II. Affidavit Language and Format

A. Sections 1 and 2 of the Affidavit

Sections 1 and 2 of the Proposed Affidavit are not controversial, but merely set forth language concerning the customer's authority to execute the affidavit and personal knowledge of the facts contained in the affidavit.

B. Section 3 of the Affidavit

Section 3 of the proposed affidavit contains a sentence verifying that the customer entered into a DA service agreement with a certain Electric Service Provider (ESP) prior to the September 21, 2001 suspension date. Section 3 contains a second sentence verifying that the customer currently has a valid agreement for DA service in effect with either the same or a different ESP. All workshop participants agreed to this language, except as noted below.

1. Check-Box Requirement

After the workshop, PG&E recommended using a "check box" format for the affidavit instead of the "cross-out" format initially proposed. SDG&E supports PG&E's recommendation, arguing that the "check box" format is more understandable and easier for customers to complete. TURN does not contest PG&E's proposal to employ a "check box" format in Section 3 of the affidavit, but recommends that the line following the first check box in Section 3a be slightly revised to read as follows:

"Up to a maximum of ______________ kW/kWh of load."

We shall adopt PG&E's check-box revision, and incorporate the above-referenced wording suggested by TURN. This wording will capture the possibility that the customer's DA contract provides for "full requirements" service, but only up to a stated ceiling amount.

2. Disclosure of Contractual Volumes
in the Affidavit

In the version of the proposed affidavit in Attachment 3, the customer would not be required to disclose specific contractual volumes of load in its pre-suspension contract. AReM supports adoption of Attachment 3, arguing that the actual amount of DA load in the contract is not relevant, but that the key provision is the customer's attestation that it has not exceeded the contractual volume. TURN disagrees, however, arguing that Attachment 3 does not comply

with D.04-07-025, which required the customer to "provide verification of the contracted amount of DA load" (D.04-07-025, Appendix 1, Principle 3). TURN instead offers language in Attachment 4, whereby the customer would be required to include the specific contracted kW or kWh volume in the affidavit, or else state that its contractual load is determined on a "full requirements" basis.

TURN argues that only Attachment 4 provides the correct form of affidavit for purposes of implementing D.04-07-025, which required that the affidavit provide both (1) verification of the contracted amount of DA load and (2) attestation that they have not exceeded contractual limits.

PG&E and SDG&E express no specific position on requiring contractual volumes to be disclosed in the affidavits, but seek clarification from the Commission as to whether or to its intent was to require disclosure of the quantity of the customer's contracted load in the affidavit. SCE originally took no position on requiring contractual volumes to be set forth in the affidavits. Given the conflicting information regarding the number of "full requirements"⁴ contracts, however, as discussed below, SCE believes that TURN's proposed Section 3 may be appropriate.

More specifically, SCE expresses concerns about an apparent misstatement of fact made at a previous workshop on March 11, 2004, regarding DA Load Growth. At that workshop, one DA customer represented that all Electric Service Provider (ESP)/Customer contracts contained some indication of a maximum load amount. No other DA customer or ESP participant at the workshop disputed, denied, clarified or qualified this statement. SCE's previous endorsement of the DA Load Growth Principles adopted in D.04-07-025 was based on this representation. SCE also believes that reliance on this representation as fact helped lead to D.04-07-025, which essentially allows DA customers to increase their DA load up to the limit stated in their ESP/Customer contract.

At the October 13, 2004 Working Group Meeting to discuss implementation of the affidavit requirements set forth in D.04-07-025, however, all DA customers and ESPs present expressed the opposite view, indicating they were unaware of a single ESP/Customer contract that was not a "full requirements" contract. SCE argues that, as a result, there is essentially no limit on potential DA load growth on existing DA accounts in California. SCE believes that the Commission should determine how many "full requirements" ESP/Customer contracts currently are in effect, to assess whether D.04-07-025 and the DA Load Growth Principles need to be modified based on these subsequent factual revelations.

Other participants at the Rule 22 Meeting oppose required disclosure of a customer's contractual volume levels in the affidavit, claiming that the quantity terms of the ESP/Customer contracts constitute confidential and business proprietary information. AReM, in particular, argues that requiring such a statement of the customer's specific contracted volume in the affidavit is also unnecessary and impractical. AReM contends that the Commission already has the necessary rights to conduct investigatory and spot audits without the need for disclosure in the affidavit of specific contract volumes.

We shall adopt as Section 3 of the affidavit, the form set forth in Attachment 4, requiring the customer either to specify contractual volumes up to a specified maximum amount, or indicating that the contract is on a "full requirements" basis.

As noted by TURN, in D.04-07-025, we expressly required that the affidavit provide both verification of the contracted amount of DA load and attestation to compliance with the load limit for customers exceeding a designated minimum load per customer, as set forth in Principle 3 of Appendix 1 of D.04-07-025. Parties do not have authority to unilaterally decide to delete a requirement from the affidavit that was imposed by the Commission in D.04-07-025.

