilities.

60. The number of calls to life support, critical care and medical baseline customers may be a problem if such calls are required during all Stage 3 events but not all Stage 3 events result in a rotating outage.

61. Electric service to industrial customers may be especially critical to public health and safety if, or example, the curtailment of electricity causes the release of chemicals or toxins.

62. Rotating electrical outages cause particular concern for public health and safety when they involve underground transit systems, such as BART and MUNI.

63. It is technically feasible to exempt BART from rotating outages without significant negative effects on PG&E's overall emergency response plan, and PG&E asks that the underground component of MUNI be similarly exempt.

64. PG&E includes a rotating outage block number on customer bills, but neither SCE nor SDG&E notify their customers of the rotating outage block to which the customer is assigned.

65. Customers need and expect reasonable, timely and accurate information on rotating outages, and public health and safety may depend upon it.

66. Sixteen of 28 rural counties do not have a hospital with more than 100 beds.

67. Severity of sickness or injury is not a function of the geographic location of the patient.

68. The backup or standby generation required by Office of Statewide Health Planning and Development regulation does not satisfy Commission requirements for minimal essential uses for hospitals.

69. Exempting hospitals with 100 beds or more from rotating outages does not disturb or compromise the Commission's determination to maintain at least 40% of available load for rotating outages.

70. Water and sewage treatment utilities have backup generation or other capacity for operation and storage during power interruption, and have reasonably prepared for power interruptions which may occur from a number of causes.

71. Existing rules allow water and sewer utilities to request partial or complete rotating outage exemption, or partial or complete service restoration, based on an emergency.

72. Additional funds not now available from existing rates may be needed for utility implementation of some, but not all, programs and studies ordered herein.

73. ISO rates are set by FERC.

74. PG&E and SCE have approximately the same customer base, SDG&E has a much smaller customer base, and SCE generally had the most interruptible program success.

75. Current interruptible program costs are about $100 per kW per year.

Conclusions of Law

1. SCE's interruptible customers should be permitted to opt out or change firm service level without complicated conditions, with an effective date of either November 1, 2000, the date beginning with the customer's next billing cycle, or a date between the date of notice and the beginning of the next billing cycle if such date is agreed to between the customer and SCE.

2. The limited time and resources of parties and the Commission are most reasonably devoted to positive solutions for Summer 2001 rather than designing more precise formulas, additional rules, deadline extensions, and other remedies to restructure prior obligations to meet current market and business realities.

3. SCE interruptible customers should have an opportunity to elect opt-out or change firm service level during a 15-day window beginning upon service of notice to customers of this option.

4. SCE should provide written notice to each affected customer within 10 days of the date the tariff becomes effective, including a calculation of the effect of selecting the November 1, 2000 date.

5. A customer who elects to opt-out or readjust firm service level back to November 1, 2000 should repay the discounts received from November 1, 2000 through the present, but not pay any otherwise incurred penalties for failure to curtail when asked during that time, and should not be assessed interest.

6. A customer who elects to opt-out or readjust now, or up to the beginning of the next billing cycle, should retain the rate discount for interruptible service through the date of any change in schedule or firm service level, but should to pay any penalties incurred for failure to interrupt when asked by the utility under the interruptible schedule through the time the opt-out or adjustment in firm service level is effective, with waiver of any penalty between the date penalties are reinstated and the date of opt-out or adjustment in firm service level.

7. SCE interruptible customers who opt out in the authorized 15-day window should not be allowed to participate for one year in either any other program that pays a capacity payment, or a similar ISO program, including the Ancillary Load Services Program.

8. Existing interruptible programs should be extended through December 31, 2002, and program use should be limited to one 6-hour event per day, 4 events per calendar week, and 40 hours total per month.

9. The emergency circumstances exception should be retained in SDG&E's interruptible program tariffs subject to a total annual limit, and the annual interruption limit should be increased from 80 to 120 hours.

10. An interruptible customer's willful refusal to comply with interruption notices does not constitute a breach of SCE's current interruptible Schedule I-6.

