VIII. Assignment of Proceeding
Carl Wood and Geoffrey Brown are the Assigned Commissioners and Thomas Pulsifer is the assigned Administrative Law Judge in this proceeding.
1. D.02-03-055 determined that as a condition of retaining the DA suspension date of September 21, 2001, a surcharge must be imposed on DA customers sufficient to make bundled customers economically indifferent between a DA suspension date of July 1 versus September 21, 2001.
2. By ALJ ruling dated March 29, 2002, the scope of this proceeding was expanded to consider cost responsibility surcharges for "Departing Load" in order to prevent cost shifting to bundled customers.
3. DWR began buying electricity on behalf of the retail end use customers in the service territories of the California utilities: for PG&E and SCE on January 17, 2001, and SDG&E on February 7, 2001.
4. AB 1X provides for DWR to collect revenues by applying charges to the electricity that it purchased on behalf of all retail end-use customers in the service territories of the three major utilities, as a direct obligation of these customers to DWR.
5. Consistent with AB 1X and AB 117, MDL customers that took bundled service on or after February 1, 2001 are responsible for paying a share of the DWR revenue requirements, including both previously incurred costs as well as an ongoing cost component.
6. AB 117, which was signed into law on September 24, 2002, added Section 366.2(d) in order to clarify legislative intent concerning the cost responsibility of each retail end-use customers who was a customer on or after February 1, 2001.
7. Customers who took utility bundled service on and after February 1, 2001 (including those that subsequently departed to municipal service) consumed power purchased by DWR, and thereby caused DWR to incur costs on their behalf.
8. It is reasonable to impose CRS on new municipal load that is formed in areas that previously comprised IOU service territory as it existed on February 1, 2001, in order to prevent cost shifting.
9. Even though new municipal load may be served with facilities installed in a previously undeveloped area, the new load may represent, at least in part, departing IOU customers that previously took bundled service as of February 1, 2001.
10. Even to the extent new municipal load includes individual customers that may not have had a prior service relationship with the IOU, they still represent load growth within the IOU service territory as it existed on February 1, 2001.
11. Even though individual customers moving into a previously undeveloped region of service territory may not have personally taken DWR power deliveries, the fact remains that DWR contracted for power supplies to serve load growth in the entire IOU service territory as it existed on February 1, 2001. Thus, there is a cause-and-effect relationship between DWR contracting and load growth subsequent to February 1, 2001.
12. Even though a municipality annexes a previously undeveloped region of the IOU service territory and installs its own facilities to serve municipal customers, the pre-existing cost responsibility obligation applicable to the IOU service territory does not terminate merely because ownership of the territory has changed hands.
13. Unless MDL customers, including those constituting new load as defined herein, bear a fair share of DWR costs, there will be cost shifting among customers in violation of the intent of AB 117.
14. Pursuant to AB 1X, the State of California has sold DWR Bonds to finance over time the undercollection of DWR costs incurred during 2001.
15. DWR Bond Charges were implemented for bundled customers pursuant to D.02-12-082, which modified D. 02-11-074, but applicability of Bond Charges for Departing Load has been deferred to this proceeding.
16. In order to avoid cost shifting pursuant to AB 117, MDL customers must bear a fair share of DWR Bond Charges.
17. Imposition on MDL customers of a "Shortfall Charge" (in lieu of a full Bond Charge) under the terms proposed in the original version of the Settlement Agreement of parties in the Customer Generation phase of this proceeding would not achieve bundled customer indifference.
18. In order to avoid cost shifting pursuant to AB 117, MDL customers must bear a fair share of the ongoing DWR power charges relating to above-market contractual commitments entered into by DWR.
19. The DA CRS methodological approach adopted in D.02-11-022 forms a reasonable basis for determining the per-kWh MDL component of DWR power charges.
20. Departing load customers in the Westside zone transferred from PG&E to the Turlock Irrigation District bear cost responsibility for DWR charges on the same basis as other MDL customers since they received DWR power subsequent to January 17, 2001, and the disposition of the customer transfer remained uncertain at the time DWR forecasts were prepared.
