Working Group Discussions
At the start of the working group discussion, CMUA was given an opportunity to expand on the issues that it had raised in its one-page handout titled "Talking Points," (ATTACHMENT 1) which the Energy Division e-mailed to the R. 02-01-011 service list on April 8, 2005.
Among the issues CMUA reiterated was its belief that the Commission should act as soon as possible on the pending Petitions for Modification filed by CMUA,1 Modesto ID,2 and Merced ID.3 CMUA believes that MDL CRS billing and collection implementation activity negotiated before the pending petitions for modification are formally addressed by a Commission decision(s) may require future modifications based on the outcome of the decision(s), especially as it relates to New MDL, and therefore is better suited for negotiations after the Commission has addressed the issues raised in the petitions.
When CMUA was asked to expand further on why a discussion concerning a potential procedure to collect NBCs from New MDL would not be the best use of time at the meeting, CMUA pointed out that some of the POUs it represents fall under the category of "stand-alone" NMDL,4 which may not bear any CRS responsibility if its petition to modify D. 04-02-062 is granted. Therefore, CMUA felt it was premature to have such a discussion at the April 14th meeting.
Following CMUA, PG&E presented its draft "Municipal Departing Load Billing and Collection Agreement" to the working group, noting that its draft agreement had been structured based on the PG&E/DWR billing and collection agreement that had been negotiated several years back. PG&E asserts that its agreement is an equitable one given the fact that DWR and PG&E had negotiated such an agreement from similar points of strength, and therefore, it represents a good starting point for IOU/POU billing and collection negotiations. As PG&E's attorney went through the draft agreement section by section, she took note of parties' comments and agreed to include such edits in a revised draft. This revised draft is attached to this report as "ATTACHMENT 2."
At the conclusion of PG&E's presentation of its draft MDL billing and collection agreement, the following issues were raised and discussed by the working group participants:
A Pro-Forma Agreement Would Not Address All Issues
CMUA reiterated a point that it had made in one of its talking points - that even though it appreciated PG&E's attempted pro-forma agreement, the fact that the POUs face differing circumstances involving MDL billing and collection should preclude the CPUC and the IOUs from expecting that a generic, pro-forma agreement would satisfactorily address all the billing and collection issues faced by all the POUs. CMUA believes that PG&E's agreement can be used as a starting point, but that key language of any agreement will have to be tailored to the individual POU, via bilateral negotiations between the POU and the IOU.
It Is Infeasible To Consider Modifications Of Each POU's Billing And Collection Systems Until The CRS Amounts And Exemptions Are Known
POU representatives mentioned that it is infeasible to ask the POUs' billing departments to modify their billing and collection systems before the pending petitions are addressed by the Commission, and before the applicable MDL CRS that departing load is obligated to pay is quantified - yearly dollar amounts, exemption dates, and applicable billing loads first need to be known before such implementations can occur.
Reimbursement Cost
Some of the POU representatives questioned PG&E's approach in its draft agreement addressing how the reimbursement of incremental MDL CRS billing and collection costs would be computed by the IOUs and provided to the POUs. POU representatives seemed to be unsure whether such a reimbursement method would recoup all such costs. At least one POU representative mentioned that even if no new work hours were discretely allotted for MDL CRS billing and collection activities by the POUs, this would not reflect the fact that their employees' work load would increase, thereby affecting their other work. The representatives also seemed to question to what extent PG&E would accurately and timely be able to compensate the POUs for such costs.
The POUs Have Different Billing Systems and MDL CRS Applicability
The fact that the POUs have different billing systems means that it would require different amounts of time for the POUs to set up their MDL billing and collection systems. Additionally, POUs have different numbers of applicable customers to bill and collect from. In fact, according to one POU representative, some POUs have only a few departing load customers from whom they may need to collect NBCs, in which case it may be more practical to manually calculate the charges they owe to the IOUs instead of modifying these POUs' entire billing systems.
Concern: The MDL CRS Billing Format and Partial Payments Accounting
PG&E raised its concern regarding how the CRS components would be reflected on a POU's bill. PG&E believes that the CRS components should be itemized along with the other components of the POUs' charges, and not identified or highlighted in a different fashion to somehow suggest to their customers that they can forego paying certain charges.
Additionally, it is uncertain to the Energy Division how partial payments would be dealt with by the POUs. The Commission must be clear on how a partial NBC payment by a POU customer would be accounted for - would the DWR Power Charge and Bond Charge be given priority over the other NBCs, or would a partial payment be allocated evenly among all NBCs? These are questions that need to be answered.
How Would DWR Be Able To Audit The Power and Bond Charge Amounts Submitted To Them?
Does the fact that DWR needs to collect the Bond and Power charges mean that it too needs to set up billing and collection agreements with each POU? If this isn't the case, and these two charges are billed and collected by the IOUs and submitted to DWR, how would DWR be able to verify these amounts? In such a case, would DWR still need to set up an audit agreement with the POUs?
Edison States That It Is Important To Set a Discrete End-Date to The Negotiation Phase
Edison wants to know when MDL CRS billing and collection negotiations can be expected to be either completed or determined not to be a viable option. As it stands, Edison stated that under the July 10, 2003 eligibility date adopted in D.04-12-059, it only has five POUs in its service territory from which it would need to collect the MDL CRS.5
Lack Of POU Representation
POU representatives noted that even though they represent POU umbrella associations in Commission proceedings, they are not in a position to negotiate an MDL CRS billing and collection solution on behalf of each individual POU. CMUA, which stated that it represents about 95% of California's POUs, requested from PG&E that it be forwarded an edited copy of the draft billing and collection agreement so that CMUA can circulate it to the POUs that it represents. CMUA will notify the POUs it represents that they can contact PG&E to initiate billing and collection negotiation discussions.
1 "Motion of the California Municipal Utilities Association for Clarification or, alternatively, Petition to Modify Decision 04-12-059 and related Decision," filed on February 15, 2005.
2 "Petition for Modification of opinion approving a rate design settlement lowering (PG&E's) rates by $799 Million (D. 04-02-062)," filed on February 25, 2005.
3 "Petition of Merced Irrigation District for Modification of D. 04-02-062," filed on February 25, 2005.
4 In its Motion/Petition To Modify D. 04-12-059, CMUA cites Conclusion of Law 12 on page 76 of D. 03-07-028: "In accordance with Section 369, `new load' for purposes of CRS recovery excludes load being met through a direct transaction that does not otherwise require the use of transmission and distribution facilities owned by the IOU."
5 When Edison made this statement at the working group meeting, it did not state whether it was using the definition that it has proposed and not the one that the City of Corona supports.
