IV. Assignment of Proceeding

Geoffrey F. Brown is the Assigned Commissioner and Thomas R. Pulsifer is the assigned ALJ in this proceeding.

Findings of Fact

1. In D.03-09-052, the Commission ordered PG&E, the CVP Group, and UC/CSU to meet and confer to seek agreement concerning the manner in which relevant preference power volumes in excess of the CRD under Contract 2948A would be identified for purposes of billing CRS.

2. To the extent that parties could not reach timely agreement, D.03-09-052 provided that parties could file a motion for clarification.

3. Representatives from PG&E, the CVP Group, and UC/CSU met in October 2003 to discuss technical implementation issues pursuant to D.03-09-052 directives, but were unable to resolve all issues and did not reach any formal agreements.

4. PG&E discontinued further efforts to reach resolution of the remaining technical issues through the meet-and-confer process, and instead, filed Advice Letter (AL) 2579-E to implement tariffs on November 5, 2004.

5. UC Davis filed its Motion for Clarification based on the claim that PG&E bypassed proper procedures for resolution of the remaining technical issues by filing AL 2579-E. UC Davis sought to have disputed issues relating to PG&E's proposed tariff addressed in this docket rather than through the Commission Resolution process.

6. A subsequent ALJ ruling acknowledged the withdrawal of the pending Commission Resolution, and provided a process for the issues raised by UC Davis to be resolved within this docket through a Commission decision.

7. PG&E utilized December 31, 2004 as a cut-off date for CRS, since this was the date that split-wheeling customers, under Contract 2948-A, reduced or discontinued electric service from PG&E to take service from WAPA or another similarly situated entity.

8. Even if DWR did not explicitly identify split wheeling load as a separate line item in its forecast, a logical inference can be made that that split-wheeling customers' load was incorporated in DWR electricity procurement.

9. DWR was responsible for procuring power not just for serving load in existence on February 1, 2001, but also for additional bundled load beyond February 1, 2001, and entered into long-term contracts for this purpose.

10. To compute the amount in excess of the CRD to be excluded from "departing load," PG&E proposed in its draft tariff that the lesser of the customer's 12-month or 36-month average historical energy usage be applied for CRS purposes subject to a "25 percent rule."

11. Under the "25% percent rule," if the 12-month average versus the 36-month average usage differs by an amount greater than 25%, the 36-month average usage will be applied as default value. The only exception would be where there is substantial evidence that the more recent usage is the result of a persisting change in the customer's usage, and that the 12-month average will be more indicative of the customer's future requirements.

12. UC Davis has not provided a compelling reason to change the 25 percent rule to allow for the lower of the two averages to be used if the changes in customer usage patterns causing these differences resulted from a change in the customer's CRD as provided for under Contract 2948A.

13. The fact that UC Davis may pay a lower CRS under its proposed change in the 25 percent rule does not, of itself, warrant adopting the change.

14. The 25 percent rule is designed to ensure a more accurate estimate of a customer's future usage and mitigate the potential advantage given to a customer in allowing it to unilaterally choose between a 12-month and a 36-month historical usage snapshot.

15. The 25 percent rule, as applied in its E-SDL tariff, is consistent with PG&E's other departing load tariffs in effect and proposed.

16. Under the "X/Y billing" provisions in Contract 2948A, WAPA power is calculated on a load factor calculation as the CRD/maximum demand for the month, multiplied by the total energy for the month. The resulting factor determines the amount of WAPA power supplied that customer in a month, with the customer's remaining requirements served under PG&E bundled retail tariffs.

17. PG&E's proposed E-SDL tariff equates "load in excess of CRD" with retail billings to WAPA customers based upon the X/Y billing mechanism.

18. PG&E has used the X/Y method to calculate UC Davis' usage attributable to PG&E retail service and has billed UC Davis for that amount of usage over the life of Contract 2948A.

19. Even though the X/Y billing factor is used to compute retail billings for bundled service under Contract 2948A, the X/Y billing factor does not produce accurate billing amounts for purposes of the CRS obligation.

