X. Other Tariff Rates and Services

Utility tariffs must specify the nature and types of services to be provided to the CCAs. We discussed these in general in D.04-12-046 and also how the utilities should set fees for CCA services. Generally, we found that the fees should be based on incremental costs. We determined that the utilities could not impose a fee where it was already recovering related costs as part of its revenue requirement. In such cases, we invited the utilities to implement CCA fees as part of general rate cases and reduce overall revenue requirement accordingly so that they were not recovering costs twice.

We address the controversies regarding utility CCA tariffs mindful that the purpose of those tariffs is to govern the relationships between CCAs and utilities, not CCAs and their customers, consistent with our previous discussion.

The following addresses controversies between the parties on several issues. Attachment A summarizes the adopted treatment of each tariff provision.

1. Treatment of New Customers

CCAs propose that customers moving into the area be automatically enrolled as CCA customers and that CCAs not be subject to the costs of the utility generating an associated CCA Service Request or "CCASR." Utilities respond that they must generate the CCASR or else the customer would be automatically assigned to the utility as a bundled customer.

The utilities also object to what they believe is the CCAs' attempt to subvert statutory requirements to notify new CCA customers of the opportunity to opt out during the first 60 days without penalty.

We agree with the CCAs that new customers be automatically assigned to the CCA, which is consistent with AB 117's requirements that customers opt-out rather than opt-in. However, the utilities should be permitted to charge for the cost of each CCASR if they must generate one for a new customer.

Like the utilities, we interpret the statute to require notification to all customers - including those who initiate service after the CCA's initial cut over -- of their opportunity to opt-out of CCA service within 60 days of service without penalty. Consistent with our previous discussion of Commission jurisdiction, however, the statute requires the CCA to comply with the statute and does not provide either the Commission or the utilities with authority to enforce the statute. For that reason, the utility tariffs may not make this notification a condition of service.

2. Boundary Metering (Section O)

The utilities propose tariff language that requires the utility to install, maintain and calibrate metering devices. The CCAs propose to include tariff language that would permit their vendors to undertake these activities. Section 366.2(c) (18) gives this authority to the utilities. We therefore agree with the utilities that the CCAs' vendors should not be permitted to provide these services.

3. Customer Information

The utilities object to the CCAs' proposal for the utility to provide "all contact and energy usage data for all customers within the CCA's service territory" in advance of the CCA's mass enrollment process. The utilities believe the CCAs do not need this information because it might include information they do not need about customers who will ultimately opt-out of CCA service.

D.04-12-046 issued in Phase 1 of this proceeding directs the utilities to provide all relevant information to CCAs and prospective CCAs, consistent with Section 366.2(c) (9). In that order we stated "AB 117 is clear in its intent to require the utilities to provide CCAs all customer and usage data even before the CCA begins offering service." We have found that AB 117 does not permit the utilities to second guess a CCA's request for relevant information and we will not revisit the issue here. The utilities' tariffs, therefore, shall include a provision that permits CCAs to access all relevant customer information, consistent with D.04-12-046. Customer Switching Rules

The CCAs propose that a CCA customer that switches to utility bundled service should be committed to that service for one year rather than the three-year commitment required for ESP customers switching to bundled service. The utilities object to this proposal, believing it to be unlawful. They also object to the CCA proposal that distinguishes between customer sizes with regard to the amount of advance notification to the utility required of the customer. Customers with loads great than 200 kilowatt (kW) would have to give six months notice while smaller customers would need to provide only 30 days notice. The utilities state this distinction based on size is not applied to customers of ESPs and is therefore unlawful.

Section 366.2(c) (11) states that "customers that return to the electrical corporation for procurement services shall be subject to the same terms and conditions as are applicable to other returning direct access customers." This language clearly provides that CCA customers are to be treated like direct access (DA) customers when they switch between procurement providers. Currently, a DA customer must make a three-year commitment to the utility when it returns to bundled service and notice requirements for switches to the CCA are the same for customers of all sizes. The utilities are correct that their tariffs for CCAs must track these provisions.

