2. Procedural History
The instant applications by Pacific Gas and Electric Company (PG&E), Southern California Edison Company (SCE), and SDG&E were filed in response to the December 8, 2004 Ruling by Assigned Commissioner Peevey and Administrative Law Judge (ALJ) Cooke in Rulemaking (R.) 02-06-001. That Ruling stated:
We believe the time is now to consider adoption of a new default rate (or rates), tailored to customers with demand over 200 kW, that provides a critical peak price (CPP) signal distinct from the generic peak period. We direct PG&E, SCE, and SDG&E to file applications by January 20, 2005, for implementation by June 1, 2005, that propose new rate schedules for all customers over 200 kW that provide strong peak demand signals... The proposed tariffs should be designed to recover the total revenue, including transmission and distribution charges, currently allocated to customers 200 kW and larger and be class revenue neutral, compared to existing rates, based on current class load patterns. (Ruling pp. 2-3.)
As any party who has been following this proceeding or the electricity industry generally should be aware, there is substantial concern in the regulatory community that during the Summer of 2005 there may be insufficient generating capacity to meet system peak demand. The Commission has attacked this problem in various ways, increasing efforts in the areas of energy efficiency, demand response, and generation supply among others, especially in Southern California. Despite an improved outlook prepared in February 2005,1 the California Independent System Operator2 remains concerned about tight supplies in Southern California under hot weather conditions (1-in-10-year forecasts) and in Northern California because of lower than normal snow pack in the Pacific Northwest.
Seeking to add additional tools by which we could attack the problem of high peak demands, President Peevey and assigned ALJ Cooke issued the ruling, referenced above, in our rulemaking on policies and practices for advanced metering, demand response, and dynamic pricing. In directing the utilities to file applications for a new default rate with critical peak features, they sought to address some of the problems that we have experienced in that rulemaking, including a lack of enrollment by large customers in voluntary demand response programs, and limited performance by customers who have enrolled in certain programs. Because customers 200 kW and above are the only customers with metering and communications infrastructure in place to record and monitor the impacts of rates on peak load, they targeted the large customer classes, even though they recognized that these customers might not have significant amounts of discretionary load during peak periods and do not necessarily drive the summer peak.
On January 20, 2005, PG&E, SCE, and SDG&E filed their applications. Testimony by 17 parties followed on February 16, with rebuttal testimony on February 22. Evidentiary hearings took place on February 24 through March 1, 2005. The Assigned Commissioner issued his Scoping Memo on March 11, 2005. Opening briefs were submitted on March 14, reply briefs on March 21, and this proposed decision issued, for a shortened comment period, on March 28, 2005. This extremely expedited schedule was necessary and appropriate because of the need for the Commission to adopt a decision by April 21, 2005 if a new rate were to be in place by June 1, 2005 as called for in the December 8, 2004 Ruling. We affirm the ALJ's decision to shorten the comment period on the proposed decision in order to allow for a decision to be rendered in time to implement rates by June 1, 2005.
On March 8, 2005, the Silicon Valley Manufacturer's Group (SVMG) filed a motion to intervene. By this decision we grant the motion and affirm the admission of late-served testimony by SVMG on March 23, 2005. On March 14, 2005, the California Hospital Association and the California Society for Healthcare Engineering (collectively CHA/CSHE) filed a motion to intervene in order to file briefs. The motion is granted. Any other outstanding motions are denied.
Requests for Final Oral Argument was made by PG&E and the California League of Food Processors (CLFP) on March 14, 2005.
1 This report was referred to by several parties in testimony. It can be found at http://www.energy.ca.gov/electricity/2005_summer_forecast/2005-02-22_senate_presentation.pdf. 2 When referring to a position taken by the California Independent System Operator we refer to the organization as the CAISO. When referring to a procedure, rule, or process employed by the CAISO Operator we utilize the term ISO.
