ED/bsk/hkr Mailed 9/10/2001
Decision 01-09-014 September 6, 2001
BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA
In the Matter of the Application of SOUTHERN CALIFORNIA EDISON COMPANY (U 338-E) for Expedited Approval of Servicing Agreement between State of California Department of Water Resources and Southern California Edison Company Pursuant to Chapter 4 of the Statutes of 2001 (Assembly Bill 1 of the First 2000-2002 Extraordinary Session). |
Application 01-06-044 (Filed June 25, 2001) |
OPINION APPROVING SERVICING AGREEMENT BETWEEN
THE CALIFORNIA DEPARTMENT OF WATER RESOURCES
AND SOUTHERN CALIFORNIA EDISON COMPANY
Summary
In January of this year, in response to the energy crisis facing California, the Legislature gave the State of California Department of Water Resources (DWR) the authority to purchase electricity and sell it to retail customers of California electric utilities. This authority is provided in Assembly Bill 1 of the First Extraordinary Session of 2001-2002 (Stats. 2001, Ch. 4) (AB1X).
In January and March 2001, the Commission ordered Southern California Edison Company (SCE) to segregate, and hold in trust for the benefit of DWR, certain amounts its customers had paid for DWR's electricity. (Decision (D.) 01-01-061, D.01-03-081.) This arrangement now needs to be set out with more detail and specificity. The State Treasurer and the Administration have asked the Commission to approve the servicing agreements so the financial community can review those agreements as part of their evaluation of the bond transaction that is currently being undertaken by the Administration and the State Treasurer, so that they can understand DWR's financial situation.
Today we approve the servicing agreement between SCE and DWR, with certain changes. This agreement sets forth the terms and conditions under which SCE will provide transmission and distribution of DWR-purchased electricity, as well as billing, collection, and related services. In return, DWR will pay SCE's incremental costs. The provisions contained here establish reasonable formal payment arrangements and will help ensure that SCE and DWR can continue providing reliable electricity service to SCE's ratepayers.
Our approval of the servicing agreement is an essential step to the successful sale of the electricity bond issue being prepared by the State Treasurer and the Administration according to a letter dated July 2, 2001 to Commissioner Loretta Lynch from DWR, the California Department of Finance, and the State Treasurer's Office. (Attached as Appendix B.)