4. The Utility-CCA Service Agreement

The utilities append a draft service agreement to their tariffs which would memorialize the understandings between the utility and the CCA prior to the CCA's initiating service. The proposed service agreement is comparable to the one we have adopted for ESPs and no party objects to it. We adopt it with the understanding that it is exemplary and may be tailored by the mutual agreement of the utility and the CCA to accommodate specific circumstances, as long as utility bundled customers would be no worse off as a result. The utilities included a draft service agreement as part of their open season proposal, which would be signed by the CCA and the utility before the CCA initiates service. Additionally, the utilities should modify their proposed Service Agreement to conform to the findings in this order and submit it with their proposed tariffs in compliance with this order

5. Call Center Fees

The utilities propose to charge CCAs "call center fees" when a CCA customer calls seeking information. The CCAs oppose these fees, believing the utilities are already reimbursed for such costs.

In Phase 1, we addressed the issue of call center costs and were not convinced that the utilities had demonstrated that the CCA program will increase call volumes. Moreover, the utilities are already reimbursed for call center operations. D.04-12-046 found that the "utilities should track and recover incremental call center costs by establishing an 800 number." In general, we found that costs already recovered in a utility's revenue requirement for an existing utility operation may not be the subject of CCA fees until the Commission has made revenue requirement adjustments in general rate cases. The utilities have not yet tracked CCA calls and it is therefore premature for establishment of an 800 number and associated charge. We decline to include call center fees at this time and restate our policy that the utilities should address this matter in general rate cases where the proceeds from individual rates to CCA customers offset revenue requirements allocated to other customers and thereby make the rate change revenue neutral.

6. Opt-Out Fees

The utilities propose opt-out fees that would be charged to recognize the costs of processing a customer's decision to remain with the utility as a bundled customer.

CCAs object to being charged for opt-out fees because the utility is effectively getting a new customer, a situation the CCA should not have to subsidize. CCSF proposes that PG&E's service include an option for customers to opt-out using the internet and to reduce costs by providing the option to use a post card instead of a letter.

Utilities respond that a post card process is unlikely to save costs. PG&E does not have a system for processing post cards and would have to create a website for option. It is willing to explore the internet option and revise its tariffs at a later date.

The Commission addressed the issue of whether CCAs should pay for opt-out processing. D.04-12-046 determined that this is a cost that would not be incurred were it not for the CCA's program. AB 117 requires therefore that the CCA pay for the activity. We believe our finding in that decision was correct and it should not be relitigated here. The utilities are therefore entitled to charge opt-out processing fees.

We will not require PG&E to revise its processing system to accommodate post cards because of the expense. We encourage PG&E to consider the use of the internet for opt-out notifications and revise its tariffs at a later date, as it suggests.

7. Customer Deposits, Partial Payments and Termination of Service

The parties were divided on the issue of how to deal with deposits, partial payments and termination of service. The utilities propose that CCAs not be allowed to return residential customers to bundled service for nonpayment and that customers' partial payments be allocated first to utility charges.

CCAs and TURN would prorate partial payments between CCA and utility services. TURN observes that the entities would then be in the same position with respect to collections and termination of service. TURN proposes a prorated allocation of deposits between the utility and the CCA as well so that CCA customers would not have the burden of providing two deposits, one for the CCA and the other for the utility.

The utilities oppose any allocation of partial payments to CCA services until all charges for utility disconnectable services have been paid. They argue the CCA/TURN proposal would promote disconnections by leaving utility disconnectable services unpaid. CCA services should not be considered disconnectable, consistent with existing Commission policy for ESPs.

We adopt the utilities' proposal that each entity collect its own deposits (although the CCA may collect the deposits using the utility's billing services). While this policy may require some customers to pay two deposits, we have consistently treated CCAs as stand-alone operations with ratemaking discretion. We adopt the utilities' proposal for partial payments as a reasonable way to protect customers from disconnections. Partial payments would be allocated first to disconnectable services and then on a prorated basis to other utility and CCA services. Finally, we agree with the utilities that CCAs may not return a CCA customer for nonpayment of CCA services. While the customer may choose to return to bundled service, it would be an unfair burden on bundled customers to relieve CCAs of the risk that some customers may not be creditworthy.

