Preliminary Scoping Memo

This rulemaking will be conducted in accordance with Article 2.5 of the Commission's Rules of Practice and Procedure. As required by Rule 6(c)(2), this order includes a preliminary scoping memo as set forth below.

The issues to be considered in this proceeding are:


(1) Should the Commission revise the energy utilities' current baseline programs for residential gas and electricity users in California?


(2) If so, what should be the new baseline criteria and levels?

Pursuant to Rule 6(c)(2), we preliminarily determine the category of this rulemaking proceeding to be ratesetting as the term is defined in Rule 5(c).

We anticipate that evidentiary hearings will be required. We intend to hold public participation hearings in various locations to gather input from the general public.

The timetable for this proceeding will be determined by the assigned Commissioner through his ruling on the scoping memo after receiving input from the parties at the prehearing conference. For purposes of meeting the scoping memo requirements and getting the proceeding underway as quickly as possible, we establish the following schedule:

May 24, 2001 Order Instituting Rulemaking

June, 2001 Prehearing conference; assigned Commissioner's Scoping Ruling

July, 2001 Evidentiary hearings

June, July, August, 2001 Public participation hearings

August, 2001 Presiding officer's proposed interim decision on issues of high customer impact

September, 2001 Comments and reply comments on proposed interim decision

September, 2001 Interim decision on Commission agenda

The assigned Commissioner through his ruling on the scoping memo and subsequent rulings, and the assigned Administrative Law Judge by ruling with the assigned Commissioner's concurrence, may adjust the timetable as necessary during the course of the proceeding. In no event do we anticipate this proceeding to require longer than 18 months to complete.

Following the prehearing conference, the assigned Commissioner will issue a ruling which determines the category, need for hearing, and schedule for this rulemaking, and designates the principal hearing officer (Rules 6(c)(2) and 6.3). The ruling, only as to category, may be appealed under the procedures in Rule 6.4.

IT IS ORDERED that:

1. A rulemaking is instituted on the Commission's own motion determine whether baseline allowances for residential usage of gas and electricity should be revised, and if so, to what new levels.

2. The issues to be considered are those set forth in the body of this order.

3. All Commission-regulated gas utilities and electric utilities are made respondents in this proceeding.

4. This rulemaking is preliminarily determined to be a ratesetting proceeding as that term is defined in the Commission's Rules of Practice and Procedure, Rule 5(c).

5. This proceeding is preliminarily determined to require evidentiary hearings.

6. The expected timetable for this proceeding is as set forth in the body of this order. The assigned Commissioner through his scoping memo and subsequent rulings, and the assigned Administrative Law Judge (ALJ) by ruling with the assigned Commissioner's concurrence, may adjust the timetable as necessary during the course of the proceeding, provided that we do not anticipate this proceeding to require longer than 18 months to complete.

7. The Executive Director shall cause copies of this order to be served on respondents to the proceeding, and on those on the service lists for the following dockets: A.00-11-038 et al; A.00-10-045 et al; R.94-04-031/I.94-04-032, and I.99-07-003.

8. After initial service of this order, a new service list for the proceeding shall be formed following procedures to be established by the assigned Commissioner or ALJ. The assigned Commissioner, and the assigned ALJ acting with the assigned Commissioner's concurrence, shall have ongoing oversight of the service list and may institute changes to the list or the procedures governing it as necessary.

This order is effective today.

Dated May 24, 2001, at San Francisco, California.

Attachment A

Page 1

Public Utilities Code, Section 739

739. (a) The commission shall designate a baseline quantity of gas and electricity which is necessary to supply a significant portion of the reasonable energy needs of the average residential customer. In estimating those quantities, the commission shall take into account differentials in energy needs between customers whose residential energy needs are currently supplied by electricity alone or by both electricity and gas. The commission shall develop a separate baseline quantity for all-electric residential customers. For these purposes, "all-electric residential customers" are residential customers having electrical service only or whose space heating is provided by electricity, or both. The commission shall also take into account differentials in energy use by climatic zone and season.

(b) (1) The commission shall establish a standard limited allowance which shall be in addition to the baseline quantity of gas and electricity for residential customers dependent on life-support equipment, including, but not limited to, emphysema and pulmonary patients. A residential customer dependent on life-support equipment shall be given a higher energy allocation than the average residential customer.

(2) "Life-support equipment" means that equipment which utilizes mechanical or artificial means to sustain, restore, or supplant a vital function, or mechanical equipment which is relied upon for mobility both within and outside of buildings. "Life-support equipment," as used in this subdivision, includes all of the following: all types of respirators, iron lungs, hemodialysis machines, suction machines, electric nerve stimulators, pressure pads and pumps, aerosol tents, electrostatic and ultrasonic nebulizers, compressors, IPPB machines, and motorized wheelchairs.

(3) The limited additional allowance shall also be made available to paraplegic and quadriplegic persons in consideration of the increased heating and cooling needs of those persons.

Attachment A

Page 2

Public Utilities Code, Section 739

(4) The limited additional allowance shall also be made available to multiple sclerosis patients in consideration of the increased heating and cooling needs of those persons.

(5) The limited additional allowance shall also be made available to scleroderma patients in consideration of the increased heating needs of those persons.

(6) The limited allowance shall also be made available to persons who are being treated for a life-threatening illness or have a compromised immune system, provided that a licensed physician and surgeon or a person licensed pursuant to the Osteopathic Initiative Act certifies in writing to the utility that the additional heating or cooling allowance, or both, made available pursuant to this subdivision is medically necessary to sustain the life of the person or prevent deterioration of the person's medical condition.

(c) (1) The commission shall require that every electrical and gas corporation file a schedule of rates and charges providing baseline rates. The baseline rates shall apply to the first or lowest block of an increasing block rate structure which shall be the baseline quantity. In establishing these rates, the commission shall avoid excessive rate increases for residential customers, and shall establish an appropriate gradual differential between the rates for the respective blocks of usage.

(2) In establishing residential electric and gas rates, including baseline rates, the commission shall assure that the rates are sufficient to enable the electrical corporation or gas corporation to recover a just and reasonable amount of revenue from residential customers as a class, while observing the principle that electricity and gas services are necessities, for which a low affordable rate is desirable and while observing the principle that conservation is desirable in order to maintain an affordable bill.

Attachment A

Page 3

Public Utilities Code, Section 739

(3) At least until December 31, 2003, the commission shall require that all charges for residential electric customers are volumetric, and shall prohibit any electrical corporation from imposing any charges on residential consumption that are independent of consumption, unless those charges are in place prior to the effective date of the act that added this paragraph.

(d) As used in this section:

(1) "Baseline quantity" means a quantity of electricity or gas for residential customers to be established by the commission based on from 50 to 60 percent of average residential consumption of these commodities, except that, for residential gas customers and for all-electric residential customers, the baseline quantity shall be established at from 60 to 70 percent of average residential consumption during the winter heating season. In establishing the baseline quantities, the commission shall take into account climatic and seasonal variations in consumption and the availability of gas service. The commission shall review and revise baseline quantities as average consumption patterns change in order to maintain these ratios.

(2) "Residential customer" means those customers receiving electrical or gas service pursuant to a domestic rate schedule and excludes industrial, commercial, and every other category of customer.

(e) Wholesale electrical or gas purchases, and the rates charged therefor, are exempt from this section.

(f) Nothing contained in this section shall be construed to prohibit experimentation with alternative gas or electrical rate schedules for the purpose of achieving energy conservation.

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