XII. Assignment of Proceeding
Carl Wood and Geoffrey Brown are the Assigned Commissioners and Thomas Pulsifer is the assigned ALJ in this proceeding.
1. Decision (D.) 02-03-055 determined that, as a condition of retaining the DA suspension as effective after September 20, 2001, a surcharge must be imposed on DA customers sufficient to prevent cost shifting to bundled customers as a result of DA migration between July 1 and September 20, 2001.
2. By ALJ ruling dated March 29, 2002, the scope of this proceeding was expanded to consider cost responsibility surcharges for "Departing Load" in order to prevent cost shifting to bundled customers.
3. Pursuant to Rule 51.1, a joint motion was filed for approval of a Settlement Agreement proposing disposition of various contested issues in this proceeding relating to cost responsibility surcharges applicable to Departing Load served by Customer Generation.
4. The Settlement Agreement is offered as an integrated document, and not as a collection of separate agreements on discrete issues. Each party has reserved the right to withdraw support of the Agreement if the Commission makes modifications or makes approval conditional upon modifications.
5. Nothing in the Settlement Agreement constitutes an admission or acceptance by any party of any fact, principle, or position contained therein, except to the extent that sponsoring parties acknowledge that they pledge support for Commission approval and implementation of all provisions contained therein.
6. Nothing in the Settlement Agreement is intended by sponsoring parties to address or resolve issues in this phase of the proceeding relating to any type of Departing Load other than Customer Generation.
7. Although various parties raised concerns as to the effect of CRS on creating economic disincentives to develop various forms of alternative generation, no party demonstrated that imposition of CRS, as adopted in this order, is contrary to law or prohibited under Commission policy.
8. To the extent that economic incentives or subsidies to encourage the development of alternative generation is not reflected in the Settlement Agreement, the Commission has the issue before it in R. 99-10-025 concerning the nature and extent, if any, of such incentives that may be warranted to develop alternative forms of Customer Generation.
9. The CRS elements that are at issue for Customer Generation include Department historic and ongoing charges, "tail" CTC charges, and the HPC for SCE.
10. The imposition of a "Shortfall Charge" as called for under the Settlement would be inconsistent with the Commission's findings in D.02-11-022 regarding integrated relationship between the reserve accounts and historic shortfall, and would permit Customer Generation to escape from paying their full share of Bond-related costs in comparison to bundled and DA load.
11. The provisions for ongoing DWR power charges under the Settlement Agreement does not provide a reasonable recognition of forecasted Customer Generation that was taken into account in determining contractual commitments for the procurement of power by DWR during 2001.
12. DWR began procuring electricity on behalf of retail end use customers in the service territories of the California utilities: for PG&E and SCE on January 17, 2001, and for SDG&E on February 7, 2001.
13. AB 1X provides for DWR to collect revenues by applying charges to the electricity that it purchased on behalf of all retail customers, as a direct obligation of DWR.
14. The provisions of the Settlement that make DWR charges applicable to qualifying customers that departed from utility service after January 17, 2001 is consistent with applicable provisions of AB 1X and AB 117.
15. The provision for a "tail" CTC covering those cost categories defined in Pub. Util. Code § 367 (a) (1)-(6), is consistent with Commission and legislative mandates for customers to bear their share of responsibility for the above-market component of utility purchased power and QF contracts.
16. The provision in the Settlement Agreement for recovery of a Historic Procurement Charge from Customer Generation in the SCE service territory, covering a share of the costs authorized in D.02-07-032, reasonably relates customer responsibility to a customer-specific analysis of contributions to SCE's shortfall and revenues that customers have already contributed toward recovery of those costs
1. It is consistent with the intent of D. 02-03-055 to impose cost responsibility surcharges on Customer Generation Departing Load to the extent necessary to prevent cost shifting to bundled customers based on generally similar principles as apply to DA load as set forth in D. 02-11-022.
2. The Commission has broad authority under general provisions of Public Utilities Code Section 701 to regulate public utilities and to "do all things...which are necessary and convenient in the exercise of such power and jurisdiction."
3. The Commission has authority under AB 1X to impose CRS on Customer Generation Departing Load to recover DWR-related costs.
4. Consistent with the Commission's above-noted broad authority to regulate, together with Public Utilities Code Sections 451 and 453 prohibiting discrimination, bundled customers may not be arbitrarily charged for obligations that rightfully are the responsibility of Customer Generation Departing Load.
5. Pursuant to AB 1X and Public Utilities Code Sections 701 and 366(d), as well as the provisions of D. 02-02-051, the Commission has legal authority to apply DWR Bond Charges on Departing Load Customer Generation that departed from utility service after DWR began procuring power on behalf of retail utility customers.