11. PU Code Sections 701, 728 and 743(f) give the Commission authority to regulate public utilities, and contracts between public utilities and utility customers.

12. Caliber One is not a public utility regulated by the Commission.

13. The Commission regulates the terms and conditions of interruptible tariffs and contracts between public utilities and customers, but not contracts between non-public utilities, whether or not the agreement references a regulated rate or tariff.

14. Adequate notice and opportunity to comment have been given on the insurance issue raised by Caliber One.

15. An existing or new customer should not be eligible for continued or new subscription to interruptible tariffs unless the customer files a declaration under penalty of perjury with the utility stating that the customer does not have, and will not obtain, any insurance covering payment of paying non-compliance penalties for willful failure to comply with requests for curtailment.

16. The suspension of penalty provisions imposed by D.01-01-056 should now be removed, but reinstated penalties should not apply for any customer who opts-out or changes firm service level (to the extent the change negates penalties) effective November 1, 2000 and repays discounts.

17. The new BIP program should be adopted.

18. The VDRP program should be adopted, with the rate set at $0.35/kWh.

19. SCE's existing air conditioner program should be reopened, and the new program adopted, for all customers at the several cycling options described in this decision.

20. SCE should be required to raise the issues of air quality, compatibility with other building code requirements, and customer satisfaction when marketing the 100% air conditioning cycling option.

21. The maximum OBMC curtailment percentage on a circuit should be reduced from 20% to 15%.

22. Respondent utilities should notify large customers of the OBMC within 21 days of today, and coordinate communications between interested customers.

23. The economic damage criterion should be removed from the OBMC program.

24. Meters should be provided without charge to participants in the SDG&E HVAC program if they also participate in the VDRP.

25. A customer subscribed to a utility interruptible program should not be permitted to subscribe to a similar ISO program until the customer has exhausted participation in the utility program, or be permitted to opt-out of a utility program to participate in an ISO program, but should be allowed to participate in ISO programs that are different than the utility program in which the customer is subscribed.

26. A customer subscribed to a utility interruptible program or who has been permitted to opt-out of a utility interruptible program should not be permitted to participate in the ISO's Ancillary Services Load Program nor the ISO's DRP.

27. Respondent utilities should not act as aggregators for ISO programs.

28. Respondent utilities are authorized to act as aggregators for bids in the ISO's DRP accepted as of the effective date of this order.

29. Respondent utilities should study and report on reconfiguring circuits to isolate essential from non-essential customers, and increase the pool of non-essential customers available for rotating outages by Summer 2001, Summer 2002, and beyond.

30. The Energy Division Director should have delegated authority to authorize cost-effective, reasonable circuit reconfigurations for projects up to a cumulative total of $5 million each for PG&E and SCE, and $1 million for SDG&E.

31. Respondent utilities should include transmission level customers in rotating outages, subject to their exclusion if they are essential use customers, participate in OBMC, supply power to the grid in excess of load, jeopardize system integrity by their inclusion in rotating outages, or are otherwise exempt by the Commission.

32. Utilities should give transmission level customers a reasonable opportunity to become net suppliers to the grid at the time of a rotating outage, but failure to become a net supplier in a reasonable amount of time should result in the customer loosing the exemption.

33. A respondent utility should install automatic switching equipment, controlled by the utility, at the transmission customer's expense, if the customer refuses to drop load upon request, subject to a $6/kWh penalty for load that was not dropped.

34. Essential customers may subscribe to interruptible tariffs, but eligibility should be screened by the utility, wherein the utility should require a declaration submitted under penalty of perjury as described in this decision for the purpose of such screening, and the customer should not be permitted to subscribe more than 50% of its average peak load to interruptible service.

35. Respondent utilities should coordinate interruptions, to the extent feasible, between fossil fuel producers, pipelines and users to minimize disruption to public health and safety.

36. Respondent utilities should study and report on the cost of dispatching personnel versus installing automated equipment in remote locations to implement forced outages.