21. In D. 03-04-032, approving the transfer of facilities between PG&E and Turlock Irrigation District, the Commission conditioned approval on the requirement that departing load customers affected by the transfer remain responsible for cost responsibility charges pursuant to state law and subsequent Commission decision.
22. A provision for ongoing or "tail" CTC covering the cost categories defined in Section 367 is a necessary component of the MDL CRS in order to achieve bundled customer indifference.
23. A provision for recovery of the HPC from MDL customers as proposed by SCE reasonably holds MDL customers responsible for their share of the PROACT balance.
24. A reasonable beginning point for assigning MDL customers cost responsibility for the HPC is March 29, 2001, the date when notice was served by ALJ ruling that applicability of such costs to MDL customers was to be considered by the Commission.
25. The allocation of HPC requirements by customer group set forth in SCE's proposal and reproduced in Appendix A provides a reasonable method of assigning MDL cost responsibility.
1. It is consistent with the intent of D.02-03-055 to impose cost responsibility surcharges on Municipal Departing Load to the extent necessary to prevent cost shifting to bundled customers based on generally similar principles as apply to DA load as set forth in D.02-11-022.
2. The Commission has broad authority under general provisions of Public Utilities Code Section 701 to regulate public utilities and to "do all things...which are necessary and convenient in the exercise of such power and jurisdiction."
3. While the Commission does not have authority to regulate the rates, charges or service of municipalities or irrigation districts, authority does exist to adopt surcharges that apply to IOUs to recover DWR bond and power charges as mandated under AB 117.
4. The Commission has authority under AB 1X and AB 117 to impose CRS on Municipal Departing Load that took bundled utility service on or after February 1, 2001 to recover DWR-related costs.
5. Consistent with the Commission's broad authority to regulate, together with §§ 451 and 453 prohibiting discrimination, bundled customers may not be arbitrarily charged for obligations that rightfully are the responsibility of MDL customers.
6. Pursuant to AB 1X and §§ 701 and 366.2(d), as well as the provisions of D.02-02-051, the Commission has legal authority to apply DWR Bond Charges on Municipal Load Customers that departed from utility service after DWR began procuring power on behalf of retail utility customers.
7. Section 369 states that the obligation to pay CTC is not avoided by the formation of a publicly owned electrical corporation after December 20, 1995, or by annexation of any portion of an electrical corporation's service area.
8. Consistent with the imposition of an HPC to bundled and DA customers in previous Commission orders, it is appropriate an HPC to MDL customers in order to avoid cost shifting.
9. MDL for purposes of applying a CRS should be defined to include new municipal customer load to the extent such new load is added in areas that were part of the IOU service territory as it existed on February 1, 2001.
10. In accordance with Section 369, "new load" for purposes of CRS recovery excludes load being met through a direct transaction that does not otherwise require the use of transmission and distribution facilities owned by the IOU. Section 369, however, does not exempt new municipal load where the municipal agency is interconnected with and uses the IOU's transmission system.
11. The elements of cost responsibility as set forth in the order below should be applied to MDL customers in order to avoid cost shifting in accord with the Legislative's intent set forth in AB 117.
12. The issue of whether or to what extent to cap the MDL CRS should be deferred pending further developments with respect to the DA CRS cap and the quantification of the MDL CRS obligation.
13. This decision construes, applies, implements, and interprets the provisions of AB 1X (Chapter 4 of the Statutes of 2001-02 First Extraordinary Session). Therefore, Pub. Util. Code Section 1731(c) (applications for rehearing are due within 10 days after the date of issuance of the order or decision) and Pub. Util. Code Section 1768 (procedures applicable to judicial review) are applicable.
IT IS ORDERED that:
1. This order shall apply to Southern California Edison Company (SCE). Pacific Gas and Electric Company (PG&E), and San Diego Gas & Electric Company (SDG&E).
2. A Municipal Departing Load Cost Responsibility Surcharge mechanism is hereby adopted applicable to designated customers that took bundled service on or after February 1, 2001 in the service territories of PG&E, SCE, and SDG&E and subsequently departed to be served by a "publicly owned utility " as defined by Section 9604(d).
