II. Applicability of CRS for MDL Served Through "Stand-Alone" Transactions

CMUA seeks modification of D.03-08-076 as it relates to the applicability of CRS to new MDL served through a "stand-alone" or "direct" transaction. As defined by Pub. Util. Code § 369, a "stand-alone" or "direct" transaction is one where the use of transmission and distribution facilities owned by the Investor-Owned Utility' (IOU) is not required. In D.03-08-076, the Commission made a correction to D.03-07-028, Conclusion of Law (COL) 12. In its original form, D.03-07-028, Conclusion of Law 12, stated:


"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." (Emphasis added.)

In D.03-08-076, however, the Commission stated that "COL 12 contains a typographical error" and the "[r]eference to `CRS recovery' in COL 12 on page 76 should be changed to `CTC' recovery." Thus, D.03-08-076 revised COL 12 to read as follows:


"In accordance with Section 369, `new load' for purposes of CTC 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." (Emphasis added.)

CMUA believes that the Conclusion of Law 12, in its original form in D.03-07-028, excluding CRS in its entirety, was correct, and claims that the change made in D. 03-08-076, excluding only CTC, was in error. CMUA seeks to modify COL 12 to reverse the correction that was made in D.03-08-076, and to revert to the original language in D.03-07-028.

CMUA argues that the Commission's original text for COL 12 in D.03-07-028 was consistent with the treatment of stand-alone situations in the other departing load context, Customer Generation Departing Load (CGDL). In D.03-04-030, with respect to CGDL, the Commission concludes as follows:


"[If] the load is being met through a direct transaction [that] does not otherwise require the use of transmission or distribution facilities owned by the utility, that load will not considered as departing, and will not be obligated to pay a CRS in accordance with Pub. Util. Code § 369."

In approving Customer Generation tariffs Resolution E-3831 (July 8, 2004), the Commission indicated that it was not just tail CTC from which stand-alone new load should be exempted, but stating:


PG&E in its [advice letter] states that the ordering paragraphs are silent on whether new or incremental load [in stand-alone customer generation situations] is exempt from all departing load charges or just CTC...PG&E's tariff language assumes the Commission's intent is to exempt from all DL charges, any new or incremental load served by an on-site or over-the-fence generator that can pass the `physical test.' PG&E's interpretation is correct...."

In view of the above-described factors, CMUA argues that it would be irrational and unlawfully discriminatory for the Commission to treat CGDL differently than MDL. CMUA thus requests that the Commission modify D.04-12-059 to renew its previous conclusion that new MDL in stand-alone situations is exempted from all elements of CRS.

PG&E and SCE oppose CMUA's requested modification, arguing that § 369 addresses responsibility for the CTC, not the DWR Bond or Power Charges. As such, they believe that the "stand-alone" language in § 369 provides an exemption only from the CTC, but not from the DWR Bond or Power Charges. PG&E and SCE argue that the "change" that CMUA refers to is merely a "typographical error" in D.03-07-028 that the Commission corrected on its own initiative in D.03-08-076.

We find no basis to reverse the correction that was made in D.03-08-076, as advocated by CMUA, replacing the term "CRS" with the term "CTC" as referenced in D.03-07-028, COL 12. This correction made by the Commission in D.03-08-076 was done so independently of any request from a party, but was necessary to properly reflect the limited applicability of § 369 to CTC. The statutory language in § 369 is expressly limited to CTC, and there is no statutory provision identified by CMUA that warrants extending it to cover other elements of the CRS.

CMUA cites to PG&E's Preliminary Statement BB, which excludes new MDL in stand-alone situations from the definition of DL. However, PG&E's Preliminary Statement BB (which is titled "Competition Transition Charge Responsibility for All Customers and CTC Procedure for Departing Loads") was written before the energy crisis and before issuance of D.03-07-028 and D.03-08-076. PG&E responds that the definition in its Preliminary Statement BB is therefore based on the § 369 definition of DL responsibility for the CTC.

Since issuance of D.03-07-028 and D.03-08-076, PG&E has filed an updated tariff - Schedule E-MDNL - which defines municipal new load as "new electric load that, on or after December 20, 1995, locates in PG&E's service territory as it existed on December 20, 1995, and is served by a Publicly Owned Utility." Schedule E-MDNL provides a "stand-alone" exemption from only the pre-energy crisis nonbypassable charges, not any of the post-energy crisis charges (i.e., DWR Bond Charge, DWR Power Charge, Regulatory Asset Charge). Therefore, applying CRS to new MDL in stand-alone situations is not inconsistent with the PG&E's updated tariffs.

In addition, CMUA argues that applying CRS to new MDL in stand-alone situations is inconsistent with the treatment in D.03-04-030 accorded to stand-alone CGDL which the Commission exempted from all CRS. We find no unlawful discrimination, however, in treating MDL differently from CGDL with respect to "stand-alone" transactions. The fact that we have permitted exceptions to the full CRS for certain CGDL customers is based on separate considerations that do not apply to MDL customers. In D.03-08-076, we previously determined that because MDL has different characteristics from CGDL, there is no unlawful discrimination in treating MDL differently with respect to CRS exceptions. Specifically, in this regard, we stated:


"Unlike with CGDL, there were no other statutes, except for AB 117, involving MDL and the legislative mandates involving the Commission's regulation over electric corporations or the provision of electricity service that required harmonizing. Thus, this is another reason why MDL is different from CGDL, and not similarly situated. Accordingly, there is no unlawful discrimination. (See Griffin v. Superior Court (2002) 96 Cal.App.4th 757, 775." (D.03-07-076 at page 31.)

In view of the distinctions between CG and MDL, as noted above, we conclude that there is no unlawful discrimination in treating these two load categories differently with respect to CRS exceptions permitted for "stand-alone" transactions. Accordingly, in view of these considerations, we decline to adopt the modification, as requested by CMUA, to exempt new MDL in stand-alone transactions from all elements of CRS.

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