37. Utilities should implement the directions in the March 27, 2001 ACR regarding notification to customers who have been reclassified between essential and non-essential categories.

38. Reclassification complaints filed with the Commission should be processed using the Commission's expedited complaint procedure, and the burden of proof should shift to respondent utility upon the filing of a complaint that reasonably alleges the utility has acted or failed to act as required.

39. Respondent utilities should examine potential improvements to programs which notify a life support, critical care or medical baseline customer when a rotating outage likely to affect the customer is imminent, and should report to the Commission on these programs.

40. Respondent utilities should report on their recent efforts undertaken with OSHA and/or OES to address particular and unique risks to employee and public health and safety from imminent electrical outages to industrial customers in Summer 2001.

41. BART, and the underground portions of MUNI, should be exempt from rotating outages.

42. PG&E should report on the necessary and reasonable mitigation measures to which PG&E and MUNI have agreed, and the measures that PG&E has, or will, implement.

43. The Executive Director should serve a copy of this decision on other rail transit systems under Commission jurisdiction, inviting those transit systems to consider public health and safety issues affecting their systems due to the serious potential of a number of electrical outages in 2001 and 2002.

44. SCE and SDG&E should address in Phase 2 the need, desirability and reasonableness of including a rotating outage block number on each customer bill, with a notice that the block may change without notice based on operational conditions.

45. Sick or injured people in rural hospitals can be just as sick or injured as their urban counterparts, and deserve the same level of protection for electricity services.

46. Respondent utilities should exempt hospitals from rotating outage regardless of the status of backup or standby generation, as provided in the March 23, 2001 ACR.

47. The essential customer list should be amended to include all hospitals, and respondent utilities should submit information in Phase 2 on the effect this change has had on mandatory curtailments, including the number of circuits and megawatts that are available for rotating outage before and after the change.

48. Each respondent utility should file an updated rotating outage action plan within 45 days.

49. The following should not be authorized at this time: the customer recognition program; modification of the essential customer list for water districts, sewer districts, ancillary government services, or networks; any changes in the notice provided to interruptible customers by respondent utilities; and the SLRP.

50. FERC approval is uncertain regarding ISO funding of utility interruptible programs and the costs for changed curtailment priorities.

51. A surcharge on respondent utility rates to fund new interruptible programs plus the costs for changed curtailment priorities is inconsistent with the current rate freeze, and SDG&E's PBR, and should not be adopted.

52. The funding in DWR rates of respondent utility interruptible programs plus the costs of changed curtailment priorities is currently not an option.

53. Each respondent utility should establish a memorandum account to track all dollars it spends and receives above funds authorized in current rates to implement any decision in today's order regarding interruptible programs and curtailment priorities.

54. Each respondent utility should implement today's orders without delay as part of its public utility obligation.

55. Interruptible programs and curtailment priorities should be capped at the following megawatt and annual dollar limits:

INTERRUPTIBLE PROGRAM

AND CURTAILMENT PRIORTY LIMITS

THROUGH DECEMBER 31, 2002

56. The megawatt limits should include currently subscribed megawatts, and should be the total megawatts that may be subscribed to interruptible programs through December 31, 2002.

57. The annual dollar limits should include amounts funded in current rates, plus those recorded in the memorandum account of each respondent utility, for total interruptible program costs, and new costs implementing changes to curtailment priorities.

58. Each respondent utility should report monthly on the programs we order today, and the costs and revenues that are being incurred.

59. Each respondent utility should file one or more advice letters with tariffs within 5 days of today to implement today's orders, with those advice letters and tariffs becoming effective in 5 days, unless suspended by the Energy Division Director.

60. This order should be effective today to allow reasonable opportunity for programs to be finalized and marketed, customers to be subscribed, and meters and other equipment to be installed for Summer 2001 program implementation.