3. The adopted MDL CRS shall be composed of the following elements:
a. DWR Bond Charge, applied on the same per-kWh basis as adopted for bundled customers pursuant to D.02-12-082, which modified D.02-11-074, applicable to MDL customers in the IOU service territory as it existed on February 1, 2001.
b. DWR Power Charge, applicable to MDL customers in the IOU service territory as it existed on February 1, 2001
c. Tail CTC covering the components specified in Section 367, applicable to MDL customers in the IOU service territory as of December 20, 1995.
d. HPC component (for SCE service territory only), as set forth in Appendix A of this order, applicable to MDL customers that departed the IOU service territory after March 29, 2002.
4. The DWR ongoing power charge shall be applicable for above-market DWR power costs incurred beginning September 21, 2001, and continuing until bundled customer indifference has been achieved.
5. MDL customers subject to CRS shall include those consisting of new municipal load formed within areas comprising the IOU service territory as it existed on February 1, 2001.
6. The MDL CRS shall be subject to updating and true up in accordance with the processes and procedures as adopted for updating the DA CRS in D.02-11-022 or applicable successor decision.
7. The per-kWh DWR Bond Charge component of the MDL CRS shall be calculated and implemented in a manner consistent with the Bond Charges for bundled customers implemented by advice letters filed pursuant to D.02-12-082.
8. The Bond Charge shall take effect for MDL customers only after this decision becomes final and inappealable pursuant to Section 4.3. of the Rate Agreement.
9. The DWR Power Charge component of the MDL CRS shall be determined in accordance with the DA-in/out methodology adopted for DA customers in D.02-11-022.
10. Interest charges shall accrue on the unpaid balance due under the DWR Power Charge component of the MDL CRS for the period September 21, 2001 through the effective date that surcharges take effect pursuant to this order, and continuing until bundled customers have been fully reimbursed for all applicable charges of principal plus interest due from MDL customers.
11. The interest rate shall be used for computing interest accruals due from MDL customers to bundled customers shall correspond to the same interest rate applied for DA interest accruals.
12. The ALJ shall issue a procedural ruling initiating further actions necessary to integrate MDL into the DA CRS modeling process and to implement the tariff filing, billing, collection, and accounting for the MDL CRS.
13. The determination of whether or to what extent the MDL CRS should be subject to a cap is deferred for a separate order pending further record development.
This order is effective today.
Dated _____________________, at San Francisco, California.
APPENDIX A
Derivation of HPC Applicable to MDL Customers
That Previously Took SCE Bundled Service
Rate Group |
2001 Forecast GWh |
TRA Allocator |
PROACT Rev. Req. ($M2) |
Allocated PROACT Revenue ($M2) |
HPC Rate for DL (c/k Wh) |
Domestic |
24,456.2 |
30.04% |
$582.1 |
2.380 | |
GS-1 |
4,166.0 |
5.19% |
100.5 |
2.412 | |
TC-1 |
173.9 |
0.25% |
4.8 |
2.740 | |
GS-2 |
21,996.3 |
29.64% |
574.5 |
2.612 | |
TOU-GS |
523.9 |
0.68% |
13.1 |
2.509 | |
LSMP |
26,860.0 |
35.75% |
692.9 |
2.580 | |
TOU-8-Sec |
8,955.8 |
11.91% |
230.8 |
2.577 | |
TOU-8-Pri |
6,997.8 |
8.73 |
169.2 |
2.418 | |
TOU-8-Sub |
7,931.9 |
9.45% |
183.1 |
2.308 | |
Large Power |
23,885.5 |
30.09% |
583.2 |
2.441 | |
PA-1 |
621.7 |
0.64% |
12.4 |
2.001 | |
PA-2 |
592.4 |
0.65% |
12.6 |
2.123 | |
AG-TOU |
884.9 |
1.16% |
22.5 |
3.542 | |
TOU-PA-5 |
718.0 |
0.87% |
16.9 |
2.359 | |
Ag. & Pump |
2,817.0 |
3.33% |
64.4 |
2.288 | |
Street Lights |
561.3 |
0.79% |
15.4 |
2.738 | |
System |
78,580.0 |
100.0% |
$1,937.9 |
$1,937.9 |
2.466 |
(END OF APPENDIX A)
