3. Discussion

As amended by ABX1 43, § 332.1(f) states the following:

The commission shall establish an initial frozen rate of six and five-tenths cents ($0.065) per kilowatt hour on the energy component of electric bills for electricity supplied to all customers by the San Diego Gas and Electric Company not subject to subdivision (b), for the time period ending with the end of the rate freeze for the Pacific Gas and Electric Company and the Southern California Edison Company pursuant to Section 368, retroactive to February 7, 2001. The commission shall consider the comparable energy components of rates for comparable customer classes served by the Pacific Gas and Electric Company and the Southern California Edison Company and, if it determines it to be in the public interest, the commission may adjust this frozen rate, and may do so, retroactive to the date that rate increases took effect for customers of Pacific Gas and Electric Company and Southern California Edison Company pursuant to the commission's March 27, 2001, decision. The commission shall determine the Fixed Department of Water Resources Set-Aside pursuant to Section 360.5 for customers subject to this section, reflecting a retail rate consistent with the rate for the energy component of electric bills as determined in this subdivision, in place of the retail rate in effect on January 5, 2001. This section shall be construed to modify the payment provisions, but may not be construed to modify the electric procurement obligations of the Department of Water Resources, pursuant to any contract or agreement in accordance with Division 27 (commencing with Section 80000) of the Water Code, and in effect as of February 7, 2001, between the Department of Water Resources and San Diego Gas and Electric Company.

We act today on our own motion to comply with the requirements stated in the first sentence of this statute. The legislature unequivocally intends that we act to protect SDG&E's larger commercial, industrial, and agricultural customers by freezing the energy component of their rates initially at 6.5 cents per kWh, retroactive to February 7, 2001, and we hereby do so. Because such action is mandatory under the statute, our decision today is largely ministerial in nature. We are persuaded that we should act immediately to implement this provision of ABX1 43, even as we take a limited amount of time to expeditiously consider the other provisions of the statute that we must implement. This will allow SDG&E's larger customers to begin realizing, at the earliest possible date, the rate protection intended by the Legislature.

Section 332.2, added by ABX1 43, states the following:

Rates set by the commission that are subject to subdivision (f) of Section 332.1 shall not result in any retroactive recovery of undercollections by the San Diego Gas and Electric Company. Any undercollection resulting from the retroactive rate reductions ordered pursuant to this chapter, retroactive to February 7, 2001, shall not result in a revenue undercollection to San Diego Gas and Electric Company.

We intend to explore means of compliance with § 332.2 in a subsequent decision implementing ABX1 43. In order to preserve SDG&E's rights under the statute without prejudice to our determination of this issue, we will authorize SDG&E to establish a memorandum account to record revenues and revenue shortfalls associated with the initial frozen rate established by this order.

We affirm the Assigned Commissioner's Ruling of April __, 2001 designating this consolidated proceeding as the appropriate procedural vehicle for implementing ABX1 43. Further action in this proceeding related to this legislation may include, but may not necessarily be limited to, adjustments to the initial frozen rate based on consideration of comparable energy components of rates for comparable customer classes served by PG&E and Edison pursuant to § 332.1(f); whether to discontinue the voluntary bill stabilization program for larger customers that was established by D.00-12-033 pursuant to former § 332.1(f); whether the frozen rate for SDG&E's larger customers should be extended to direct access customers;³ means of compliance with § 332.2; and appropriate accounting mechanisms.