5. Comments on Draft Decision
On June 13, 2001, the draft decision of Presiding Officer and Assigned Commissioner Wood on this matter was mailed to parties in accordance with Section 311(g)(3) of the Public Utilities Code and Rule 77.7 of the Rules of Practice and Procedure. Comments were filed and served on _____________, and reply comments were filed and served on _____________.
1. An electricity curtailment lasting only a minute at a petroleum refinery can result in total shutdown of the refinery for up to three weeks.
2. The loss of production from a single refinery for several weeks can result in a dramatic drop in fuel inventories in California, and a substantial price increase.
3. Oil refineries are the most sensitive of all customers in the critical fuels chain of production to electricity curtailments.
4. The Governor urges that the Commission exempt petroleum refineries and ancillary facilities from rotating outage without delay.
5. Current supplies of petroleum fuels are very tight, the outlook for gasoline supplies this summer is a major concern, and federal Environmental Protection Agency minimum gasoline oxygen requirements for California may result in further supply reductions, with consequential higher prices.
6. Transportation fuels are critical to public health and safety, particularly law enforcement, medical care responders, and the military.
7. Storage facilities may exist at some crude oil and natural gas production facilities, as well as at refineries for crude product coming in and refined product going out.
8. Some pipelines successfully participate in interruptible programs with interruptions up to 6 hours.
9. Successful participation in interruptible programs, along with storage facilities, can permit some customers in the critical fuels chain of production to weather periodic, limited electricity interruptions without causing harm to themselves, the broader public health and safety, or the California economy.
10. Utilities are under Commission direction to coordinate electricity interruptions affecting customers in the critical fuels chain of production to minimize disruptions to public health and safety, to the extent feasible, with that coordination not limited to one rotating outage block.
11. The situation that led the Commission to waive penalties for two utility pipelines in January 2001 due to cumulative interruptions of up to nearly 24 hours per day for several days is unlikely to be similar to scheduled, sequential rotating outages of less than two hours through many different blocks of customers.
12. Every additional exemption reduces the pool of customers from which to draw for rotating outages.
13. The potential frequency and duration or rotating outages experienced by remaining customers is increased as the pool of candidate customers is reduced.
14. Maintenance of a reasonable pool of customers available for rotating outages is vital to have rotating outages as a tool in protecting the state from widespread system collapse when demand otherwise exceeds supply.
15. Each utility must maintain at least 40% of its load available for rotating outages to avoid the danger of involuntary load shedding and general system collapse.
16. SCE reports that, if asked to provide such evidence, exempting all circuits serving all of EPUC constituents would erode SCE's load available for rotating outages to well below the current 40% minimum criterion.
17. Clear and objective identification of any customers to be exempted within the critical fuels chain of production will promote accurate and expeditious implementation of any exemption order.
18. SIC Code 2911 applies to petroleum refining.
19. Each utility is under Commission direction to evaluate the adequacy of backup generation, and consider removing customers with adequate backup generation from the essential customer list, with the exception of hospitals.
20. Current pleadings do not sufficiently differentiate between customers with and without adequate backup generation in the critical fuels chain of production to ensure compliance with the Governor's urgent request to exempt refineries and ancillary facilities if backup generation is considered at this time.
21. The public interest in quickly amending D.01-04-006 to provide essential customer status for petroleum refineries and vital ancillary facilities outweighs the public interest in a full 30-day public review and comment of the proposed amendment.
1. The Priority System for Rotating Outages should be amended by adding Category N to the list of essential customers normally excluded from rotating outages.
2. Category N should include petroleum refineries (SIC Code 2911) and ancillary facilities vital to SIC Code 2911 (e.g., feedstock chemicals that are required in the refining process).
3. Category N should also include other customers in the critical fuels chain of production, to the extent exempted by the Commission.
4. Application of essential customer status for petroleum refineries and vital ancillary facilities should be, at this time, without regard to the status of backup generation.