INTERIM ORDER

IT IS ORDERED that:

1. Within five days of the date of this order, respondent utilities Pacific Gas & Electric Company (PG&E), Southern California Edison Company (SCE), and San Diego Gas & Electric Company (SDG&E) shall each file and serve an advice letter with revised tariffs. The advice letters with revised tariffs shall implement the directions in this order and Attachment A. Each advice letter with tariffs shall be in compliance with General Order 96-A. The advice letters and tariffs shall become effective five days after filing, unless suspended by the Energy Division Director. The Energy Division Director may require a respondent utility to amend its advice letter and tariffs to comply with the orders herein, and may require a respondent utility to file and serve individual advice letters and tariffs as needed to separately implement portions of today's order.

2. A protest to an advice letter filed and served by a respondent utility to modify the Voluntary Demand Response Program rate shall be filed and served within 10 days of the date the advice letter is filed.

3. The priority system for rotating outages stated in this order and in Attachment C shall supercede the existing priority system 10 days from today, and shall be implemented by each respondent utility. PG&E shall exempt the Bay Area Rapid Transit District, and the underground portions of the San Francisco Municipal Railway (MUNI), from rotating outages. Within 21 days of today, each respondent utility shall notify customers using 500 kilowatts or more (average peak demand) of the adopted Optional Binding Mandatory Curtailment Program, and shall coordinate communication between customers on a circuit when one customer expresses its intent to participate. All hospitals shall be exempt from rotating outages regardless of the status of backup or standby generation.

4. Respondent utilities shall file and serve the adopted studies and reports shown in Attachment D according to the schedule, terms and conditions stated in this order and in Attachment D. Parties may file and serve comments, responses or protests as provided in Attachment D. Responses or protests to any application or advice letter filed by a respondent utility to implement any matter raised by such study or report shall be filed and served within 10 days of the date the application or advice letter is filed and served. The Assigned Commissioner and Presiding Officer, or the Administrative Law Judge, may change these dates by ruling.

5. The Energy Division Director may authorize respondent utilities to implement cost-effective, reasonable circuit reconfiguration projects to isolate essential from non-essential customers up to a cumulative total of $5 million for PG&E, $5 million for SCE, and $1 million for SDG&E.

6. Respondent utilities shall implement the notification procedures stated in the March 27, 2001 Assigned Commissioner Ruling for customers reclassified between essential and non-essential categories. Customer complaints filed with the Commission shall be processed using the Commission's expedited complaint procedure. The burden of proof shall be upon the serving utility once a complaint is filed with the Commission that reasonably alleges the utility has acted or failed to act as required.

7. In the event MUNI files a formal complaint regarding mitigation measures to protect MUNI passengers and staff from a rotating outage, MUNI shall serve a copy on PG&E the same day that it is filed with the Commission. PG&E shall file and serve its answer within 10 days of the date the complaint is filed. The Assigned Commissioner and Presiding Officer, or the Administrative Law Judge, may change these dates by ruling.

8. The serving respondent utility shall install, at the transmission customer's expense, automatic equipment controlled by the utility to implement rotating outages if a transmission level customer is not exempt from rotating outages but fails to cooperate and drop load at the request of its serving utility. A transmission level customer who refuses to drop load before installation of equipment to implement rotating outages shall be subject to a penalty of $6/kWh for all load requested to be curtailed that is not curtailed. Transmission level customers excluded from rotating outage on the basis of being a net supplier to the grid shall have a reasonable opportunity to become a net supplier at the time of the rotating outage. Failure to become a net supplier within a reasonable amount of time shall result in the customer loosing the exemption. The $6/kWh penalty shall not apply if the customer's generation suffers a verifiable, and verified, forced outage, and during times of scheduled maintenance. The scheduled maintenance must be approved by both the Independent System Operator and respondent utility, but approval may not be unreasonably withheld.

9. Respondent utilities shall reasonably coordinate interruptions, to the extent feasible, between fossil fuel producers, pipelines and users to minimize any disruption to public health and safety.

