Word Document

PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

ENERGY DIVISION RESOLUTION E-3733

RESOLUTION

Resolution E-3733. This Resolution implements a limited-term rate reward program for conservation efforts that shall provide rate reductions to customers with credits up to twenty percent for reducing electricity consumption by at least twenty percent during the June to September 2001 billing periods for Pacific Gas and Electric Company and Southern California Edison Company. For San Diego Gas & Electric Company, customers must reduce consumption by at least fifteen percent during the same period.

By Executive Orders D-30-01 and D-33-01 of the Governor of the State of California.

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SUMMARY

This Resolution orders Pacific Gas and Electric Company (PG&E), Southern California Edison Company (SCE), and San Diego Gas & Electric Company (SDG&E) to file tariffs that implement Governor Gray Davis' Executive Orders for a limited-term rate reward program. The program would provide up to a 20% credit to those customers who reduce their energy usage this summer.

BACKGROUND

On March 13, 2001, Governor Gray Davis issued Executive Order D-30-01 to implement what has been characterized as the "California 20/20 Rebate Program." On April 26, 2001, Governor Davis issued Executive Order D-33-01which changed the conservation threshold for SDG&E from twenty percent to fifteen percent.1 The limited-term program is intended to provide rate rewards to residential, commercial, agricultural, and industrial customers of Pacific Gas and Electric Company, Southern California Edison Company, and San Diego Gas & Electric Company (Utilities) for their conservation efforts. Under this program, Pacific Gas and Electric Company and Southern California Edison shall provide credits of twenty percent of the customer's Summer 2001 bills for reducing electricity consumption by at least twenty percent during the June to September 2001 period. For San Diego Gas & Electric Company, customers must reduce consumption by at least fifteen percent during the same period. For example, a customer's average daily usage during the June 2001 billing period would be compared with the customer's average daily usage of the June 2000 billing period. PG&E and SCE customers would receive a credit for each month they reduced their usage by twenty percent, and SDG&E customers would receive a credit for each month they reduced their usage by fifteen percent. The program will be financed through a reduction in the Utilities' payments to the Department of Water Resources in subsequent months.

Governor Davis issued Executive Order D-30-01 pursuant to his proclamation on January 17, 2001 that a State of Emergency existed due to the energy shortage in the state of California. The Executive Order finds: a) there is a high probability that the shortage of electricity will continue to cause rolling blackouts throughout the state, and significant conservation efforts are needed to mitigate the effects of this emergency; b) consumers will reduce their energy consumption if provided financial incentives and additional tools to promote energy efficiency in their homes; and c) it is estimated that an effective rate reward program can help reduce energy consumption by up to 3,500 gigawatt hours over twenty-four hours and up to 2,200 megawatt hours during critical summer peak consumption periods. On April 26, 2001, Governor Davis issued Executive Order D-33-01

which reduced the conservation threshold for SDG&E to fifteen percent.

The Executive Orders request the Public Utilities Commission to direct the Utilities to submit programs to carry out the programs and promote consistency in their implementation.

NOTICE

Notice of this Resolution was made by publication in the Commission's Daily Calendar.

DISCUSSION

The Executive Orders charge the California Department of Water Resources (DWR) with implementing the program. On April 24, 2001, the Director of DWR sent the five CPUC commissioners a letter transmitting the "final design and implementation of the 20/20 Rebate Program." The DWR letter is appended to this Resolution (Appendix 1). On April 30, 2001, DWR sent a second letter revising the program to recognize the energy conservation efforts of SDG&E and lower the threshold for energy reduction from twenty percent to fifteen percent. In accordance with the Executive Orders, the DWR letter requests the Commission to direct the utilities to submit tariffs to implement the 20/20 Program as described in their letters. By this Resolution, the Commission responds to those requests. The design requirements are set forth in the DWR letters. The Utilities are directed to implement those design requirements by tariff.

The DWR letters set forth a process by which the utilities will be reimbursed for the bill credits provided under the California 20/20 Rebate Program, as well as the Utilities' reasonable administrative expenses. This process does not require any additional tariffs to be submitted for this Commission's approval, nor does it require any further action by this Commission. However, the Commission stands ready to respond to any DWR request to assist in reviewing the reasonableness of utility invoices for administrative expenses.

Table 1 shows an illustrative example of how the credit would be calculated for a residential customer.

