2. Background

Based on a legislative finding that SDG&E's customers are subject to severe economic hardship because of unprecedented bill volatility and extraordinarily high rate levels, Assembly Bill (AB) 265 added § 332.1 to the Public Utilities Code to mitigate the hardship. Governor Gray Davis signed the legislation into law on September 6, 2000. As an urgency statute, AB 265 took immediate effect.

Among other things, AB 265 establishes a ceiling of $.065 per kWh for the energy component of electric bills for SDG&E's residential, small commercial, and street lighting customers, retroactive to June 1, 2000 and continuing through December 31, 2002 at a minimum. (§ 332.1(b).) If certain conditions are met, the Commission may adjust this ceiling. (§ 332.1(d).) With respect to other classes of customers, AB 265 provides the following:

"The commission shall establish a program for large commercial, agricultural, and industrial customers who buy energy from the San Diego Gas and Electric Company, on a voluntary basis, at the election of the customer, to set the energy component of their bills at six and five-tenths cents ($.065) per kilowatt hour with a true-up after a year." (§ 332.1(f).)

The Commission issued Decision (D.) 00-09-040 on September 7, 2000 in order to implement AB 265. With respect to the voluntary rate stabilization program for large commercial, agricultural, and industrial customers, the Commission provided an opportunity for comments and reply comments before implementing the provision. SDG&E, California Farm Bureau Federation (CFBF), and Southern California Edison Company (Edison) filed comments on the voluntary program. Reply comments were filed by SDG&E, CFBF, and the Alliance for Retail Markets (ARM).

In its comments, SDG&E presented a comprehensive proposal for implementing § 332.1(f) consisting of 14 components. These include eligibility criteria, true-up provisions, and customer communications. SDG&E also proposed that accounting for the costs of the program be administered through a memorandum account. CFBF proposed a "simple, straightforward" structure providing for a rate ceiling of $.065 per kWh and a 12-month amortization of undercollected amounts. Edison offered "general principles" but did not propose a specific implementation plan. ARM supports SDG&E's program design.

This decision reviews the comments and reply comments and establishes the voluntary program as directed by § 332.1(f). We do not find that there are factual issues requiring hearings. The comments and reply comments constitute an adequate record on which to make this decision.