10. Each respondent utility shall file and serve an application or advice letter seeking Commission authorization to implement an Occupational Health and Safety Administration (OSHA) or Office of Emergency Services (OES) recommendation regarding the exemption of an industrial customer from rotating outages to protect public health and safety. Respondent utility shall file this application or advice letter only if specific Commission authorization is needed but not yet available. The application or advice letter shall include a statement from OSHA and/or OES in support of the request, showing that no other reasonable means to protect public health and safety are available other than exemption from rotating outage.

11. The Executive Director shall serve a copy of this decision on Los Angeles County Metropolitan Transit Authority, Sacramento Regional Transit District, Santa Clara Valley Transportation Authority, and San Diego Trolley Incorporated. The cover letter shall invite these rail transit systems to evaluate public health and safety concerns on their systems due to the serious potential of a number of electrical outages in 2001 and 2002. It shall recommend that each system discuss the matter with their serving utility, and cooperatively implement any reasonable and necessary mitigation measures. It shall also invite each system to make a joint proposal, in cooperation with its serving utility, other rail transit systems, and the Commission's Rail Safety and Carrier Division, regarding any mitigation measures that should be considered by the Commission, and which require Commission authorization

12. SCE and SDG&E shall, and other parties may, address in Phase 2 the need, desirability and reasonableness of SCE and SDG&E including a rotating outage block number on each customer bill, with a notice that the block may change without notice based on operational conditions. Parties shall include this issue in any Phase 2 pleadings regarding a list of issues for consideration, along with their recommendations on how and when this issue should be considered.

13. Each respondent utility shall submit information in Phase 2 on the effect of adding hospitals of less than 100 beds to the list of essential customers excluded from mandatory curtailments. The information shall include the effect on the number of circuits and megawatts that are available for rotating outage by excluding all hospitals from rotating outage compared to excluding only hospitals with 100 beds or more. The study regarding the reconfiguration of circuits to narrow exempted load shall include an assessment of isolating hospitals of less than 100 beds.

14. Each respondent utility shall report no later than in Phase 2 on the effect of including skilled nursing facilities to the list of essential customers excluded from rotating outages. The report shall state the number of affected circuits, estimated megawatts removed from rotating outage, an estimate of the effect on mandatory curtailments, and an estimate of the effect on retaining 40% of total system load available for rotating outage. The report shall also assess the reasonableness of reconfiguring circuits to narrow exempted load by isolating skilled nursing facilities.

15. Each respondent utility shall update and file its annual rotating outage action plan to include the orders herein within 45 days of the date this order is served.

16. Each respondent utility shall establish a memorandum account consistent with the orders herein. The memorandum account shall track all dollars spent above funds authorized in current rates to implement any program, activity, study, or report ordered herein. The accounting shall separately identify the cost and revenue associated with each program, activity, study or report (e.g., separately track costs and revenues for the new Base Interruptible Program, Voluntary Demand Response Program, each curtailment study, each report). Each respondent utility may include interest on the balance. The burden to demonstrate reasonableness for future cost recovery shall be on each respondent utility. Each respondent utility shall implement the orders herein without delay consistent with its public utility obligations and responsibilities.

17. The following limits shall apply to program implementation by respondent utilities:

INTERRUPTIBLE PROGRAM

AND CURTAILMENT PRIORTY LIMITS

THROUGH DECEMBER 31, 2002

The megawatt limits apply to the total megawatts that may be subscribed to interruptible programs at any one time through December 31, 2002 without further Commission authorization, including currently subscribed amounts. If a currently subscribed megawatt transfers from an existing program to a new program (e.g., by exercising an opt-out option), that megawatt shall not be counted twice against the program total. The dollar limits apply to the total dollars to be spent by each respondent utility on an annual basis for total interruptible program costs, and new costs implementing changes to curtailment priorities, without further authorization. These limits shall apply separately for January 1, 2001 through December 31, 2001, and January 1, 2002 through December 31, 2002. These dollars include amounts funded in current rates, and those recorded in the memorandum account of each respondent utility.