Moreover, as a practical matter, it is not clear to what extent there would be a specific volume amount to disclose in a given affidavit. As noted by SCE, the most recent indications from DA parties are that most DA contracts do not set forth specific contractual volumes but merely specify a "full requirements" provision. In such a case, the customer would merely attest in the affidavit that its contractual volumes are determined on a "full requirements" basis.

AReM has raised the concern that contractual volumes are commercially sensitive data and argues that such data should not have to be disclosed in the affidavit. Yet, D.04-07-025 has already determined that the contractual load data must be verified in the affidavit. Thus, the time has passed for objection to inclusion of this data in the affidavit. The remaining question is what measures may be appropriate to protect the confidentiality of commercially sensitive data relating to contractual volumes set forth in the affidavit.

AReM claims that disclosure of customer-ESP confidential information to any employees of the utilities will permit the utilities to gain insight into the confidential operations of their competitors, the ESPs who serve direct access customers on their respective systems. If the contractual amount is to be specified, AReM argues that the affidavit should be sent directly to the Commission, rather than the utilities.

We are unpersuaded by AReM's claims. We conclude that the protective safeguards already in place, together with the additional restrictions we adopt herein on utility employee access, sufficiently address legitimate concerns as to commercial sensitivity of data. As an initial observation, the utilities must already know how much power DA customers are currently using in order to bill them for transmission and distribution charges, and they also know who the customer's ESP is as a result of the DASR process.

In any event, the confidentiality issue only applies to the subset of ESP customers with over 500 MW of demand that have contracts with specific volume limits prescribed in the contract. As discussed above, for DA contracts that do not quantify specific contractual volumes, but rather are for "full requirements," there would be no specific volume amount disclosure.

In comments on the Draft Decision, the utilities note that they are already required to keep customer information confidential. D.90-12-121 requires that the utilities are not to release customer information to third parties without customer consent, or absent certain Commission-approved exceptions. The utilities likewise note that the ESP service agreement approved by the Commission already covers the protection of information marked as confidential and provided by an individual ESP to a utility. Moreover, the utilities argue that in any event, it is the customer, and not the ESP, that is filling out the affidavit form and providing information on contract limits. Therefore, the utilities oppose any requirement for a separate nondisclosure agreement with the ESP.

We agree that existing Commission directives already provide adequate protection against disclosure of confidential contract information to outside third parties. We recognize, however, that even though it is the customer that provides the affidavit information, the ESP still has an interest in maintaining the commercial sensitivity of confidential data in any contract in which it is a party. As the utilities point out, the ESP service agreement already provides for confidential protection of contract data with respect to outside third parties. Thus, there is no need for a separate agreement with the ESP with respect to disclosure to third parties. Yet, the concern expressed by AReM involves disclosure among employees within the utility, itself. AReM expresses concern that the utility could make use of the information for commercial advantage against the interests of the DA customer and its ESP. In order to address this concern, we shall require that access to any confidential volumetric data provided to the utility through the affidavit be restricted only to utility employees involved in checking affidavits for compliance with Commission requirements. We expressly prohibit the utility from disclosing any such volumetric data to other employees, including those involved in marketing activities.

Each utility shall designate those employees authorized to have access to confidential affidavit data, and shall restrict access accordingly. The list of designated utilities authorized to have access to confidential contract data shall be provided to each DA customer that provides such confidential contract data in its affidavit. These nondisclosure restrictions to limit access to volume data only to those employees responsible for checking affidavit compliance shall prohibit disclosure to employees in the marketing department.

We decline to adopt AReM's suggestion that Commission employees serve as the custodian for affidavit forms containing confidential information. We believe that the processing of affidavits can be administered more efficiently and appropriately by the utilities who are responsible for checking for compliance.

The Commission retains the option to conduct spot audits and investigatory inquiries, as deemed necessary, to assure that the attestation in the affidavit is true and correct. During such spot audits or investigatory inquiries, the Commission and its staff shall have the authority to obtain access to contractual volume data, consistent with the protections as set forth in Public Utilities Code Section 583.

C. Section 4 of the Affidavit

The Utilities' proposed language for Section 4 (set forth in Attachments 2 and 3 of the Report) would have the customer warrant that:

"its total level of DA load on all DA accounts does not exceed the contracted level of load defined by the Agreement that was in effect as of September 20, 2001,....."

At the end of the Workshop, all participants agreed to this language. Although the Utilities and TURN continue to support the original language, AReM now proposes further changes to Section 4. Subsequent to the Workshop, AReM notified the other participants that it favored a deletion of the reference to the phrase: "Agreement that was in effect as of September 20, 2001." AReM argues that since the DA suspension decision was issued on September 20, 2001, it is illogical for the affidavit to state that a contract executed before that date could have been "entered into" in accordance with the subsequent Commission decision.