8. CCASR Processing (Section M.11)

The utilities propose a 15-day lead time to process a switch over from the utility to the CCA where there is no need for urgent action, such as following an opt-out notice or where the customer is moving and no longer requires electric service. The CCAs propose a shorter 3 day turn-around.

We agree with the utilities that it is reasonable to cut over a new CCA customers after the normal meter read day, which requires a 15 day lead time.

9. Changing Municipalities in the CCA Plan

In some cases, a CCA may wish to add or remove a municipality (that is, a city or county) from its service area. This could occur if a municipality decides to withdraw from participation in the CCA or where a city or county joins a CCA.

The utilities' proposed tariff includes a detailed description of how the CCA may add or remove a city or county. The CCAs object to this section, arguing that AB 117 does not require CCAs to go through elaborate procedures when a municipality joins or leaves a CCA.

The utilities are correct that the addition of or removal of a municipality from a CCA will affect utility operations, outstanding liabilities that would affect the CRS. For that reason, the utilities' tariffs should describe a process for recognizing the change in the CCA's membership and customer base. The utilities should modify their tariff proposal to conform to the findings we make in this order regarding CCA initiation of service, for example, the procedures for filing the implementation plan and the method for calculating the CRS. These portions of the tariff should not require procedures or information not required of the CCA when it first files its implementation plan or initiates service, consistent with this order.

10. Confirmation Letters (Section I.7)

The utilities propose to send prospective CCA customers a formal notification of the change in the customer's service to the CCA. The utilities propose to charge the CCA for this notice. Each customer notification would be billed to the CCA at a rate of $.40 per customer, and would be levied for each customer that did not opt-out of the CCA's service. The utilities believe this notice will reduce customer confusion and assure that the customer has intended to change service to the CCA. The CCAs object to this notification and being billed for it, observing that it could cost a city like San Francisco as much as $3 million.

During the period before the CCA's initial cut-over, customers will receive two notices of their opportunity to opt-out of CCA service. We find no compelling justification for the utility's additional notification with its associated cost, which could be substantial and provides no particular benefit to the CCA or its customers in light of other notice requirements. We reject this utility proposal.

11. Scheduling Coordinator Requirements (Section B.c.3)

The utilities propose tariff language that would require each CCA to identify its scheduling coordinator(s) to the ISO and, where the CCA fails to provide such information to the ISO, the utility would have discretion to return the CCA's customers to bundled service. The Utilities argue that if a CCA's scheduling coordinator significantly under-schedules a CCA's electric load, the California Independent System Operator (ISO) will need to schedule energy on behalf of the CCA. The ISO would charge the costs of this service to other market participants, including the Utilities' bundled service customers, by way of the "Unaccounted For Energy (UFE) charge." The Utilities state that the under-scheduling of energy has occurred on several occasions when ESPs have lost their scheduling coordinators, and believe that CCA under-scheduling would unlawfully shift costs from CCA customers to bundled service customers.

The CCAs state they are not ESPs and AB 117 does not anticipate such strict oversight of CCA operations.

Discussion. AB 117 does not require CCAs to identify their scheduling coordinators to the utilities and, as we have already discussed, utility tariffs govern the relationships between CCAs and utilities, not, in this case, CCAs and the ISO. The ISO is responsible for managing its relationship with each load serving entity's scheduling coordinator, including those of CCAs. In the event that a CCA's scheduling coordinator under-schedules energy, the ISO imposes tariffed charges on the scheduling coordinator, which then passes these costs to the load serving entities. Therefore, these fees are assumed by the CCA's customers, not bundled customers. If there is some likelihood that irresponsible scheduling coordinators create liabilities for the system, the ISO is the appropriate entity to address this problem through its tariffs. Indeed, as the utilities recognize, the ISO already requires load serving entities to provide information about scheduling coordinators. The utility tariffs should not include any language that addresses scheduling coordinators or the CCAs' relationships with the ISO.

