Decision 97-10-057 October 22, 1997
BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA
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Order Instituting Rulemaking on the Commission's Proposed Policies Governing Restructuring California's Electric Services Industry and Reforming Regulation. |
R.94-04-031 (Filed April 20, 1994) |
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Order Instituting Investigation on the Commission's Proposed Policies Governing Restructuring California's Electric Services Industry and Reforming Regulation. |
I.94-04-032 (Filed April 20, 1994) |
(See Appendix A for appearances)
This decision addresses several issues relating to "streamlining" electric utility tariffs and regulatory accounts. We initiated this review in Decision (D.) 96-12-077 which approved the utilities' cost recovery plans pursuant to Assembly Bill (AB) 1890. We herein direct the utilities to eliminate certain regulatory accounts which are no longer useful with the ratemaking changes we have implemented pursuant to AB 1890. We find that AB 1890 does not permit the utilities to accumulate costs incurred during the rate freeze period for the purpose of affecting rates during or following the rate freeze period. We also state our intent to embark on an exploration of the type of ratemaking that will be in place following the rate freeze or transition period.
The Commission is in the process of implementing far-reaching changes in the electric utility industry. Those changes include the development of competition in generation markets and the simplification of ratemaking for utility distribution services. Apparently in recognition of those changes, on November 27, 1996, San Diego Gas & Electric Company (SDG&E) filed Advice Letter 1005-E, which proposed to eliminate a number of balancing and memorandum accounts, including its Energy Cost Adjustment Clause (ECAC) and Electric Revenue Adjustment Mechanism (ERAM). SDG&E sought approval of its proposal by the end of 1996.
Partly in response to SDG&E's advice letter, D.96-12-077 addressed the purpose of ERAM and ECAC mechanisms during the rate freeze period established by AB 1890. The decision recommended that the Energy Division conduct workshops using SDG&E's advice letter as the basis for discussion. D.96-12-077 recognized that an advice letter is not the appropriate procedural forum for initiating far-reaching changes to ratemaking mechanisms or regulatory programs.
Subsequently, the Energy Division held a workshop in this proceeding on February 20, 1997. Participants filed comments on the workshop on March 6, 1997.
Energy Division published a workshop report on April 30, 1997. On May 20, participants filed comments on the workshop report. Among the parties who filed comments on the workshop report are Southern California Edison Company (Edison), Pacific Gas and Electric Company (PG&E), SDG&E, Office of Ratepayer Advocates (ORA), California Industrial Users (CIU), Natural Resources Defense Council (NRDC), The Utility Reform Network (TURN), and the Environmental Defense Fund (EDF).
On August 15, 1997, the assigned Administrative Law Judge (ALJ) issued a ruling which scheduled an informational hearing on August 25, 1997. At the hearing, each utility presented an expert witness who described existing and proposed ratemaking mechanisms in more detail and responded to clarifying questions from the ALJ, Commission staff, and outside parties.