6. Under Rule 51.1(e), the Commission must find a settlement, whether contested or uncontested, to be "reasonable in light of the whole record, consistent with the law, and in the public interest" before it may approve a settlement.
7. As prescribed in D. 01-12-018, when a contested settlement is presented and where hearings have been held on contested issues, the Commission is free to consider such settlements under Rule 51.1(e) or as joint recommendations that may or may not be supported by record evidence.
8. The Settlement Agreement offered in this phase of the proceeding is not reasonable in light of the whole record, consistent with the law, or in the public interest.
9. Parties sponsoring the Settlement should be provided an opportunity to elect to accept our denial of the Settlement Agreement or to request other relief, as provided for under Rule 51.7.
10. In the passage of AB 2228, the Legislature specifically considered and elected to exempt biodigester projects from any net metering or other charges for departing the utility system. Accordingly such biodigester projects should be exempt from the CRS adopted in this order.
11. The resolution of the issues associated with AB 58 to the utilities' filing of implementing tariffs. Parties shall have the right to make whatever arguments they wish regarding the applicability and implementation of DWR and utility charges to net metered customers under AB 58.
12. AB58 amended Public Utilities Code Section 2827.7 and exempts generation eligible for net metering that has all permits on or before December 31, 2002, and is constructed on or before September 30, 2003, from any new or additional surcharges for the life of the system. Accordingly, customer generation eligible for net metering should be exempt from the CRS adopted in this order.
13. This decision construes, applies, implements, and interprets the provisions of AB 1X (Chapter 4 of the Statutes of 2001-02 First Extraordinary Session). Therefore, Public Utilities Code Section 1731(c) (applications for rehearing are due within 10 days after the date of issuance of the order or decision) and Public Utilities Code Section 1768 (procedures applicable to judicial review) are applicable.
IT IS ORDERED that:
1. This order shall apply to the service territories of Southern California Edison, Pacific Gas and Electric Company, and San Diego Gas & Electric Company.
2. A mechanism for the determination of a Cost Responsibility Surcharge applicable to Departing Load served by Customer Generation is hereby adopted, as set forth below.
3. The terms of the Proposed Settlement Agreement regarding the imposition of a surcharge mechanism is not approved.
4. A Direct Access Cost Responsibility Surcharge is hereby adopted applicable to designated departing load in the service territories of PG&E, SCE, and SDG&E composed of the following elements:
a. DWR Bond Charge, covering cost responsibility for the period from the inception of DWR's power purchase program through September 20, 2001.
b. DWR Power Charge, covering the historic period from September 21, 2001, through December 31, 2002.
c. DWR Power Charge, covering the prospective period for the Calendar Year 2003.
d. Utility-Retained generation component applicable to above-market costs
5. Consistent with Public Utilities Code Section 2827.7, customer generation eligible for net metering shall be exempt from the CRS adopted in this order.
6. 200 MW of clean and super-clean distributed generation as defined in Public Utilities Code Section 353.2 (b).
7. DWR ongoing power charge shall be set equal to the corresponding cents/kWh surcharge component in effect on the date of departure as determined pursuant to the DA phase of R. 02-01-011 and related or successor proceedings.
8. To the extent that the Commission determines that (a) any Commission-imposed DA CRS cap has resulted in an undercollection by the utility of any applicable DA nonbypassable charges, and (b) individual DA customers shall remain responsible for a portion of the undercollection if they return to bundled utility service, then these DA customers shall remain responsible for the same portion of the undercollection when they become Departing Load.
9. At the discretion of the departing direct access customer, the undercollected amount referenced above shall be collected through either a lump sum or through monthly billings by the utility with the total amount of each monthly charge for both DA undercollections and any applicable Departing Load surcharges subject to the DA CRS cap.
10. SCE is authorized to recover an Historical Procurement Charge (HPC) from Departing Load that was receiving bundled service at the time of the departure.
11. Departing Load exempt from competition transition charges pursuant to any statute, including without limitation Public Utilities Code §§372 and 374, as the statute exists on the day this order is adopted, shall be exempt from "tail" CTC.
12. Parties sponsoring the Settlement are authorized, as part of their comments of the Alternate Decision, to request other relief, as provided for under Rule 51.7.
13. The recovery of the CRS element relating to recovery of bond charges shall be implemented once this decision becomes final and unappealable. During the interim, the bond charge component shall be tracked through the subaccount process established in D.02-10-063 and D.02-11-074.
14. PG&E, SCE, and SDG&E, respectively, are hereby directed to file necessary tariff revisions to incorporate and implement the other surcharge elements adopted in this order. The utilities shall make compliance advice letter filings within 5 days of the effectiveness of this order, to implement the CRS element, other than bond charges, as adopted in this order. The advice letters shall be effective on filing, subject to post-filing review by the Energy Division.
This order is effective today.
Dated ________________ in San Francisco, California.
