STATE OF CALIFORNIA ARNOLD SCHWARZENEGGER, Governor
PUBLIC UTILITIES COMMISSION
505 VAN NESS AVENUE
SAN FRANCISCO, CA 94102-3298
October 29, 2004 Agenda ID #4008
Ratesetting
TO: PARTIES OF RECORD IN RULEMAKING 03-10-003
RE: NOTICE OF AVAILABILITY OF PROPOSED DECISION RESOLVING PHASE 1 ISSUES ON PRICING AND COSTS ATTRIBUTABLE TO COMMUNITY CHOICE AGGREGATORS AND RELATED MATTERS
Consistent with Rule 2.3(b) of the Commission's Rules of Practice and Procedure, I am issuing this Notice of Availability of the above-referenced proposed decision. The proposed decision was issued by Administrative Law Judge (ALJ) Kim Malcolm on October 29, 2004. An Internet link to this document was sent via e-mail to all the parties on the service list who provided an e-mail address to the Commission. An electronic copy of this document can be viewed and downloaded at the Commission's Website ( www.cpuc.ca.gov).
Any recipient of this Notice of Availability who is not receiving service by electronic mail in this proceeding may request a paper copy of this document from the Commission's Central Files Office, at (415) 703-2045; e-mail cen@cpuc.ca.gov.
This is the proposed decision of ALJ Malcolm, previously designated as the principal hearing officer in this proceeding. It will not appear on the Commission's agenda for at least 30 days after the date it is mailed. This matter was categorized as ratesetting and is subject to Pub. Util. Code § 1701.3(c). Pursuant to Resolution ALJ-180, a Ratesetting Deliberative Meeting (RDM) to consider this matter may be held upon the request of any Commissioner. If that occurs, the Commission will prepare and mail an agenda for the RDM 10 days before hand. When an RDM is held, there is a related ex parte communications prohibition period.
When the Commission acts on the proposed decision, it may adopt all or part of it as written, amend or modify it, or set it aside and prepare its own decision. Only when the Commission acts does the decision become binding on the parties.
Parties to the proceeding may file comments on the proposed decision as provided in Article 19 of the Commission's "Rules of Practice and Procedure." These rules are accessible on the Commission's website at http://www.cpuc.ca.gov. Pursuant to Rule 77.3 opening comments shall not exceed 25 pages.
Consistent with the service procedures in this proceeding, parties should send comments in electronic form to those appearances and the state service list that provided an electronic mail address to the Commission, including ALJ Malcolm at kim@cpuc.ca.gov. Service by U.S. mail is optional, except that hard copies should be served separately on ALJ Malcolm and the assigned Commissioner, and for that purpose I suggest hand delivery, overnight mail or other expeditious methods of service. In addition, if there is no electronic address available, the electronic mail is returned to the sender, or the recipient informs the sender of an inability to open the document, the sender shall immediately arrange for alternate service (regular U.S. mail shall be the default, unless another means - such as overnight delivery is mutually agreed upon). The current service list for this proceeding is available on the Commission's Web page, www.cpuc.ca.gov.
/s/ ANGELA K. MINKIN by KH
Angela K. Minkin, Chief
Administrative Law Judge
ANG:tcg
Attachment
ALJ/KLM/tcg DRAFT Agenda ID #4008
Ratesetting
Decision PROPOSED DECISION OF ALJ MALCOLM (Mailed 10/29/2004)
BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA
Order Instituting Rulemaking to Implement Portions of AB 117 Concerning Community Choice Aggregation. |
Rulemaking 03-10-003 (Filed October 2, 2003) |
(See Appendix A for List of Appearances.)