12. Load Aggregation (Section B.8)

The utilities object to the CCAs' proposal to permit CCA customers to aggregate load without reference to existing utility tariff restrictions. It is unclear from the record how, if at all, unrestricted private aggregation by CCA customers might affect utility operations and be affected by existing tariffs. We presume CCA's are proposing to permit their own customers to aggregate load and that the utilities object on the basis that private aggregation (that is, "direct access") is prohibited for any customers except those already aggregating load. We will consider this issue at a future time if the CCAs or the utilities wish to clarify the matter. For the time being, we adopt the utilities' language on this topic, which permits private aggregation by CCA customers only to the extent its implementation does not conflict with utility tariffs.

13. Notice of Program Implementation

The utilities propose that the Commission set the "earliest possible date" for each individual CCA's service initiation. They also propose the first CCA provide them with six months advance notice in order to have time to affect the system changes necessary to implement the overall program.

The CCAs propose language that is more specific, requiring implementation no later than 30 days after the Commission's notice of receipt of the CCA's implementation plan, or the local government's adoption of a CCA implementation plan, or the Commission's stated "earliest possible implementation date" or a mutally-agreed upon date, whichever is later.

In proposing these differing conditions for program implementation dates, the utilities and the CCAs interpret Section 366.2(c)(8) differently. The utilities appear to believe the Commission's finding with regard to the CCA program's "earliest possible implementation date" means a date applicable to the initiation of service by each CCA. The CCAs appear to interpret that subsection as referring to the date the entire program could go into effect. The subsection states "The Commission shall designate the earliest possible effective date for implementation of a community choice aggregation program, taking into consideration the impact on any annual procurement plan of the electrical corporation that has been approved by the Commission." Because the statute is vague as to its meaning, we find the CCA and the utility interpretations are reasonable and apply the statute's provisions in the context of our overall program design.

Because we have declined to issue an order approving an implementation plan for each CCA or one that directs a utility to stop procuring power for a CCA, we apply Section 366.2(c) (8) by herein finding that the earliest possible implementation date for the CCA program was the effective date of the tariffs filed pursuant to D.04-12-046 in Phase 1 of this proceeding. The utilities shall immediately undertake to affect the system changes required to satisfy the tariffs without six months prior notice by a CCA. The earliest possible implementation date for a CCA's provision of service would be the date of the completion of all tariffed requirements or the date the CCA and the utility agree is reasonable. In no event may the utility delay the initiation of CCA service once the CCA has fulfilled tariffed requirements.

14. Electronic Data Interchange Testing (Section F.5.d)

The utilities propose to charge individual CCAs the cost of Electronic Data Interexchange (EDI) testing, which SCE estimates will take up to 100 hours. The CCAs object to paying for this testing process.

D.04-120-046 and AB 117 require that each CCA pay the costs of program implementation activities attributable specifically to that CCA. EDI testing is one such activity. The utility tariffs should therefore require each CCA to pay for EDI testing within reason.

15. Specialized Service Requests (Section E.1)

The utilities propose to charge hourly rates for specialized services, that is, those that are requested by an individual CCA and are not otherwise priced out in the tariffs. The CCAs would prohibit the utilities from charging for services that are not provided to other commodity service providers.

D.04-12-046 found that utilities should charge CCAs the incremental costs of providing services to them. The utilities tariff proposals to charge for specialized services appear consistent with this principle and we adopt them.

16. Metering Fees

PG&E proposes charging CCAs $9.28 per interval meter per month for "Meter Data Management Agent Meter Data Posting." CCAs object to the level of the fee, arguing that $6.13 of it is for software license point that PG&E does not need.

PG&E's witness clarified that the software license point is required and is an incremental cost the utilities will incur. The CCAs appear to have confused data processing requirements with physical metering requirements. We adopt the utilities' proposed metering fees.

17. Involuntary CCA Service Termination (Tariff Section T.1, T.2, T.3)

The utilities propose tariff provision that would permit the utilities to terminate a CCA's service to customers for a variety of reasons, among them, failure to comply with tariff requirements, failure to conform operations to the Implementation Plan, failure to comply with ISO requirements and in response to a Commission order "decertifying" the CCA. The CCAs propose removing all of this language, arguing the utilities should not have authority to determine when a CCA program should be terminated, especially since CCAs will be competitors of utilities.

