2. Background

On January 17, 2001, Governor Gray Davis proclaimed a State of Emergency. The proclamation was based on a profoundly dysfunctional electricity market, including electricity shortages resulting in blackouts for millions of Californians, constituting a condition of extreme peril to the safety of persons and property. Governor Davis directed immediate implementation of several measures to address the crisis.

Over the next few months, the Governor issued numerous Executive Orders directing implementation of additional measures, such as mandatory reduction in outdoor lighting, increased use of existing power plants where reasonable, streamlined construction of new power plants, the 20/20 Rebate Program to encourage conservation, and the Demand Bidding Program to facilitate load curtailment.¹ Some forecasts still predicted a high probability of many rotating outages to balance supply and demand during Summer 2001.

On July 3, 2001, Governor Davis asked the Commission to consider another tool to address the potential for multiple outages during Summer 2001. Specifically, the Governor asked that the Commission consider taking action to have electric utilities reduce distribution system voltage in order to reduce peak demand, alleviate the current shortage of electricity, and reduce the need for rolling blackouts.²

In response, the Commission invited parties to submit comments. (Assigned Commissioner's Ruling (ACR) dated July 5, 2001.) In particular, comments were sought on a proposal to have Pacific Gas and Electric Company (PG&E), Southern California Edison Company (SCE) and San Diego Gas & Electric Company (SDG&E) reduce distribution system voltage by 2.5% on circuits currently at or above 120 volts, and to 117 volts on circuits operating below 120 volts. Comments were filed and served on July 10, 2001.

By ACR dated July 17, 2001, further information was sought, and a workshop was set for July 25, 2001. The pleadings and discussion revealed differing abilities by each utility to implement voltage reduction, and disputes on the merits and feasibility of various voltage reduction measures.

To further our inquiry, a formal hearing was set to gather evidence. Respondent utilities were directed, and other parties were invited, to each propose a specific voltage reduction plan. In addition, utilities were directed, and parties were invited, to provide a full assessment of the benefits and costs of such plans.

Evidentiary hearing was held on October 11, 2001. Opening briefs were filed and served on November 2, 2001, and reply briefs were filed and served on November 9, 2001.