II. Procedural Background

The Commission opened this rulemaking on April 27, 2003 to implement certain provisions of AB 117 (Chapter 838, September 24, 2002), which added Pub. Util. Code §§ 218.3, 331.1, 366.2, 381.1, and 394.25 and permits local governments the opportunity to aggregate energy procurement on behalf of the citizens and businesses in their communities.

AB 117 involves Commission-jurisdictional utilities by requiring them to continue to provide distribution, metering and billing services to the CCA's energy customers, among other things. AB 117 also directs the Commission to ensure that the utilities are able to recover certain costs, including those associated with energy contracts signed by the state's Department of Water Resources (DWR) and the costs of providing ongoing services to CCAs and their customers. This rulemaking stated our intent to implement fully the requirements of AB 117 that pertain to CCAs.

Following a prehearing conference on November 26, 2003, and with the agreement of all active parties, the Commission bifurcated the proceeding so that the Commission would first consider issues relating to certain utility costs that would be assumed by CCAs and later consider issues more concerned with transactions between CCAs, utilities, and energy customers. The Commission issued its first order, D.04-12-046, in December, 2004 resolving a variety of cost and rate issues. It subsequently held a second prehearing conference on March 30, 2005 and then evidentiary hearings in May 2005. Pacific Gas and Electric Company (PG&E), Southern California Edison Company (SCE), San Diego Gas and Electric Company (SDG&E) (together "Utilities") filed briefs jointly. The City and County of San Francisco (CCSF), the City of Moreno Valley, Community Environmental Council, the Local Government Commission, the County of Los Angeles and the City of Chula Vista (LA/CV) filed joint briefs and refer to themselves as "CCA Community and Supporters" (CCAs). Other parties that actively participated and filed briefs are the Office of Ratepayer Advocates (ORA), Community Environmental Council, Local Power, Toward Utility Rate Normalization (TURN), Energy Choice, Inc. (ECI).and the King's River Conservation District (KRCD). The California DWR consulted with the Commission on matters related to the delivery of "in-kind" power. Phase 2 of this proceeding was submitted on August 1, 2005 when reply briefs were filed.