Prepared by Barbara Barkovich, CLECA
The meeting was chaired by Jim Price of DRA. Several issues were raised by participants and these were discussed sequentially by the subteam.
The City of Oxnard raised the issue of streetlight buyouts. The City is interested in buying its streetlights for SCE but is concerned about the reason for the difference in customer charges between the LS1 and LS2 tariffs. It was explained that this is a GRC issue and relates to the average number of lamps under each tariff. Because there was a very recent SCE GRC decision, Oxnard was offered some possible procedural approaches to seeking a solution to its concerns about the tariffs (e.g. petition for modification, RDW). It was agreed that this is not a restructuring issue.
Rich Hairston raised the issue of master meter tariffs. The issue is that the tariffs look like residential rate schedules except that they provide for payment of a differential to mobile home park operators and there are conditions describing the relationship between the park operator and the customer. Under restructuring, what in the tariff language should change? Should the provision that requires the park owner to charge the same rate that the utility would charge still apply? This is complicated by a Commission provision that places a constraint on how master-metered customers can recover submetering costs. There is also a relevant state law.
SDG&E said it thought that the master meter credit would be applied to the UDC part of the rate under restructuring and that this would be addressed when tariffs are rewritten. Jim Price said the subteam was the right place to address this issue although it may take a while to resolve it. If billing is made competitive, how do you address the fact that the master meter customer provides billing? Mr. Hairston agreed to draft a preliminary paper on the issue. PG&E said that the passthrough issue should be fairly straightforward once unbundling occurs.
The next issues related to the interaction between restructuring and line extensions. One issue is the provision of meters, the cost of which is included at present in line extensions since the utility is responsible. This could change under restructuring. Another issue is that the size of the extension is related to expected revenues from the customer. If some generation revenues no longer go to the utility, shouldn't the determination of the allowance based on expected revenues change? How much would this be offset by revenue for CTC? The relevant part of CTC is that associated with utility generation-related base rates, since the ECAC revenue requirement is not included in the determination of the allowance.
Developers and other interested in line extension matters that might be concerned with this matter will be notified of this issue through the process of notification of the service list for the restructuring proceeding of the agenda for the upcoming meeting of this subteam.
The next issue was special contracts. Jim Price said that contracts as of 12/20/95 will be honored (as existing) through their expirations. PG&E will extend existing contracts through 1/1/98 and shareholders will pick up the discounts. It is not clear that there is much for the subteam to do with this issue.
The next issue was baseline rate implementation. This was saved for the next subteam meeting.
The next issue, and the one engendering the most discussion, was the future of nonfirm rates under restructuring. SCE said that regarding the five-year termination provision, the interruptible obligation is very likely to be transferred to the ISO so the operation of the program can continue. CLECA said that future options for operating the program under the new market structure are under active discussion, beginning with SCE's rates and operational people. One complication is that each utility has a different set of operating rules for interruptible customers. Does the ISO need to create uniform rules or can it implement the different ones that currently exist? A clearinghouse was suggested to match operational criteria of the 3 utilities to the needs of the ISO and perhaps to enforce current contract terms. The ISO is expected to have only 10 minute notice for non-spinning reserve. Will this work for interruptible customers who currently get 30 minutes notice under the tariff? Since interruptible customers already are being paid to interrupt under their tariffs, they should not be paid again by the ISO as long as the program implementation stays roughly the same. CLECA also said that it expects that the CTC responsibility of interruptible customers should be determined based on the amount of CTC in their current interruptible rates. TURN said it might disagree with this.
Northrop made the point that the freezing of the interruptible incentive by legislation was partly justified by the goal of helping to retain California business and that this should be taken into account in reviewing the program.
CLECA stated that the subteam should be addressing the interruptible program during the transition period to full direct access and that it would have to be reconsidered at that point, once the full impact of restructuring was better known. Certainly in 1998 the new market is unlikely to be fully functional. PG&E noted that at the end of the transition period customers who want to continue to be interrupted could do so through demand bids or bid into the ancillary services auction. Also firm rates will come down once the CTC is largely paid off. PG&E said perhaps there would have to be some reconfiguration of nonfirm contracts to be able to treat nonfirm as nonspinning reserves.
Jim Price said that the current operating rules for nonfirm are grandfathering issues. It is not clear yet when the grandfathering should end. If schedules are closed to new customers, it would simplify the transition. New operating rules could apply to non-grandfathered customers. SDG&E has no customers on its existing interruptible tariffs, and PG&E's tariffs are closed to new signups by existing customers. SCE has an advice letter pending also to close its interruptible schedule to new customers.
PG&E raised 3 questions:
1) how can the contracts be assigned and made most useful?
2) since the UDCs probably won't be operating the program under the new market structure, what will be needed in new or modified contracts to assist the ISO with using interruptible customers for non-spinning reserve? What happens to customers who cannot adjust to transition contracts, if they are created?
3) vis a vis contract termination: