Factual Background
The District is an operator of a generating plant, known as the "Spadra Project," that burns methane gas that is produced at its landfill in Pomona, California. In June 1986, District and Edison entered into a Power Purchase Contract, whereby the District agreed to sell and Edison agreed to purchase electricity produced by the Spadra Project. To deliver the electricity to Edison, District had to pay for the design, construction, and maintenance of a substation. District and Edison entered into an Interconnection Facilities Agreement (Facilities Agreement), dated December 1988, regarding the construction of the substation. This Facilities Agreement called for the placement of a 12 kilovolt (kV) revenue meter on the District side of the substation. Since 1991, when the Spadra Project began operation, Edison has applied a loss factor adjustment to the metered quantities of purchased electricity from District, and has paid District at an amount consistent with a 66kV interconnection.
Separate and distinct from the Power Purchase Contract which governs District's sale of electricity to Edison, District entered into an Application and Contract for Electric Service (Contract), dated December 1989, for the purchase of standby electricity from Edison when District's facility was not generating electricity. This Contract specifies that service to the Spadra Project would be provided under Schedule TOU-8 and would be at a service voltage of 12kV. Edison made its applicable prices and rules under Schedule TOU-8 available to District before the Contract was signed. Schedule TOU-8 specifies that the customer is billed at the service voltage that exists where the meter is located, which in this case was on the District, or 12kV side, and the price for 12kV service is higher than for 66kV service. Edison provided service and billed District at the requested 12kV service voltage.
At the time District selected 12kV metering for the electricity it purchased from Edison, compensated metering1 was not available. In May 1990, compensated metering became available under Special Condition No. 16 of Schedule TOU-8 and Edison notified District of the availability of this metering option by way of Advice Letter (AL) No. 864. Edison also periodically sent updated ratebooks to District since District is on Edison's list of ratebook holders.
District did not request installation of the compensated metering device until 1999, and District now has compensated metering, at a cost of under $3,000, which saves it approximately $6,000 per month on its standby electricity purchased from Edison.
1 Compensated metering allows for an adjustment for transformer losses so that the customer pays for electricity received at the 66kV level, which is less expensive than electricity measured at the 12kV level.
