Word Document PDF Document

STATE OF CALIFORNIA ARNOLD SCHWARZENEGGER, Governor

PUBLIC UTILITIES COMMISSION

505 VAN NESS AVENUE

SAN FRANCISCO, CA 94102-3298

November 5, 2004 Agenda ID #4038

TO: PARTIES OF RECORD IN RULEMAKING 02-01-011

RE: NOTICE OF AVAILABILITY OF PROPOSED ALTERNATE DECISION OF PRESIDENT PEEVEY ON OPINION REGARDING MUNICIPAL DEPARTING LOAD REHEARING AND RELATED ISSUES

Consistent with Rule 2.3(b) of the Commission's Rules of Practice and Procedure, I am issuing this Notice of Availability of the above-referenced proposed alternate decision. The proposed alternate decision was issued by President Michael R. Peevey to Administrative Law Judge (ALJ) Thomas Pulsifer previously sent to you. An Internet link to this document was sent via e-mail to all the parties on the service list who provided an e-mail address to the Commission. An electronic copy of this document can be viewed and downloaded at the Commission's Website ( www.cpuc.ca.gov).

Any recipient of this Notice of Availability who is not receiving service by electronic mail in this proceeding or who is unable to access the link to the Commission's web site given above may request a paper copy of the above documents from the Commission's Central Files Office, at (415) 703-2045; e-mail cen@cpuc.ca.gov.

This proposed alternate decision will appear on the Commission's November 19, 2004 agenda. This matter was categorized as ratesetting and is subject to Pub. Util. Code § 1701.3(c). Pursuant to Resolution ALJ-180, a Ratesetting Deliberative Meeting to consider this matter may be held upon the request of any Commissioner. If that occurs, the Commission will prepare and mail an agenda for the Ratesetting Deliberative Meeting 10 days before hand, and will advise the parties of this fact, and of the related ex parte communications prohibition period.

When the Commission acts on the proposed decision, it may adopt all or part of it as written, amend or modify it, or set it aside and prepare its own decision. Only when the Commission acts does the decision become binding on the parties.

Parties to the proceeding may file comments on the alternate decision no later than November 12, 2004, and reply comments no later than November 16, 2004 as provided in Article 19 of the Commission's "Rules of Practice and Procedure." These rules are accessible on the Commission's website at http://www.cpuc.ca.gov. Pursuant to Rule 77.3 opening comments shall not exceed 15 pages. An original and four copies of the comments with a certificate of servie shall be filed with the Commission's Docket Office and copies shall be served on all parties on the same day of filing. Anyone filing comments shall electronically serve those on the service list who have provided electronic addresses. Parties shall also ensure that they electronically serve their comments to President Peevey's energy advisor, Julie Fitch, at JF2@cpuc.ca.gov and the assigned ALJ Thomas Pulsifer at TRP@cpuc.ca.gov. For those who have not provided electronic addresses, printed copies of the comments shall be served by first class mail or other expeditious mode of delivery. The current service list for this proceeding is available on the Commission's Web page, www.cpuc.ca.gov.

/s/ Angela K. Minkin

Angela K. Minkin, Chief

Administrative Law Judge

ANG:acb

Attachment

COM/MP1/JF2/acb ALTERNATE DRAFT Agenda ID #4038

(Mailed 11/5/2004)

    Order Instituting Rulemaking Regarding the Implementation of the Suspension of Direct Access Pursuant to Assembly Bill 1X and Decision 01-09-060.

    Rulemaking 02-01-011

    (Filed January 9, 2002)

TABLE OF CONTENTS

OPINION REGARDING MUNICIPAL DEPARTING LOAD REHEARING AND RELATED ISSUES 2

I. Introduction 2

II. Procedural Background 5

III. Positions of Parties Concerning New Load CRS Allocation Exception 6

IV. Resolution of Limited Rehearing Issues Granted in D.03-08-076 9

V. Resolution of CMUA Petition for Modification 15

PG&E-Proposed Method of Computing Amount of Any CRS Exemption: 23

VI. Determination of List of MDL Entities Eligible for Applying for Any CRS Exemption 37

VII. Rehearing and Judicial Review 47

VIII. Comments on Proposed Alternate Decision 48

IX. Assignment of Proceeding 48

Findings of Fact 48

Conclusions of Law 51

ORDER 52

Attachment A - List of Appearances

Appendix 1 - Summary of Bypass Forecasts for Irrigation Districts
and Municipalization Included in PG&E's Bypass Report

Appendix 2 - PG&E's Estimated Lost Customers and Sales Due to Customer Bypass to Irrigation Districts

Appendix 3 - PG&E's Estimated Lost Customers and Sales Due to Customer Bypass to Municipalization

