2. Background

The Legislature enacted Assembly Bill (AB) 265 (Stats. 2000, Ch. 328) on August 30, 2000 in response to the "severe economic hardship because of unprecedented bill volatility and extraordinarily high rate levels" then being experienced by SDG&E's electric customers. (AB 265, Section 1 (a).) Governor Davis signed AB 265 on September 6, 2000. Among that bill's key provisions were a requirement that the Commission establish an energy rate component ceiling of 6.5 cents per kWh for SDG&E's smaller customers (§ 332.1(b)) and a requirement that the Commission establish a voluntary bill stabilization plan applicable to larger customers (former § 332.1(f)). The voluntary program allows larger customers to elect to have the energy component of their bills set at 6.5 cents per kWh, subject to true-up after a year. The Commission established the ceiling for smaller customers by Decision (D.) 00-09-040 dated September 7, 2000. The Commission established the voluntary program for larger customers by D.00-12-033 dated December 7, 2000.

In A.00-10-045, SDG&E seeks approval of several proposed measures related to AB 265. In Application (A.) 01-01-044, SDG&E requests authority to assess a "Revenue Shortfall Surcharge" of 2.3 cents per kWh on electric bills of its residential, small commercial, and street lighting customers. The applications were consolidated by oral ruling made at the prehearing conference (PHC) held in San Diego on February 16, 2001. ABX1 43 makes several modifications to the rate and bill stabilization provisions adopted by AB 265. This decision deals solely with implementation of one provision of ABX1 43, and does not address the other issues in this proceeding.