AGENDA

• Objective

• Billing Principles

• Group Discussion
  • Key Issues (A through H)
  • Key Questions
  • SDG&E Strawman

BILLING PRINCIPLES

• Unbundle UDC billing services to enable a competitive energy market and to reduce barriers to entry.
• Balance needs/risks of end-use customers, UDC and retailers (e.g., uncollectibles, cash flow impacts, bankruptcy protection).
• Maintain high level of billing accuracy and confidence among parties.
• UDC is responsible for calculating end-use customer charges for CTC, PGC, local taxes, etc. (i.e., charges based on usage or flat fee).

ISSUES A & B

1. What is the distribution company's billing responsibility and to whom?

   What are the options to distribution company billing?

2. Where there are multiple providers of services to a single customer, who is billing provided for?

ISSUES A & B - KEY QUESTIONS

• Does UDC view retailer or end-use customer as "customer" that UDC is billing?
• Should UDC and/or retailer send bill to end-use customer?
• Should there be state-wide, uniform UDC billing practices (e.g., calculation methodologies)?
• Should there be state-wide, uniform protocols to enable efficient exchange of billing data between retailers, UDC and Power Exchange?
• Should there be rules governing certification of retailers, enrollment and termination of retailer services, changing retailers, etc.?
• Should UDC be able to offer consolidated billing services?
• How will franchise fees be impacted and what will be the resulting impact on local governments?

ISSUES A & B - SDG&E STRAWMAN

1. End-use customers and retailers are both the customers of the UDC for pipes and wire business. The UDC must calculate and bill for UDC services (including franchise fees, taxes, etc.), PGC, and CTC.
2. End-use customers could direct their UDC bills to the retailer of choice.
3. The retailer is responsible for billing any services it provides. The UDC could bill end-use customers for these services.
4. Other parties could offer to consolidate billing on behalf of their customers.
5. A standard format and procedure should be developed for efficient and timely exchange of billing data between retailers, UDC and Power Exchange.

ISSUES C, D, & F

1. How is non-payment of bills addressed?
2. Who is responsible for paying the bill?
3. Who enforces these requirements and bears their risk?

ISSUES C, D, & F - KEY QUESTIONS

• When retailers handle billing and payment processing for end-use customers, should UDC require detailed payment information from retailers so UDC can still maintain records of each end-use customer's payment history?
• When retailers bill end-use customers and include UDC charges, should retailers be responsible for their end-use customers who do not pay?
• Should UDC pursue payment from end-use customers as a final resort for non-payment of UDC charges billed by retailers?
• Is there a need to develop state-wide collection policies and procedures between UDC and retailers, and between retailers and end-use customers (e.g., noticing, collection charges, shutoffs)?
• How are credit issues handled when end-use customers terminate default service, terminate service with retailer, change retailers, etc.?

ISSUES C, D, & F - SDG&E STRAWMAN

3. Retailers will collect any charges due them from end-use customers. UDC will collect any unpaid UDC charges, first from the retailer if the retailer is aggregating payments from its end-use customers, and in the event of retailer default, from the end-use customer and exercise CPUC approved shutoff rights.
4. The "end-use customer of record" and the retailer (if it is aggregating bills and payments) are responsible for payment of any UDC regulated/authorized charges and for all commodity charges.
5. The UDC enforces bill payment by exercising its credit policies and shutoff rights according to CPUC rules. Retailers must be responsible for collection of their value-added services and bear that risk, and retailers who are collecting UDC charges must bear the risk of individual customer's non-payment of these charges. Customers who pay UDC charges through a retailer bear the risk of retailers' failing to forward payments to the UDC.

ISSUE E

What credit requirements are necessary, and from whom?

ISSUE E - KEY QUESTIONS

• How should the security amount be determined? (UDC vs. commodity issues)
• What form of security should be required from retailers (e.g., letters of credit, surety bonds, cash deposits)?
• Should retailers have options for form of security or should one consistent approach be used for all retailers?
• Should security for retailers be administered locally or on a state-wide basis?
• Should security criteria be limited to objective, quantifiable measures? Consistent state-wide? Same as for UDC commercial customers?

ISSUE E - SDG&E STRAWMAN

1. The UDC will require substantial performance guarantees from retailers for UDC charges collected on its behalf.
2. The UDC will apply credit rules as it does now for the end-use customers choosing default UDC service.

ISSUE G

Who addresses customer bill inquiries?

ISSUE G - KEY QUESTIONS

• What customer education requirements are needed (e.g., whom to call for what)?

• How are billing disputes handled?

ISSUE G - SDG&E STRAWMAN

1. The UDC handles all customer bill inquiries for default UDC customers.

2. Retailers who bill end-use customers for UDC services must answer bill inquiries about the services the retailer provides and the services the UDC provides.

ISSUE H - KEY QUESTIONS

• Is state-wide standardization necessary or appropriate for all bills issued to end-use customers?
• Are minimum requirements needed to ensure that billing data and payment terms are communicated to customers?
• How will CPUC-mandated notifications to end-use customers be handled if UDC is not providing bill to end-use customers?
• How will end-use customers be informed of UDC credit policies and their dispute rights (now on back of current UDC bill) if UDC is not providing bill to end-use customers?
• Should there be any requirements for billing frequency to end-use customers?
• Should there be rules governing billings between UDC, retailers and Power Exchange?
• How should data compatibility/communications issues between retailers, UDC and Power Exchange be addressed?

ISSUE H - SDG&E STRAWMAN

1. Paper or Computer Readable Form - Both forms should be available to end-use customers and/or retailers.
2. Minimum Requirements - Yes, when necessary.
3. Standardized Format - No, due to need to offer customers choice. Yes, for data communications.
4. Timeliness (e.g., minimum time to provide to customers, aggregators, marketers, brokers, etc., to allow processing time) - requires a timeliness standard which does not increase the "read to bank" time for UDC.