The Commission's "Preferred Policy Decision " on electric utility industry restructuring, Decision (D.) 95-12-063, as modified by D.96-01-009, adopted a policy framework that assumes potential energy service providers (ESPs) will enter into competitive electric generation markets only if utility generation is unbundled from transmission and distribution. D.97-05-039 found that specific distribution support functions like metering and billing should also be unbundled in order to promote competition in generation markets or "direct access." We have termed such metering and billing services "revenue cycle services."
D.96-10-074 asked parties to evaluate strategies that would provide opportunities for ESPs to compete in markets for revenue cycle services while protecting the integrity of utility systems and operations. In that regard, we found that parties should have "comparable access to the generation market through metering and billing" and that "such access implies fairness to all stakeholders which avoids cost shifting where, for example, lower costs to one group do not mean stranded costs borne by another." Accordingly, we found that competition in metering and billing is not a goal in itself but a means to achieve effective competition in generation markets.
Subsequently, D.97-05-039 identified specific issues for consideration in this proceeding and D.97-11-073 directed Edison, PG&E, and SDG&E to file applications to accomplish the Commission's unbundling objectives. Accordingly, the utilities filed these applications in November and December 1997. Following a Prehearing Conference (PHC) on January 8, 1998, the assigned commissioners issued a ruling which established a procedural schedule and split the proceeding into two phases. Phase I would consider changes to utility billing systems required to implement billing credits by January 1, 1999. Phase II would resolve "the broader merits of the various proposals to distinguish credits by customer segment and examine competing methodologies for calculating those credits."
On July 2, 1998, we issued D.98-07-032 which resolved issues in Phase I of this proceeding. Specifically, D.98-07-032 addressed (1) the number of credit categories for which the utility billing systems must accommodate, (2) the method by which each category will be segmented, (3) the units in which credits will be shown on the customer bill, (4) the appropriate bill format, and (5) the method for prorating credits. The purpose of Phase I of the proceeding was not to approve final revenue cycle services unbundling, but rather to provide direction to Applicants with regard to how their computer and billing systems should be modified in order to accommodate the final resolution of issues in this proceeding. D.97-07-032 adopted requirements for computer and billing system capabilities that ultimately may not be necessary in order for the utilities to comply with the unbundling requirements we adopt today in Phase II.
The Commission held two PHC's which addressed Phase II issues, both of which were presided over by the assigned ALJ and attended by the assigned Commissioners. The Commission held nine days of evidentiary hearings. It held a closing argument attended by the assigned Commissioners. The parties filed briefs on Phase II issues on June 26, 1998 and reply briefs on July 10, 1998. Parties who filed briefs besides the Applicants were Office of Ratepayer Advocates (ORA), The Utility Reform Network and Utility Consumer Action Network (TURN/UCAN), California Energy Commission (CEC), Enron, California Large Energy Consumers Association and California Manufacturers Association (CLECA/CMA), University of California, the California State University and the California Department of General Services (UC/CSU/DGS), Cellnet Data Systems Inc. (Cellnet), Commonwealth Energy Corporation (Commonwealth), Coalition of California Utility Employees (CCUE), California Competition Network (CCN) and California Farm Bureau Federation (Farm Bureau). Consistent with SB 960, this decision is issued less than 18 months from the dates the applications were filed.