18. Applicant shall cite applicable authority for Commission action on an emergency basis in any application filed and served by a respondent utility for expedited Commission authorization to increase the megawatt or dollar program limit adopted herein.

19. This proceeding shall remain open for consideration of interruptible programs and curtailment priorities for Summer 2002, and any other issue or issues identified by the Commission, Assigned Commissioner and Presiding Officer, or Administrative Law Judge.

This order is effective today.

Dated April 3, 2001, at San Francisco, California.

LORETTA M. LYNCH

President

HENRY M. DUQUE

CARL W. WOOD

GEOFFREY F. BROWN

I will file a concurrence

/s/ HENRY M. DUQUE

Commissioner

ATTACHMENT A

CHANGES TO CURRENT INTERRUPTIBLE PROGRAMS,

NEW INTERRUPTIBLE PROGRAMS,

AND ROTATING OUTAGE PROGRAMS

R.00-10-002

1. CHANGES TO CURRENT INTERRUPTIBLE PROGRAMS

2. NEW INTERRUPTIBLE PROGRAMS

3. ROTATING OUTAGE PROGRAMS: EQUITY

4. ROTATING OUTAGE PROGRAMS: PROTECTIONS

(END OF ATTACHMENT A.)

ATTACHMENT B

DECISION NO. 91584: PRIORITY SYSTEM FOR ROTATING OUTAGES

1. Essential Customers - Normally Exempt from Rotating Outages.

2. Economic Damage Customers

As circumstances permit, individual warning of rotating outage plans would be given to large customers having demand of 300 kW or more, and to other customers upon their showing or need to show major economic damage or clear and imminent danger to personal health or safety, in order to qualify for this category. Individual timely warning could not be guaranteed either because of time, manpower, or communication limits, or because of daily circuit switching which could temporarily change a customer's outage block number.

3. All Other Customers

Customers not qualifying for higher priority. Warning and other relevant information would be informed by mass media, and no special treatment or individual notification would generally be given.

(END OF ATTACHMENT B.)

ATTACHMENT C

ADOPTED PRIORITY SYSTEM
FOR ROTATING OUTAGES

1. Essential Customers - Normally Exempt from Rotating Outages

2. Outage Notification

A. Life Support and Critical Care

C. All Other Customers

(END OF ATTACHMENT C.)

ATTACHMENT D

ADOPTED STUDIES AND REPORTS

1. STUDIES AND REPORTS: Each respondent utility shall file and serve the following studies and reports:

ITEM NO

STUDY OR REPORT

DATE DUE

1

Reconfiguring circuits to isolate essential from non-essential customers. Study will examine essential customers, including, but not limited to, rural hospitals and networks. Study will also look at alternatives (e.g., backup generation). (Decision Section 6.1.1.)

June 1, 2001

2

SCADA versus non-SCADA implementation of rotating outages. (Decision Section 6.1.5.)

June 1, 2001

3

Outbound calling program. (Decision Section 6.2.1.)

June 1, 2001

4

OSHA/OES/utility measures for industrial customers regarding employee or general public health and safety. (Decision Section 6.2.2.)

June 1, 2001

5

MUNI. (Decision Section 6.2.3.)

May 1, 2001

6

Existing and new methods and systems for more advance notification of rotating outages. (Decision Section 7.4.)

May 1, 2001

7

Monthly report on interruptible and outage programs. (Decision Section 8.2.)

First report due on

June 7, 2001

B. Item 7: Monthly reports shall be filed in this proceeding, and served on the Presiding Officer (two copies), Energy Division (three copies), the Administrative Law Judge (one copy), and any party who requests a copy.

2. COMMENTS, RESPONSES, PROTESTS: Parties may file and serve comments, responses or protests to a filed study or report, and shall file and serve such pleadings within 10 days of the date the study or report is filed and served. Similarly, if respondent utility files and serves an application or advice letter to implement any matter raised by such study or report, responses or protests shall be filed and served within 10 days of the date the application or advice letter is filed and served. The Assigned Commissioner and Presiding Officer, or the Administrative Law Judge, may change these dates by ruling.

