Meeting Objectives: (1) discuss Rate Case Plan (RCP) changes, (2) discuss position papers prepared by the parties on the level of unbundling needs. Jim Price of DRA continued to facilitate the meeting.
Rate Case Plan
1. Three IOUs provided a summary of the rate cases that each has to file in addition to the filing requirements ordered by the Commission's restructuring road map decision.
2. SDG&E proposed to suspend its GRC and associated rate window filings.
The 1997 ECAC filing (ready for 1998 implementation) is probably going to be very different from the current ECAC filings, because CPUC anticipates PX/ISO will be in place in 1998 and UDC customers will pay PX prices for their energy (generation).
There is a need for coordination between the CTC proceeding and the unbundling working group. How the CTCs are handled will impact some of the procedure issues related to the next years' ECACs.
How will the bundled rate customers be ensured "reasonable rates" through the transition?
SCE suggested that it anticipated rates going downward and believes that the ECAC would remain almost the same with the exception that PX and CTC will replace the production costing methods. Even if the PX doesn't work, the bundled rate customers would receive about the same rates as they are today.
Does balancing account protection for the IOUs still make sense when CPUC is anticipating the competitive world to evolve? Doesn't this provide an unfair playing field? What process will create the dynamics to facilitate the market place and promote healthy competition?
Shall the annual balancing account treatment be adjusted on a monthly basis so that the price is closer to real time cost? However, what is the proper way of doing this such that hedging information would not be dominated by the large parties who have superior information and outwit the small customers all the time?
Does traditional cost of service for generation and transmission still have a role in the restructuring world? What technique is needed to determine some kind of cost allocation before real time pricing meters can be installed for all small customers?
1. SCE, SDG&E, DRA, Agland Energy Services, Inc., CIU provided position papers on the Unbundling, track 1/track 2 Issues. WMA briefed parties on its preliminary position at the meeting.
2. Discussion on the unbundling issues:
Mobile home parks believe that there's already a competitive market for billing and metering, which is part of the distribution function right now.
Should market prices for a service be reflected where competition may exist for that service, otherwise recovery the cost based on the traditional way?
Is unbundling certain element going to benefit the ratepayers or not?
The definition of unbundling is also confusing. Are there different sophistication and needs with respect to unbundling for cost studies, for billing, for customer services?
Is it true that the aggregators actually won't be able to fairly compete with the IOUs when the distribution unbundling is not further carried out?
Is it fair to ask the IOUs to expose their costs in the process of detail unbundling while knowing that they would become the targets for competition and may lose their customers? What can the IOUs do and what are they willing to do?
Can we handle all the unbundling requirements? Taking one small element in the gas side as an example, a brokerage fee study took more than one or two years for litigate.
Can the IOUs' current accounting records support a more detail unbundling and cost studies? The FERC accounts cannot be used for the further unbundling.
How can the aggregators be assured that the "true unbundling" of some additional items will actually take place later?
Do the IOUs have advantages because of the current regulatory set up? Taking the credit rating as one example, the IOUs can almost accept any customers while they can spread the uncollectible cost among all customers.
What process can this group use to resolve the unbundling issues? What is this group's identity? Does this group have a clear agenda and deliverables?
1. PG&E proposes no change to its RCP until PBRs and electric restructuring are taking place.
2. SDG&E proposes suspension of its 1999 GRC and associated rate design window filings. It proposes an ECAP to substitute the current ECAC and rate window filing. The ECAP will also allow cost allocation and rate design changes.
3. SCE also proposes suspension of its GRC. It suggests that a combined ECAC/CTC proceedings to substitute the current ECAC, cost allocation and rate design changes. PBR will replace GRCs.
4. SCE and SDG&E will prepare a draft on their proposed RCP modifications. The draft will be circulated among all the parties of this working group such that they can decide if they want to join the motion or not.
5. Parties should discuss further about how to change the ECAC filings including procedure and "scope" after coordination with the CTC proceeding.
6. PG&E proposes a refined schedule for the unbundling and PBR timelines. SCE agrees that this proposed schedule can substitute what SCE handed out at the Commissioner's unbundling scoping workshop. Other parties want to further review and discuss with their clients to see if they can agree with PG&E's new proposal.
7. Parties still disagreed strongly on the track 1 vs track 2 dividing line. At the next meeting, the aggregators are invited to describe more clearly to the parties what they need for the unbundling and why they need it. The accountants of the IOUs shall come and discuss what can be done, or cannot be done. SDG&E is also encouraged to provide a preview of its proposed distribution unbundling details. After parties hear the analysis, if no consensus can be reached, the parties should prepare to seek Commission resolution.
8. Parties invite CACD to continuously participate at these working group meetings such that they can provide more information to the Commission.
9. DRA has served as the note taker for the first three working group meetings. Starting from next meeting, the note taker shall be chosen from the other parties.