Table 1

Sample Computation

Of 20% Rate Reward

Description

Amount (Dollars)

Total Electric Charge2

$33.72

10% Reduction

(3.37)

Subtotal

30.35

Surcharge3 (1 cent)

3.89

Rate increase4 (3 cent)

8.67

Subtotal

$41.91

Rate - Reward (20%)

(8.38)

Total

$32.53

CPUC Review of Utility Mailings to Customers

The Utilities should submit all bill inserts or letters to customers describing the California 20/20 Rebate Program to the Public Advisor's Office for review and approval prior to distribution to their customers.

COMMENTS

Public necessity requires that the 30-day comment period of Public Utilities Code (PUCode) § 311(g)(1) be reduced in order to implement Executive Order D-30-01 and D-33-01 in a timely fashion. We have balanced the public interest in avoiding the possible harm to public welfare flowing from delay in considering this Resolution against the public interest in using the full 30-day period for review and comment as generally required by the Commission's Rules of Practice and Procedure, Rule 77.7(f)(9). We conclude that the former outweighs the latter. As designed by DWR in order to promote conservation during the summer months of high demand for electricity, the program must be in effect before June 1, 2001. Issuance of this Resolution no later than today is necessary in order to allow time for the utilities to prepare tariffs and for the CPUC to review the tariffs and direct any necessary changes prior to June 1. We conclude that failure to adopt a Resolution before the expiration of the 30-day review and comment period would cause significant harm to the public welfare. Accordingly, we reduce the review and comment period from 30 days to 8 days.

The draft Resolution of the Energy Division in this matter was mailed to the parties on April 25, 2001 in accordance with PU Code § 311(g). No comments were filed. One person, in an e-mail message to the Public Advisors Office, did not support the governor's proposal because it would "...penalize those customers who have consistently conserved energy and rewards those who have not been conservative."

FINDINGS

1. Governor Gray Davis issued Executive Order D-30-01 on March 13, 2001 under the authority of his proclamation of a state of emergency due to the energy shortage in the State of California. He issued Executive Order D-33-01 on April 26, 2001 to change the conservation threshold of San Diego Gas & Electric customers from twenty percent to fifteen percent.

2. The California 20/20 Rebate Program is a limited term rate-reward energy conservation program for residential, commercial, agricultural, and industrial customers.

3. The Utilities should file tariffs that implement the California 20/20 Rebate Program pursuant to the design requirements set forth in Appendix 1 and Appendix 2 of this Resolution.

4. The Utilities should submit all bill inserts or letters describing the Program to the Public Advisor's Office for review and approval prior to distribution to their customers.

5. The public interest in the Commission taking immediate action in order to avoid the possible harm to public welfare flowing from delay in implementing the California 20/20 Rebate Program clearly outweighs the public interest in delaying Commission action until after the 30 day review and comment period normally required by Public Utilities Code § 311(g).

THEREFORE IT IS ORDERED THAT:

1. Pacific Gas and Electric Company, Southern California Edison Company, and San Diego Gas & Electric Company shall each file advice letters by May 8, 2001 that implement the "California 20/20 Rebate Program" as described in this Resolution. In addition to the filed advice letters, the Utilities shall provide a "red line" version of the tariff sheets as workpapers to show all additions and deletions. The Advice Letters shall become effective after the Energy Division has reviewed them for compliance with this Resolution.

2. The review and comment period normally required by Public Utilities Code § 311(g) is reduced since the situation posed by the current electrical supply emergency and the potential for increased conservation efforts afforded by the California 20/20 Rebate Program requires immediate action by the Commission.

3. The Utilities shall submit all bill inserts or letters to customers describing the California 20/20 Rebate Program to the Public Advisor's Office for review and approval prior to distribution to its customers.

This Resolution is effective today.

I certify that the foregoing resolution was duly introduced, passed and adopted at a conference of the Public Utilities Commission of the State of California held on May 3, 2001; the following Commissioners voting favorably thereon:

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1 1. In the Draft Resolution circulated for comments on April 25, 2001, we observed in footnote 1 on page 2 that the Governor had announced his intent to modify the program for SDG&E customers to enable SDG&E customers to qualify for bill credits based on a fifteen percent reduction in usage. The Governor formally issued Executive Order D-33-01 one day after the Draft Resolution was circulated for comments.

2 2. Includes charges for Energy, Transmission, Distribution, TTA, CTC, Nuclear Decommissioning, and Public Purpose at rate-freeze rate levels.

3 3. Per D.01-01-018, the 1 cent/kwhr surcharge is a flat charge on all kilowatt-hours, but does not apply to low-income customers eligible for the CARE program.

4 4. This is illustrative of the rate changes ordered in Decision 01-03-082. The actual rate design has not yet been adopted. The Commission is considering a tiered rate approach under which the extent to which rate increases apply would depend on a customer's level of usage.

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