20. The X/Y billing factor produces a usage figure in excess of actual amounts so as to recover revenues associated not only with actual power delivered, but also with other costs and services over and above the actual power component of bundled retail service.

21. Other miscellaneous tariff revisions to Schedule E-SDL that PG&E has agreed to, in its comments filed on July 15, 2005, are reasonable, as summarized in the conclusions of law, below.

Conclusions of Law

1. The Petition for Clarification should be granted in order that the disputed issues raised by parties relating to technical implementation of PG&E's tariff may be addressed through a Commission decision.

2. The date of December 31, 2004 should be used as a cut-off date, rather than February 1, 2001, in order to be consistent with other departing load tariffs, and to recognize that DWR procured power based on forecasts continued usage by bundled load past February 1, 2001.

3. UC Davis has not justified its request to amend the "25 percent rule" applicable to calculations of its CRS under Tariff Schedule E-SDL. Although CRS requirements may be higher under PG&E's application of the 25 percent rule, or UC Davis may experience economic hardship in paying CRS, those factors are not relevant criteria to justify waivers, exemptions, or other special treatment in the assessment of CRS requirements.

4. UC Davis has justified its request to require PG&E to amend its tariff with respect to the use of the X/Y billing factor. The tariff should be amended to equate "load in excess of CRD" with the actual quantities of usage by the customer in excess of CRD, rather than by applying the X/Y billing factor.

5. NASA/Ames has not justified its request for calculating its usage based upon average monthly usage for the 12- or 36-months prior to January 1, 2005, instead of using a different usage for each month. PG&E should amend its advice letter to describe more clearly its "monthly average billing" method in Schedule E-SDL to eliminate confusion over how energy usage will be calculated.

6. Modifications to PG&E's proposed tariff should be made to explicitly state the provisions of Preliminary Statement Part BB that will apply to split-wheeling customers.

7. PG&E's proposed tariff provisions for Schedule E-SDL are reasonable, and PG&E should file a supplement within 14 days consistent with the directives in this order.

ORDER

IT IS ORDERED that:

1. The Petition for Clarification of the Regents of the University of California on behalf of University of California (UC Davis) is hereby granted to the extent that it seeks resolution through a Commission Decision of certain technical disputes relating to Departing Load Charges for Western Area Power Administration Split-Wheeling Customers.

2. The resolution of technical disputes as identified in the UC Davis' Petition is hereby decided as set forth in the ordering paragraphs below.

3. The requested modifications in Pacific Gas and Electric Company's (PG&E) E-SDL tariff sought by UC Davis relating to the Date of Departure, and the 25 percent rule, and the X/Y billing method have not been justified and are hereby denied.

4. The requested modification in PG&E's E-SDL tariff sought by UC Davis relating to the X/Y billing factor has been shown to have merit and is adopted. PG&E shall amend its E-SDL tariff with respect to its use of the X/Y billing mechanism to derive "load in excess of the CRD." Instead, the tariff shall define "load in excess of the CRD" as being based on the actual quantities of power delivered to the customer in excess of the CRD.

5. PG&E shall be required to provide clarifying language in its filed E-SDL tariff, describing more clearly its "monthly average billing method" to eliminate confusion over how energy usage is calculated, and to explicitly state the extent to which provisions from Preliminary Statement Part BB will apply to split-wheeling customers.

6. Within 14 days of today's date, PG&E shall file a supplement to Advice Letter 2579-E with revised tariffs that comply with the provisions of this decision. PG&E shall serve the supplement on all parties that protested AL 2579-E, all parties served with AL 2579-E, and all parties in Rulemaking 02-01-011. AL 2579-E as supplemented to comply with this decision shall be effective on the date the supplement is filed, subject to verification of compliance by the Energy Division. In accordance with the Commission's Practice and Procedure Rules 4.1 and 4.5 appended to Decision 05-01-032, any new protests shall be filed within 20 days of the date the supplement is filed and shall be limited to the substance of the supplement.

This order is effective today.

Dated February 16, 2006, at San Francisco, California.

Commissioner Dian M. Grueneich recused

herself from this agenda item and was not

part of the quorum in its consideration.

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