6.3 Residential TOU Rates

To implement the 130% of baseline exemption requirement for residential TOU rate schedules, SDG&E recommends that the Commission tier commodity rates only using the same tiered rates applied for the non-TOU residential rate schedules, while leaving the TOU "signals" embedded in the transmission and distribution portion of these residential rates (i.e., DR-TOU). This approach is essentially consistent with the residential TOU rate design adopted for PG&E's residential TOU rate schedules (Schedules E-7 and E-8) in D.01-05-064 (Appendix B, pp. 1-2). If the commodity rates are not tiered consistent with the non-TOU residential rate schedules, customers will have an incentive to switch rate schedules simply to avoid an increase, rather than because the schedule is more suitable to their needs. We agree with SDG&E that such perverse incentives must be avoided, and therefore approve this request.

6.4 Small Commercial Rate Design

SDG&E and ORA recommend designing small commercial non-TOU rates (i.e., Schedule A) by allocating 70% of the revenue increase to the summer season, and 30% to the winter season. This is consistent with the approach that we adopted for non-TOU commercial customers in D.01-05-064, and we therefore adopt it here.