3. UPDATE TO UTILITY ACTION PLANS

(END OF ATTACHMENT D.)

ATTACHMENT E

CXW/BWM/t94 3/27/2001

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Order Instituting Rulemaking into the operation of interruptible load programs offered by Pacific Gas and Electric Company, San Diego Gas & Electric Company, and Southern California Edison Company and the effect of these programs on energy prices, other demand responsiveness programs, and the reliability of the electric system.

Rulemaking 00-10-002

(Filed October 5, 2000)

PRESIDING OFFICER AND ASSIGNED COMMISSIONER RULING
REGARDING CUSTOMER RECLASSIFICATION BETWEEN

ESSENTIAL AND NON-ESSENTIAL CATEGORIES

FOR ROTATING OUTAGES

1. Summary

Essential and non-essential customers reclassified between June 1, 2000 and the date of notice shall be given individual written notice of the reclassification. The notice shall advise the customer that questions should first be discussed with the utility within 15 days of the date of the notice, and that unresolved disputes may be brought to the Commission by complaint. Notice shall be on the reclassified customer, not to all customers on the affected circuit.

Before implementing future reclassifications, utilities shall provide advance written notice to the customer. The reclassification shall not become effective sooner than 15 days after the date of the notice. The notice shall advise the customer that questions should first be discussed with the utility, and unresolved disputes may be brought to the Commission by complaint. Notice shall be on the reclassified customer, not to all customers on the affected circuit.

2. Priority System for Curtailment of Electricity and Annual Action Plans

In the 1970's, the Commission adopted a priority system for the curtailment of electricity during periods when demand exceeds supply. (Decision (D.) 86081 (July 7, 1976), 80 CPUC 157.) The adopted priority system, as modified by later orders, separately identifies essential customers from other customers. (D.91548 (April 15, 1980), 3 CPUC2d 510.)

Essential customers are normally exempt from rotating outages because they provide a service necessary for the public health, safety, or welfare. These include government agencies providing critical fire, police, prison, and national defense services; hospitals with 100 beds or more; and other specifically identified customers. (D.91548, 3 CPUC2d 510, 532-3.) Utilities file annual action plans regarding curtailment priorities that affect essential customers, including implementation of rotating outages. (D.91548, 3 CPUC2d 510, 523-525, 528 at ordering paragraph 4.)

3. Discussion

Utilities review customer classification as necessary, including as part of each annual action plan. Necessary customer reclassification based on updated or new information has always been important, but was of less consequence when the probability of rotating outages was small. The consequences of reclassification, however, can now be great, given the experience of rotating outages in 2000 and 2001, and the increased likelihood of rotating outages through the rest of 2001 and possibly beyond.

Pacific Gas & Electric Company (PG&E), Southern California Edison Company (SCE) and San Diego Gas & Electric Company (SDG&E) have reclassified many customers within the last year as part of ongoing reviews, and annual action plan updates. These reclassifications have included thousands of customers who share circuits with former essential or non-essential customers. Individual customer notice was not provided. Coverage in the news media and elsewhere, however, has resulted in both customer confusion, and questions regarding whether or not the reclassifications comply with Commission orders.

Each reclassified customer deserves the right to be notified of an important change affecting service. Each reclassified customer has the right to question an important change to ensure that the change complies with law, as well as Commission rules and orders. Each reclassified customer has the right to file a complaint if the customer believes the change is in error.

Notice must be on the reclassified customer. Notice need not be on every customer on a circuit affected by the reclassification. Wider notice is not required because circuits may be reclassified at any time for any number of operational reasons. That is, an essential customer might be transferred from one circuit to another due to operational factors, with resulting effects on all other customers on the two circuits. The only customer with standing to address the reclassification, however, is the customer whose status is reclassified between essential and non-essential, not each customer whose service changes as a consequence.