Utility tariffs traditionally permit the utilities to deny service under certain explicit conditions. Those they would include in their CCA tariffs are far too vague and would provide the utilities with far too much discretion. For example, the utilities could conceivably terminate an entire CCA program for the CCA's failure to update a customer's records within 3 days or because of a miscommunication with the ISO. The termination of a CCA program could be extraordinarily expensive the utility, the CCA and customers, and create enormous customer confusion and ultimately litigation. For that reason and because CCAs are competitors as well as customers of the utilities, we will not permit the utilities broad discretion in this area. We will not permit the utilities to include any language in the tariffs that provides the utilities with discretion to terminate a CCA's service with the exception that the utility may terminate service in the event of a system emergency or where public health or safety is involved (Section T.3). Otherwise, the tariffs should specify that if the utility seeks to terminate service to the CCA it shall do so only following a Commission order directing the utility to terminate service. Utility requests to the Commission to terminate a CCA's service should specify the reasons for the requested termination, the impacts of the termination, and the expected impacts if the CCA's service is not terminated. We agree with the utilities that the costs of notice to customers of a lawful termination should be billed to the CCA (Section T.2)

18. Net Metering

CEC proposes the utility tariffs for CCA explicitly permit net metering for CCAs and their customers who install renewable energy. CEC proposes also that the details of this tariff offering be worked out at a later date, preferably between the CCAs and the utilities. The utilities object to CEC's proposal, arguing that it is vague and could be costly to other customers.

Net metering effectively requires the utility to pay the customer the utility's full retail price for power that is produced by the customer but sent into the utility grid. Currently, we permit net metering for certain renewable projects. We have recently addressed this issue in R.04-03-017, where we are developing policies for distributed generation in general and our Self-Generation Incentive Program (SGIP) in particular. We believe that proceeding is the appropriate venue for deciding issues relating to renewable project net metering and decline to make any decision here about whether CCAs and their customers would qualify for net metering. In that regard we would consider whether it is appropriate for utility bundled customers to pay for the high cost of net metered power produced by CCA customers.

19. Rate Ready Billing

PG&E proposes a "rate ready" billing service to the CCAs that would limit CCA rate structures to two tiers. PG&E's proposal for "rate ready" billing permits the CCA to send rate information to the utility, which in turn calculates the rate for each rate tier.

CCAs object to PG&E's proposal for rate ready billing because it would not provide the customer with accurate billing information unless the CCA offered a two-tiered rate. The CCAs believe this is unreasonable since the utilities offer a five-tiered rate structure. CCAs propose that PG&E's rate ready service include the option for CCAs to elect to have PG&E bill each of the CCA's rates, notwithstanding the number of tiers charged for the commodity portion of the bill. SDG&E and SCE offer a billing service that the CCAs do not oppose.

CCAs also object to PG&E's bundling this service and charging $.70 per bill per month, arguing that its proposal is contrary to D.04-12-046, which required unbundling for billing services.

D.04-12-046 required the utilities to unbundle billing services, finding that "a CCA should not be required to pay for a service that it may choose not to use." We agree with the CCAs that PG&E should develop a billing system that is unbundled. SCE and SDG&E have billing systems that accommodate this objective and there is no reason PG&E cannot do the same.

We also agree with the CCAs that its rate ready billing service should permit the CCA to provide complete information about CCA rates, which SDG&E and SCE already have in place. PG&E may charge the same rate as charged by SCE for this service. If PG&E can demonstrate in its general rate case that the amount is below incremental costs, we will consider increasing it. The costs of initial changes to the billing system should be included as part of the revenue requirement assumed by all ratepayers, consistent with D.04-12-046, since the cost would be incurred on behalf of all CCAs - and also ESPs - rather than on behalf of a single CCA.

20. Services Funded by Bundled Rates (Section B.2)

CCAs propose to include tariff language that would require the utilities to continue to provide CCA services supported by bundled rates "until such time that those funds and/or service obligations are transferred to a CCA or another agency by a competent jurisdiction." The utilities oppose this language as unnecessary and unclear as to its purpose.

