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STATE OF CALIFORNIA GRAY DAVIS, Governor

PUBLIC UTILITIES COMMISSION

505 VAN NESS AVENUE

SAN FRANCISCO, CA 94102-3298

February 1, 2002 Item 1

TO: PARTIES OF RECORD IN RULEMAKING 00-10-002, Phase 2

This is the proposed decision of Commissioner Carl Wood, previously designated as the presiding officer in this proceeding. It will be on the Commission's agenda at the next regular meeting 30 days after the above date. The Commission may act then, or it may postpone action until later.

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 15 pages. Finally, comments must be served separately on Administrative Law Judge Mattson and the assigned Commissioner, and for that purpose I suggest hand delivery, overnight mail, or other expeditious method of service.

Lastly, parties may move for final oral argument (FOA) by following the procedure, and presenting the information identified in the September 21, 2001 Phase 2 Scoping Memo and Ruling (page 8). A party moving for FOA shall file and serve the motion by February 8, 2002. If more than one party plans to move for FOA, parties shall use their best efforts to present a joint motion. Responses, if any, shall be filed and served by February 13, 2002.

/s/ LYNN T. CAREW

Lynn T. Carew, Chief

Administrative Law Judge

LTC: eap

COM/CXW/k47 DRAFT Item 1

Decision PROPOSED DECISION OF COMMISSIONER WOOD
(Mailed February 1, 2002)

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Order Instituting Rulemaking into the operation of interruptible load programs offered by Pacific Gas & Electric Company, San Diego Gas & Electric Company, and Southern California Edison Company and the effect of these programs on energy prices, other demand responsiveness programs, and the reliability of the electric system.

Rulemaking 00-10-002

(Filed October 5, 2000)

Phase 2

Voltage Reduction

(See Appendix A for List of Appearances)

TABLE OF CONTENTS

Title Page

INTERIM OPINION ON EMERGENCY VOLTAGE REDUCTION MEASURES 22

Findings of Fact 3131

Conclusions of Law 3434

INTERIM ORDER 3636

INTERIM OPINION ON EMERGENCY
VOLTAGE REDUCTION MEASURES

1. Summary

Several methods are used to balance electricity supply and demand to avoid outages. For example, supply may be increased by the addition of new power plants, or the use of existing backup generation. Demand may be decreased by the use of energy efficiency programs, conservation, or curtailment of service to interruptible customers. A reduction in system voltage may also decrease demand. As a last resort, rotating outages may be necessary.

We here consider the use of voltage reduction by electric utilities during peak demand periods as one more of several tools to decrease the frequency or duration of rotating outages. As a result of our review, we endorse existing and ongoing voltage reduction efforts within current standards and rules. We encourage additional cost-effective voltage reduction measures, to be implemented during normal distribution substation work. We decline to order voltage reduction during system emergencies, however, given that the need for this tool has substantially moderated, the benefits are relatively small compared to associated risks, and other reasonable options are available. Parties may propose specific emergency voltage reduction measures for further consideration if the need resurfaces.

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