ORDER RESOLVING PHASE 1 ISSUES ON PRICING AND COSTS ATTRIBUTABLE TO COMMUNITY CHOICE AGGREGATORS
AND RELATED MATTERS
TABLE OF CONTENTS
Title Page
ORDER RESOLVING PHASE 1 ISSUES ON PRICING AND COSTS ATTRIBUTABLE
TO COMMUNITY CHOICE AGGREGATORS AND RELATED MATTERS 1
I. Summary and Background 2
II. Procedural Background 4
III. Implementation and Transaction Costs 7
A. Allocation of Implementation Costs Between Ratepayers and
Individual CCAs 8
B. Transaction Costs 11
C. Specific Transaction and Implementation Costs 15
IV. Cost Responsibility Surcharge 22
A. The CRS Model 22
B. CRS "Vintaging" and Utility Resource Plans 24
C. Unbundling of CRS Components 28
D. Credits or Liability for "In-Kind" Power 29
E. Open Season 31
F. Responsibility for CRS Liabilities 33
G. Collection of Amounts Relating to CRS Exemption for Baseline Customers 33
H. Exclusion for Norton Air Force Base 35
I. CRS True-Up 36
J. CRS Implementation 39
V. Informational Needs of CCAs 43
VI. Other Issues and Terms of Service 49
A. CCA Program Phase-In 49
B. CCA Requirements to Offer Service 51
C. CCA-Specific Load Profiles 51
D. Boundary Metering 52
VII. Comments on Proposed Decision 53
VIII. Assignment of Proceeding 53
Findings of Fact 53
Conclusions of Law 59
ORDER 64
Appendix A - List of Appearances
Appendix B - Assembly Bill 117
ORDER RESOLVING PHASE 1 ISSUES ON PRICING AND COSTS ATTRIBUTABLE TO COMMUNITY CHOICE AGGREGATORS
This order resolves outstanding issues in Phase 1 of this proceeding, which addresses costs and other related matters relevant to Community Choice Aggregators (CCA) and in order to implement the provisions of Assembly Bill (AB) 117 (2002 Stats., ch. 838) that would enable CCAs to procure power for their local residents and businesses.
I. Summary and Background
CCAs are governmental entities formed by cities and counties to serve the energy requirements of their local residents and businesses. The state Legislature has expressed the state's policy to permit and promote CCAs by enacting AB 117, which authorizes the creation of CCAs, describes essential CCA program elements, requires the state's utilities to provide certain services, and establishes methods to protect existing utility customers from liabilities that they might otherwise incur when a portion of the utility's customers transfer their energy services to a CCA.
Cities and counties have become increasingly involved in implementing energy efficiency programs, advocating for their communities in power plant and transmission line siting cases, and developing distributed generation and renewable resource energy supplies. The CCA program takes these efforts one step further by enabling communities to purchase power on behalf of the community.
Today's decision is the first major step toward implementing that portion of the CCA program that would facilitate energy procurement activities by cities and counties. Today's decision constitutes the beginning of our implementation of AB 117. In this implementation, we have fashioned program that is consistent with our expressed policies with regard to resource planning, utility ratemaking and cost recovery generally. This approach to the program will protect bundled utility customers who do not have the option to transfer to a CCA from the possible cost impacts of CCA programs.
This order by itself does not resolve all issues, even those originally anticipated for Phase 1 in this proceeding. Unfortunately, the record does not provide the type of information required for final resolution of many of the cost allocation issues that are the subject of this phase of the proceeding. This order does, however, take the program as far as possible with the limited information we have by adopting interim CCA charges and service protocols.
We hope this decision provides the type of guidance CCAs and prospective CCAs will need in determining whether to pursue energy procurement efforts in advance of our final order in Phase 2. The order should also provide some guidance to the parties about how we envision the CCA energy procurement program in the broadest sense, and the costs that CCAs will have to incur as customers of and partners with the utilities.
This order adopts the following:
· Department of Water Resources' (DWR) methodology for estimating the cost recovery surcharge (CRS), which will allow the utilities to recover from CCAs the costs of DWR bonds and contracts, utility power procurement contracts and other items in a way that remaining bundled utility customers are indifferent to the CCA program;
· A temporary CRS in the amount of $.022/kWh, which will be trued up in 18 months or sooner, if final utility estimates of CRS are 30% lower or higher than $.022/kWh, and thereafter will be trued up annually;
· A requirement that the utilities provide CCAs an opportunity to take delivery of power from DWR contracts through a physical allocation of these power purchase contracts;
· Principles for setting prices for utility services offered to CCAs;
· Ratemaking and cost allocation principles for utility services offered to CCAs, implementation costs and the CRS;
· A method to allocate amounts related to the CRS exception for baseline customers;
· An exception from the CRS for certain load attributable to Norton Air Force Base;
· Requirements for and conditions under which CCAs can acquire customer information from utilities needed to manage energy procurement by CCAs;
· Application of AB 117 as it relates to CCA program phase-ins, boundary metering and the use of CCA-specific load profiles.
