CPUC Trio Limit PG&E Billing, Batter Bark Beetles

By Published On: January 16, 2005

The California Public Utilities Commission?s first meeting of the year, presided over by the three remaining members appointed by former governor Gray Davis, was devoid of controversy. The three sitting commissioners?sans the two new appointees?voted unanimously to approve cost recovery for San Diego?s efforts to remove scores of trees killed by bark beetles and to prohibit Pacific Gas & Electric from back-billing customers for periods greater than three months. The commission?s two newest members, Dian Grueneich and Steve Poizner, have not yet been sworn in by the governor (see sidebar below). Had commission president Mike Peevey and members Susan Kennedy and Geoffrey Brown disagreed on an agenda item, casting a 2-1 vote, the legitimacy would have been in doubt because the majority would not constitute a quorum. Thus, it was no surprise that controversial items were removed from the January 13 meeting agenda. In the short agenda, PG&E was limited to back-billing residential customers for undercharges for a maximum of three months. Untimely bills are also considered ?billing errors.? The utility is required to file a report explaining why there was ?a large number of delayed and estimated bills over the past five years and its plan for reducing the number of these bills,? the decision states. The commission began looking into the matter following a surge in complaints and claims of unjust electricity shutoffs (<i>Circuit</i>, Sept. 10, 2004). The Utility Reform Network has been prodding the commission to conduct a thorough investigation, but the ruling approved this week left a more in-depth proceeding to a later date. San Diego Gas & Electric?s $6 million claim submitted via an advice letter?a pro forma method of getting regulators to approve matters without evidentiary hearings?for removing trees killed by the bark beetle was approved. Trees damaged and killed by the beetles are susceptible to fire, and resultant conflagrations have interfered with the flow of power supplies. However, Paul Clanon, CPUC Energy Division director, urged the commission to require utilities seeking reimbursement of significant claims to submit applications and not advice letters for cost recovery. The commission?s application process allows regulators more specific legal discovery and can better catch double recovery attempts, Clanon noted. Last year, Southern California Edison submitted a claim via an advice letter, and CPUC staff, who had to dig to make sense of the numbers, discovered that the utility had double-billed the commission, he added. The bark beetle infestation is estimated to have destroyed about 1.3 million trees in San Diego County. Because of the extent of the damage, it was categorized as a ?catastrophe.? The three commissioners rejected the Modesto and Merced irrigation districts? challenges to the transition charges imposed by the 1996 deregulation law that extend beyond the March 2002 transition date, which include the costs of QF (qualifying facility) contracts. Garith Krause, Merced Irrigation District general manager, said the charges approved were ?discriminatory,? claiming district customers paid more than direct-access and the utilities? bundled customers. While Krause admitted that the district has an obligation to pay the stranded costs, the dispute is over who pays and how much, he said, adding that the CPUC ruling was not based on law. Also approved was an agreement between Edison and the city of Cerritos setting ground rules for a community-choice aggregation program that will kick in when the Magnolia power plant, constructed in Burbank by a group of Southern California munis, goes on line. The public and private utilities had fought over the interpretation of legislation making way for the community aggregation related to the specific plant. The two agreed to allow Cerritos to provide power to customers who opt in, while limiting the load to 13 MW. The exit fees associated with the departing customers will be on a par with the charge applied to direct-access customers until the CPUC decides on the rate for community aggregators. CPUC executive director Steve Larson announced that Laura Doll, former California Power Authority director, and Clanon will be the commission?s new deputy directors. As the deputy executive director for policy, Doll will handle government affairs and strategic planning; Clanon is to serve as the deputy executive director for administration and operations. Sean Gallagher was appointed acting director of the Energy Division on December 22, 2004. <b>Ceremony for New CPUC Members Delayed</b> For the time being, it appears that the state has scotched swearing-in ceremonies for the California Public Utilities Commission?s two new members. Dian Grueneich and Steve Poizner were scheduled to take their oaths at the Capitol January 11, according to CPUC spokespeople. In response to inquiries last week, the governor?s office said the event was to be private and media not allowed. The swearing-in, however, did not take place. Sources would not comment on the reason for the delay, and the governor?s press office said January 12 it could not confirm or deny the postponement because it had never issued a public announcement on the ceremony in the first place. <i>Jason Mihos also contributed to this report.</i>

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