AReM's proposed alternative language for Section 4 (set forth in Attachment 1 of Workshop Report) thus deletes reference to the September 20, 2001 date. The customer would only warrant that:

"its total DA load does not exceed contracted level of DA load defined by the terms of the customer's DA service contract entered into consistent with the Commission's DA suspension decisions."

The Utilities and TURN disagree with AReM's proposal to remove the reference to the September 20, 2001 date, arguing that to do so makes the affidavit less clear and poses greater difficulty for DA customers in checking all potentially relevant DA suspension decisions for compliance.

We shall adopt the Section 4 language as proposed by the Utilities and TURN, preserving the reference to the suspension date of September 20, 2001. In D.04-07-025 (at p. 37), the Commission specified that DA load and DA load growth are limited to those volumes under contract as of September 20, 2001. As stated therein, "we do not intend to prevent DA customers from increasing load on existing DA accounts so long as any such load increases do not exceed the volumes that were authorized under contractual arrangements executed on or before September 20, 2001. " (D.04-07-025 at 17.) Thus, it would be inconsistent with this intent to delete reference to the September 20, 2001 date in attesting to compliance under the affidavit process.

The Utilities' proposed language for Section 4 is sufficiently clear, and doesn't require the customer to review Commission decisions or ask the utility or ESP to explain the affidavit's intent. We do not believe that it is illogical to reference the date of September 20, 2001, in the Section 4 language, as argued by AReM. Such language merely means that the contract volumes are those in effect prior to the suspension date and that the contract is therefore valid under the DA suspension decisions. As noted by TURN, it is simpler and clearer for the DA customer to affirm verification of the September 20, 2001 contractual volumes directly than to have to research all of the many DA suspension decisions in order to confirm its compliance. September 20, 2001 is the key date upon which this Commission has consistently relied in its interpretation of the DA suspension provisions of Water Code Section 80110.

D. Section 5 of the Affidavit

In Section 5 of the proposed affidavit, the customer affirms the understanding that the Commission may conduct spot audits or other inquiries regarding the contractual volumes in the customer's contracts. The customer also states that it understands that the Utilities may be required to provide certain information to the Commission. The customer agrees to maintain its pre-suspension contract, to the extent it has not previously been inadvertently lost or destroyed.

At the conclusion of the Workshop, participants agreed, in principle, to the language of Section 5, as included in Attachments 3 and 4 of the Workshop Report. Parties disagree, however, over the precise wording of the final sentence of Section 5 of the affidavit. Attachments 3 and 4 of the proposed affidavit both contain the following final sentence in Section 5:

"Customer agrees to retain and make available, to the Commission, Customer's Agreement with ESP which was in effect as of September 20, 2001, as well as any subsequent DA agreements, to the extent not previously inadvertently lost or destroyed and currently not retrievable."

TURN suggests the following alternative wording:

"Customer agrees to retain, and make available to the Commission upon request, Customer's Agreement with ESP, which was in effect as of September 20, 2001, as well as any subsequent DA agreements, and to make a good faith effort to obtain a copy of the Agreement if such a copy is not currently in Customer's possession."

AReM proposes to amend the Section 5 language to delete specific reference to September 20, 2001 date in reference to contractual agreements because a customer may have executed subsequent DA contract(s), in accordance with the terms of the Commission's previous DA suspension decisions.

We shall adopt language for the last sentence of Section 5 in the form proposed in Attachments 3 and 4, as set forth in the Workshop Report. This language appropriately preserves references the September 20, 2001 date as the basis for contractual limits, while acknowledging that any subsequent DA agreements are also covered under the affidavit.

CLECA/CMTA propose a slight modification to paragraph 5 of the affidavit as presented in the Draft Decision to make clear that the customer must retain and make available to the Commission the relevant provisions of the customer agreement with the ESP concerning contractual volumes. We agree and incorporate this proposed modification. To that end, the third line in paragraph 5 of affidavit is modified to read as follows: "Customer agrees to retain and make available, to the Commission, the relevant provisions of Customer's Agreement with ESP concerning contractual volumes, which was in effect..." This change limits the retention requirements to the contractual volumes portion of the contract, and is consistent with the intent of the Commission that the purpose of the Commission's audit or inquiry is to deal with claims concerning contractual volumes.

The Commission's interest in these contracts is limited to the volumetric provisions that are subject of DA suspension rules, and not in the various commercial arrangements between customers and suppliers.

E. Section 6 of the Affidavit

In Section 6 of the proposed affidavit, the customer acknowledges that it must take such actions as necessary to comply with existing DA-related decisions and requirements. All participants agreed to the language of Section 6, as included in both Attachments 3 and 4 of the Workshop Report. We approve the proposed language in Section 6.