IV. All Party Settlement

We previously set forth a standard to be applied in reviewing all-party settlements.¹ As a precondition to our approval of such an agreement we must be satisfied that the proposed settlement commands:

1. The unanimous sponsorship of all active parties to the instant proceeding,

2. That the sponsoring parties are fairly reflective of the affected interests,

3. That no term of the settlement contravenes statutory provisions or prior Commission decisions, and

4. That the settlement conveys to the Commission sufficient information to permit us to discharge our future regulatory obligations with respect to the parties and their interests.

1. Unanimous Sponsorship

All parties that filed an appearance at the PHC signed the agreement. Those parties were SDG&E, FEA, Farm Bureau, WMA, and ORA. No additional appearances were received at the evidentiary hearing. Hence, unanimous sponsorship of the active parties of record to the instant proceeding has been satisfied.

2. Affected Interest

The next precondition requires that the sponsoring parties must be reflective of the affected interests. In this case, there are five active parties with diverse interest. SDG&E represents the service provider. FEA represents federal agencies that consume substantial quantities of electricity and use the transmission and distribution system of SDG&E. Farm Bureau represents over 80% of California's commercial agriculture. WMA represents over 1,500 manufactured housing communities that contain 160,000 homes. Finally, ORA represents the interest of all energy users. Clearly, the small commercial, commercial and industrial, and agricultural customers that will be affected by the agreement are fairly represented by the sponsoring parties.

3. No Term Contravenes Statutory Provisions

The parties represent that the agreement complies with all statues and prior Commission decisions. Further, we find no proposed modification of Commission policy or formulation of unannounced policy within the agreement that would produce a result inconsistent with prior Commission decisions. The agreement satisfies the requirement that no term of the settlement contravenes statutory provisions or prior Commission decisions.

4. Sufficient Information

This leaves us to address the final condition, whether sufficient information exists to permit us to discharge our future regulatory obligations with respect to the parties and their interests. In that regard, the Commission settlement rules set forth a standard for making such an assessment.

Rule 51.1(e) states in pertinent part that the Commission will not approve a settlement unless the "settlement is reasonable in light of the whole record, consistent with law, and in the public interest." We review the record with that criterion in mind.

Testimony from the individual parties disclosed a diverse position on SDG&E's application. For example, FEA took issue with SDG&E's proposal to change the structure and design of Schedule A6-TOU and AL-TOU, and opposed SDG&E's proposal to close Schedule A6-TOU to new businesses. The Farm Bureau took issue with SDG&E's attempt to alter the proportion of variable versus fixed charges in a RWD proceeding. WMA focused on the master-meter differential ("space discount") contained in SDG&E's Schedule DT. WMA proposed to update the existing per/unit discount and delineate which cost categories are included in the master-meter differential. ORA opposed SDG&E's proposals to increase non-residential basic service fees and demand charges; increase standby charges on Schedule S; cancel Schedule A-V1; and add new tariff language concerning the obligations of customers who choose to interconnect generating units to SDG&E's system.

Regardless of those diverse concerns, the parties used their collective experience to enter into an agreement that results in minor changes to SDG&E's rate design for its small commercial, commercial and industrial, and agricultural customers. A copy of that agreement, which incorporates the initial position of each party, is attached as Appendix A.

For example, WMA dropped its objection to the status quo mobile home park sub-metering charges while SDG&E agreed to establish a consistent basis for calculating mobile home park discounts.² SDG&E dropped its proposal to increase basic service fees for agricultural, commercial, and industrial customers, except at the transmission level.³ Although not an initial RDW recommendation of SDG&E, all parties concurred that a 7.5% rate cap should be established so that no individual customer would see a bill increase over that rate cap due to the agreement.⁴ This rate cap was proposed because the parties recognize that SDG&E's shift from usage charges toward demand charges may result in higher bills for some customers. Parties also agreed to consolidate tariffs and change specific tariff language for consistency and clarification purposes.⁵ As an example, the parties agree that Schedule A-V1 should be consolidated into other schedules and the parties seek a 60-day period to smoothly transition customers off Schedule A-V1.⁶

We considered modifying language in the agreement that precludes any legal action from being brought against individual parties related to the agreement.⁷ In that regard, the settling parties' representative clarified that that language in no way intends to have the Commission assume any liability of the settling parties. With that clarification, we find no need to change the language.

We also considered modifying language that provides parties the right to seek Commission modification "any time" after the Commission issues a decision adopting the agreement.⁸ Again, the settling parties' representative clarified that the intent of that language is only to provide parties an opportunity to file a petition for modification if a final decision on this matter differs from the agreement entered into by the parties. The representative emphasized and all settling parties affirmed, that that language is not intended to provide parties an opportunity to seek modification of a decision that may adopt the agreement in its entirety. With that understanding we forego any modification of the agreement on this issue.

¹ 46 CPUC 2d 538 at 550-551. ² See Item A.3 of the Agreement, page 3 of 13. ³ See Item C of the Agreement, page 4 of 13. ⁴ See Item C.11 of the Agreement, pages 8 and 9 of 13. ⁵ See Item D of the Agreement, pages 9 and 10 of 13. ⁶ See Item C.4 of the Agreement, pages 5 and 6 of 13. ⁷ See the Agreement, first paragraph on page 11 of 13. ⁸ See the Agreement, page 12 of 13.