This matter must be addressed immediately because rotating outages have occurred, and may continue. As a result, I direct PG&E, SCE, and SDG&E to immediately implement the notification procedures described below.

The urgency of this matter requires that PG&E, SCE and SDG&E implement this ruling without delay. I will refer the matter to the full Commission for confirmation at the earliest reasonable opportunity. (Public Utilities Code Section 310.)

IT IS RULED that:

1. Pacific Gas & Electric Company (PG&E), Southern California Edison Company (SCE), and San Diego Gas & Electric Company (SDG&E) shall immediately notify each customer reclassified from either an essential to a non-essential category, or from a non-essential to an essential category, between June 1, 2000 and the date of the notice. The notification shall be served on each customer within 15 days of today, and shall alert the customer of the change. It shall provide an explanation of the priority system, describe how it is implemented by the utility, and include excerpts from relevant Commission decisions as necessary (e.g., Appendix B to D.91548.) It shall advise the customer that questions regarding the reclassification should first be discussed with the utility. It shall state that, absent written objection served on the utility within 15 days of the date of the notice, the reclassification shall be considered undisputed. The notice shall state that unresolved disputes may be brought to the Commission by customer-filed complaint, pursuant to Rules 9 through 13.2 of the Commission's Rules of Practice and Procedure, and such complaint must be filed with the Commission. The notice shall state that a complaint brought to the Commission must allege and show that the utility has acted or failed to act in violation of law, or in violation of any order or rule of the Commission, by the utility improperly implementing, or failing to follow, the Commission's adopted priority system. The burden shall be on the utility to defend its implementation and reclassification. The notice shall point out that the complaint will be filed and processed using the Commission's expedited complaint procedure. The notice shall only be served on the customer who is reclassified, not a customer whose service was or is changed because it shares a circuit with a reclassified customer. The utility is not required to automatically reverse the reclassification of any customer otherwise reclassified during the period from June 1, 2000 through the date of notice, but may reverse the reclassification if the customer presents sufficient evidence to convince the utility to do so. The utility shall, however, reverse the reclassification upon direction from the Commission staff or the Commission if the customer files a complaint and the complaint is resolved either informally or formally.

2. Effective immediately, PG&E, SCE and SDG&E shall provide advance written notice to a customer when the customer is scheduled to be reclassified from either an essential to a non-essential category, or from a non-essential to an essential category. The reclassification shall not become effective sooner than 15 days after the date of the notice. The notice shall contain all the information required in Ordering Paragraph 1. The notice need only be served on the customer who will be reclassified, not a customer whose service will change because it shares a circuit with a reclassified customer.

3. Within 3 days of today, PG&E, SCE and SDG&E shall each serve by mail and electronic mail on the Commission's Public Advisor a master draft of each notice described in Ordering Paragraphs 1 and 2. Service shall be performed on both Robert Ferraru and Norman Carter, with electronic mail service on rtf@cpuc.ca.gov and nhc@cpuc.ca.gov. Electronic mail service shall also be performed on the service list, with limited paper service as required by previous ruling (e.g., December 7, 2000). The Public Advisor shall provide comments on the drafts as soon as possible. Utilities shall incorporate all changes recommended by the Public Advisor.

Dated March 27, 2001, at San Francisco, California.

   

/s/ CARL WOOD

   

Carl Wood

Presiding Officer

Assigned Commissioner

(END OF ATTACHMENT E.)

ATTACHMENT F

CXW/BWM/eap 3/23/2001

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Order Instituting Rulemaking into the operation of interruptible load programs offered by Pacific Gas and Electric Company, San Diego Gas & Electric Company, and Southern California Edison Company and the effect of these programs on energy prices, other demand responsiveness programs, and the reliability of the electric system.

Rulemaking 00-10-002

(Filed October 5, 2000)

PRESIDING OFFICER AND ASSIGNED COMMISSIONER
RULING ON EMERGENCY MOTIONS

35 Changed from 50 percent by D.82-09-028.

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