5. The period for public review and comment on the draft decision should be reduced, pursuant to Rule 77.7(f)(9).
6. This order should be effective today so that essential customer status for petroleum refineries and vital ancillary facilities can be implemented without delay, and potential threat to public health and safety by shortages in critical petroleum products can be mitigated.
IT IS ORDERED that:
1. The Priority System for Rotating Outages is amended to add Category N to the list of essential customers normally excluded from rotating outages. The amended Priority System is contained in Attachment A. Category N is:
"Petroleum refineries, vital ancillary facilities, and other customers in the critical fuels chain of production, to the extent exempted by the Commission."
2. Category N shall currently include:
a. petroleum refineries in Standard Industrial Classification (SIC) Code 2911, and
b. ancillary facilities vital to SIC Code 2911 (e.g., feedstock chemicals that are required in the refining process).
3. In their inclusion of petroleum refineries and vital ancillary facilities in Category N, respondent utilities shall not evaluate the adequacy of the backup generating equipment of these customers at this time.
This order is effective today.
Dated , at San Francisco, California.
PRIORITY SYSTEM FOR ROTATING OUTAGES
1. Essential Customers - Normally Exempt from Rotating Outages
A. Government and other agencies providing essential fire, police, and prison services.
B. Government agencies essential to the national defense.
C. Hospitals.
D. Communication utilities, as they relate to public health, welfare and security, including telephones.
E. Navigation communication, traffic control, and landing and departure facilities for commercial air and sea operations.
F. Electric utility facilities and supporting fuel and fuel transportation services critical to continuity of electric power system operation.
G. Radio and television broadcasting stations used for broadcasting emergency messages, instructions, and other public information related to the electric curtailment emergency.
H. Water and sewage treatment utilities may request partial or complete rotating outage exemption from electric utilities in times of emergency identified as requiring their service, such as fire fighting.
I. Areas served by networks, at serving utility's discretion.
J. Rail rapid transit systems as necessary to protect public safety, to the extent exempted by the Commission.
K. Customers served at transmission voltages to the extent that (a) they supply power to the grid in excess of their load at the time of the rotating outage, or (b) their inclusion in rotating outages would jeopardize system integrity.
L. Optional Binding Mandatory Curtailment Program (OBMC): Any customer, or customers, meeting the following criteria.
The customer must file an acceptable binding energy and load curtailment plan with the utility. The customer must agree to curtail electric use on the entire circuit by the amount being achieved via rotating outages. The customer's plan must show how reduction on the entire circuit can be achieved in 5 percent increments to the 15 percent level, and show how compliance can be monitored and enforced. The customer must maintain the required reduction during the entire rotating outage period. The required curtailment level is requested prior to commencement of Stage 3. Several customers on a circuit may file a joint binding plan to guarantee the required curtailment from the entire circuit. Each utility shall facilitate communication between customers on a circuit if any customer expresses interest in enrolling in the OBMC program.
Note: Protection cannot be guaranteed because daily circuit switching may temporarily change a customer's outage block and priority classification.
M. Limited other customers as necessary to protect public health and safety, to the extent exempted by the Commission.
N. Petroleum refineries, vital ancillary facilities, and other customers in the critical fuels chain of production, to the extent exempted by the Commission.
2. Outage Notification
A. Life Support and Critical Care
Life support and critical care customers shall be notified by recorded or other message of a rotating outage to which they will be affected. The call is not required until a rotating outage is imminent. Utilities must undertake their best efforts to inform these customers.
B. Large Customers, Economic Damage Customers, and Danger to Health and Safety
As circumstances permit, individual warning of rotating outages will be given to large customers having demand of 300 kW or more. It will also be given to other customers upon their showing to the utility of major economic damage, or clear and imminent danger to personal health or safety. Individual timely warning can not be guaranteed, however, because of time, manpower, or communication limits, or due to daily circuit switching which may temporarily change a customer's outage block number.
C. All Other Customers
Warning and other relevant information may be provided by mass media, with no special treatment or individual notification generally given.
(END OF APPENDIX A)
