2. Objection to Scope of Phase 1
In testimony, at the hearings, and in its briefs, CFC has urged us to postpone implementation of conservation rates until the utilities provide cost allocation studies, to be reviewed in general rate cases, and cost information, which would illustrate how conservation rates are aligned with costs. CFC also requests that the utilities provide conservation rates for all customer classes prior to adoption of conservation rates. To address CFC's proposed delay in the adoption of conservation rates, we must consider the context in which CFC's proposal arises.
This OII consolidated pending conservation rate design applications and requested comments on both rate and non rate design conservation issues. The OII issued a preliminary scoping memo and noticed parties that the Commission would implement increasing block rates for residential customers and WRAMs by advice letter or subsequent decision after issuing a decision on the broad policy issues.
DRA proposed an alternate process. Settlement negotiations for trial conservation rate design programs were underway; DRA proposed that they continue and be the subject of a Phase 1 decision. A Phase 2 would include broader policy issues and be re-categorized as quasi-legislative. A Phase 3 would develop company-specific rates based on the policies adopted in Phase 2. No party opposed the request in responses to the OII and at the PHC. The Joint Consumers, which at that time included CFC, noted at the PHC that there might be difficulties in proceeding as DRA envisioned, but they had no other proposal.
The assigned Commissioner granted DRA's unopposed request to phase this proceeding in the final scoping memo. To address the rate-related conservation objectives identified in the OII in Phase 1, the assigned Commissioner ordered settlement agreements or motions proposing the settlement agreements to discuss specific issues.5 Phase 2 was set to address non-rate design conservation issues.6
In light of the above, CFC's request is untimely. The time to have proposed alternatives to the preliminary scoping memo and to DRA's phased proposal was in advance of issuance of the scoping memo, either in responses to the OII or at the PHC. Once the scoping memo issues, it governs the issues the proceeding or, in this case, this phase of the proceeding will consider. Cost allocation studies and cost information were not within the scope of this phase of the proceeding.7 We acknowledged the utilities had not proposed conservation rate designs for other than residential customers in the OII and did not require them to amend their applications to propose them.8 Thus, we will proceed with consideration of the conservation rate design settlement agreements before us and CFC's objections to them.
5 Specifically, he ordered them to discuss low-income programs and affordability, metered service, billing arrangements, how increasing block rate levels and the percentages between them were determined, ability of tier increases to promote conservation, revenue included in the WRAM, effective date of the conservation rate design proposal, and consumer education initiatives to implement the settlements, and monitoring programs to gauge their effectiveness.
6 The Phase 2 Scoping Memo, issued February 8, 2008, requires utilities to propose increasing block rates for non-residential customers in their next GRCs.
7 Nonetheless, the Suburban, Park, and CalWater conservation rate design settlement agreements, discussed infra, are revenue neutral. They generate the adopted revenue requirement and maintain the existing allocation of revenue for each customer class adopted in the utilities' most recent GRCs.
8 In the OII, we asked whether conservation rate designs for other than residential classes should be considered in this proceeding.