OPINION REGARDING MUNICIPAL DEPARTING LOAD
REHEARING AND RELATED ISSUES

I. Introduction

This order addresses the limited rehearing ordered by Decision (D.) 03-08-076 (The Rehearing Decision), and related matters, as described below. The rehearing addresses a limited issue decided in D.03-07-028 (the Municipal Departing Load Decision or MDL Decision) which set forth the requirements for a Municipal Departing Load (MDL)1 "cost responsibility surcharge" (CRS) within the service territories of California's three major electric utilities: Southern California Edison Company (SCE), Pacific Gas and Electric Company (PG&E), and San Diego Gas & Electric Company (SDG&E). The CRS was assessed on MDL customers to provide recovery of a fair share of costs incurred by the California Department of Water Resources (DWR) pursuant to legislative directive, as set forth in Assembly Bill No. 1 from the First Extraordinary Session (AB 1X) and Assembly Bill No. 117 of the 2002 Regular Session (AB117). (See Stats. 2001, Ch. 4; States, 2002, Ch. 838.)

In the MDL Decision, although we imposed a CRS provision on MDL customers, we also granted a limited CRS exception to new municipal load attributable to publicly-owned utilities "formed and delivering electricity to retail end-use customers before February 1, 2001," which was defined as existing publicly-owned utilities. (D.03-07-028, p. p. 76 [Conclusion of Law 11] (slip op.).)2

For purposes of applying the CRS exception, "new load" was defined as load that had never been served by a California investor owned utility (IOU), but that was located in territory that had previously been IOU territory and had been annexed or otherwise expanded into by a publicly-owned utility.

The Rehearing Decision, issued in August 2003 stated, however, that, "the record for extending this [CRS exception] to existing publicly-owned utilities and not to newly formed ones appears to be inadequate on this allocation issue." Thus, a rehearing was granted "concerning whether, or to what extent, there is sufficient factual basis for a CRS allocation based on whether the publicly-owned utility was formed before or after February 1, 2001."

In this order, we also address a related issue that was left unresolved in the MDL Decision, having to do with the identification of the specific publicly- owned utilities that would be subject to any exceptions from the CRS. In this regard, the Municipal Departing Load Decision further states:


"It is not clear from the record exactly which existing publicly-owned utilities would be entitled to exceptions from the CRS from this decision. It is our intent that only those publicly-owned utilities with substantial operations in place as of February 1, 2001 gain such benefit. Conversely, if there are any publicly-owned utilities serving minimal numbers of customers (e.g., under 100) which would technically qualify for CRS exceptions, we would choose to close such loopholes because there is too much chance for disproportionate expansion by such entities, expansion which could not reasonably have been considered by DWR." (Id. at pp. 61-62.)


The MDL Decision anticipated further inquiry in this proceeding to clarify the definition of "existing publicly-owned utility" for these purposes." On July 23, 2004, the assigned ALJ solicited comments from the parties to develop applicable criteria for identifying publicly-owned utilities whose MDL departing load customers would qualify for exclusion from the CRS. The ruling anticipated the Commission would subsequently identify publicly-owned utilities whose customers qualify for the "new load" exception from the CRS.

We also address herein the California Municipal Utilities Association's (CMUA) related Petition for Modification of D.03-07-028 (The Municipal Departing Load Decision) filed on February 17, 2004, regarding the effects of certain new disclosures concerning the point in time that DWR received delivery of PG&E's load forecast.

Upon review of the record developed on rehearing issues, as addressed in parties' comments, we reach two major findings. First, in the case of PG&E, an explicit adjustment was made in its load forecast provided to DWR to recognize future bypass due to anticipated transfers of existing IOU load to irrigation districts and municipalities. We conclude that a corresponding CRS exclusion is warranted to recognize the effects of this MDL "transferred load" component, as discussed below. Second, we affirm the exception granted for "new load" of existing publicly-owned utilities (POUs), but make two changes. First, POUs must have been formed and serving at least 100 customers as of the date of this decision to qualify for an exception for new load. Second, "new load" exceptions are limited to 150 MW in the PG&E and SCE territories before the end of 2012.

1 As used in D.03-07-028 and in the instant order, the term "Municipal Departing Load" refers to departing load served by a "publicly-owned utility" as that term is defined in Pub. Util. Code § 9604(d).

2 On February 18, 2004, the California Supreme Court summarily denied the petitions for writs of review challenging the lawfulness of D.03-07-028 and D.03-08-076. (Modesto Irrigation District v. Public Utilities Commission, et al., Case Nos. S119310, S119365, S119368, S119376. The petitions included challenges to the Commission's authority to impose CRS on new MDL and sufficiency of the evidence to impose the CRS on such load.

Top Of PageNext PageGo To First Page