The utilities under our jurisdiction must continue to provide tariffed services until the Commission finds to the contrary. There is no reason to include such language in the tariffs and we concur with the utilities that it should not be included in them.

21. California Alternative Rate for Energy (CARE) Discount

The Utilities believe that eligible CCA customers should receive CARE discounts as if they had remained on bundled service, and propose ratemaking for this policy should be implemented in future rate design proceedings. The Utilities also propose that CCA customers receiving a CARE discount be exempt form paying the CARE surcharge portion of the Public Purpose Program (PPP) charge in addition to the DWR Bond charge, as utility CARE customers are. The CARE discount would be applied to all billing elements but would be credited to every customer's distribution charges. SDG&E proposed the continuation of its separate CARE line-item, calculated as if the customer were a bundled service CARE customer.

The CCA parties do not object to the utility proposals.

Discussion. The CPUC has had a long standing commitment to support low income programs such as the CARE program. As such, we believe that it is good public policy that all of California's qualifying electric customers reap the benefits of this program by receiving the CARE discount. Thus, we order the Utilities to continue to provide CARE discounts to all qualifying CCA customers as the utilities propose. Thus, the discount would apply to all elements of a customer's bill, including the CCA portion, but the discount would be applied only to the distribution rate. Bundled customers would not be subsidizing CCA customers because all customers pay for the CARE discount through their distribution rates (or, in the case of SDG&E, a separate line item that applies to all customers). We adopt the utility proposals for ratemaking treatment of these proposals, whether as part of distribution rates for PG&E and SCE or as a separate line-item in SDG&E's case. We agree with the utilities that the discount should not be reflected in the CRS.

CCAs may design rates which provide additional discounts to low income customers, a ratemaking matter that would be at the discretion of the CCA.

22. "In-Kind" Power

D.04-12-046 issued in this proceeding expressed interest in the idea of a CCA assuming liability for DWR power contract obligations for which the CCAs would be paying for as part of the CRS. The benefit of such an assumption of liability would be the potential for cost-savings for CCAs. This issue came up again in this phase of the proceeding, although the practicalities of this concept appear to remain unresolved. The DWR has expressed concerns about the administrative and legal hurdles that may arise. We restate our policy here that if DWR and a CCA can make a reasonable arrangement to take DWR power that would otherwise be undeliverable, or in some other way minimize power contract liabilities, we encourage them to do so but will rely on the parties to work out such arrangements.

23. Bill Ready Billing

An alternative to rate ready billing is "bill ready" service, under which the CCA provides all relevant billing information for each customer.

The utilities offer "bill ready" services to ESPs although apparently none take the service from PG&E because PG&E manually processes the information, which is expensive.

The CCAs object to PG&E's alternative "bill ready" service because they believe the $2.15 per customer monthly charge is exorbitant, as much as 15% of the average customer's procurement bill. CCAs state that extrapolating from this number suggests PG&E would need to hire 88 additional full time staff to serve the City of San Francisco's billing needs.

We agree with the CCAs that PG&E should develop an automated billing system that permits "bill ready" services, which SDG&E and SCE already have in place. It is unreasonable to expect a party to spend $2.15 a month per customer for this service, considering that SDG&E charges $.22 cents per month for the same service and SCE charges $.44 cents per customer per month. Moreover, we directed PG&E to provide bill ready services to ESPs in D.97-10-087, more than 8 years ago. Although PG&E argues that we never directed it to provide "automated" services, PG&E may assume we required a service that was reasonably priced and using the most efficient technology.

We herein direct PG&E to develop an automated bill ready service for CCAs and ESPs within 12 months. PG&E may charge the same rate as charged by SCE for this service. If PG&E can demonstrate in its general rate case that the amount is below incremental costs, we will consider increasing it. The costs of initial changes to the billing system should be included as part of the revenue requirement assumed by all ratepayers, consistent with D.04-12-046, since the cost would be incurred on behalf of all CCAs - and also ESPs - rather than on behalf of a single CCA.