September 22, 2008 Advice Letter 2224-E

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1 STATE OF CALIFORNIA ARNOLD SCHWARZENEGGER, Governor PUBLIC UTILITIES COMMISSION SAN FRANCISCO, CA September 22, 2008 Advice Letter 2224-E Akbar Jazayeri Vice President, Regulatory Operations Southern California Edison Company P O Box 800 Rosemead, CA Subject: Modification to CCA Notification and Open Season Requirements and CCA Liability for Forecasting Errors Dear Mr. Jazayeri: Advice Letter 2224-E is effective April 9, 2008 Sincerely, Kenneth Lewis, Acting Director Energy Division

2 Akbar Jazayeri Vice President of Regulatory Operations March 10, 2008 ADVICE 2224-E (U 338-E) PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA ENERGY DIVISION SUBJECT: Modification to CCA Notification and Open Season Requirements and CCA Liability for Forecasting Errors In compliance with California Public Utilities Commission (Commission) Decision (D.) , Southern California Edison Company (SCE) hereby submits for filing the following changes to its tariff schedules. The revised tariff sheets are listed on Attachment A and are attached hereto. PURPOSE As directed in D , SCE submits tariff changes to: 1) remove the requirement that customer notifications by Community Choice Aggregators (CCAs) be reviewed and approved by the Commission s Public Advisor; 2) modify the Commencement Date provisions of SCE s Open Season tariff (i.e. Rule 23.2); and 3) remove any references to a requirement that a CCA provide evidence of insurance, self-insurance, or a bond for forecasting errors. BACKGROUND Assembly Bill (AB) 117 enacted in 2002 authorizes cities and counties located within the service territory of an investor owned utility (IOU) the option of procuring power on behalf of citizens and businesses located within their municipal boundaries. This is known as Community Choice Aggregation. The Commission initiated Rulemaking (R.) to implement AB 117. D , as modified by D , had adopted certain procedures and rules to facilitate the creation and implementation of CCAs according to the provisions of AB 117. P.O. Box Walnut Grove Ave. Rosemead, California (626) Fax (626)

3 ADVICE 2224-E (U 338-E) March 10, 2008 Following D , the Commission staff became aware of differing interpretations of the Commission orders dealing with Community Choice Aggregation. One dealt with whether the CCAs were required to submit the customer notifications required before the commencement of Community Choice Aggregation to the Commission s Public Advisor for review and approval. The second dealt with whether a CCA, which had provided a binding notice of intent (BNI), could modify its service commencement date once or multiple times. The assigned Administrative Law Judge (ALJ) issued a ruling on August 3, 2007, proposing changes to the IOUs tariffs to ensure consistency with Commission policy. Comments were received from San Joaquin Valley Power Authority (SJVPA) and jointly by San Diego Gas & Electric Company (SG&E), SCE, and Pacific Gas and Electric Company (PG&E) (together as Joint Utilities ). Subsequently, due to conflicting provisions within D , the assigned ALJ issued a ruling on December 4, 2007, proposing the elimination of references to bond, insurance, and self-insurance for forecasting errors. Comments were received from City and County of San Francisco, SJVPA, SCE, PG&E, and Local Sustainable Energy Coalition. The Commission, in D adopted February 28, 2008, ordered SCE, within ten days of the effective date of the order, to revise its tariffs to reflect the modifications required by the Decision. The SCE tariffs affected by D are: Rule 23 Community Choice Aggregation Rule 23.2 Community Choice Aggregation Open Season PROPOSED CHANGES The following changes to SCE s attached tariffs are made pursuant to D : 1. Removal of tariff provision requiring CCAs to submit customer notices to the Commission for review or approval. 2. Requiring that a new commencement date must not be more than three months after the date specified in the original BNI. 3. Requiring updates to a commencement date later than that stated in the original BNI to be made during SCE s Open Season process at least a year in advance of the original commencement date specified in the BNI. 4. Adding that a BNI date can be changed, at any time, to an earlier date. 5. Removing a provision that CCAs must satisfy credit worthiness standards related to forecasting. No cost information is required for this advice filing.

4 ADVICE 2224-E (U 338-E) March 10, 2008 This advice filing will not increase any rate or charge, cause the withdrawal of service, or conflict with any other schedule or rule. TIER DESIGNATION Pursuant to D , Energy Industry Rule 5.1(1), this advice letter is submitted with a Tier 1 designation. EFFECTIVE DATE This advice filing will become effective on April 9, 2008, the 30 th calendar day after the date filed. NOTICE Anyone wishing to protest this advice filing may do so by letter via U.S. Mail, facsimile, or electronically, any of which must be received no later than 20 days after the date of this advice filing. Protests should be mailed to: CPUC, Energy Division Attention: Tariff Unit 505 Van Ness Avenue San Francisco, California and Copies should also be mailed to the attention of the Director, Energy Division, Room 4004 (same address above). In addition, protests and all other correspondence regarding this advice letter should also be sent by letter and transmitted via facsimile or electronically to the attention of: Akbar Jazayeri Vice President of Regulatory Operations Southern California Edison Company 2244 Walnut Grove Avenue Rosemead, California Facsimile: (626)

5 ADVICE 2224-E (U 338-E) March 10, 2008 Bruce Foster Senior Vice President, Regulatory Affairs c/o Karyn Gansecki Southern California Edison Company 601 Van Ness Avenue, Suite 2040 San Francisco, California Facsimile: (415) There are no restrictions on who may file a protest, but the protest shall set forth specifically the grounds upon which it is based and shall be submitted expeditiously. In accordance with Section 4 of General Order No. (GO) 96-B, SCE is serving copies of this advice filing to the interested parties shown on the attached GO 96-B and R service lists. Address change requests to the GO 96-B service list should be directed by electronic mail to or at (626) For changes to all other service lists, please contact the Commission s Process Office at (415) or by electronic mail at Further, in accordance with Public Utilities Code Section 491, notice to the public is hereby given by filing and keeping the advice filing at SCE s corporate headquarters. To view other SCE advice letters filed with the Commission, log on to SCE s web site at For questions, please contact Thomas Diaz at (626) or by electronic mail at Southern California Edison Company AJ:td:sq Enclosures Akbar Jazayeri

6 CALIFORNIA PUBLIC UTILITIES COMMISSION ADVICE LETTER FILING SUMMARY ENERGY UTILITY MUST BE COMPLETED BY UTILITY (Attach additional pages as needed) Company name/cpuc Utility No.: Southern California Edison Company (U 338-E) Utility type: Contact Person: James Yee! ELC " GAS Phone #: (626) " PLC " HEAT " WATER Disposition Notice to: EXPLANATION OF UTILITY TYPE ELC = Electric GAS = Gas PLC = Pipeline HEAT = Heat WATER = Water (Date Filed/ Received Stamp by CPUC) Advice Letter (AL) #: 2224-E Tier Designation: 1 Subject of AL: Modification to CCA Notification and Open Season Requirements and CCA Liability for Forecasting Errors Keywords (choose from CPUC listing): Compliance AL filing type: " Monthly " Quarterly " Annual! One-Time " Other If AL filed in compliance with a Commission order, indicate relevant Decision/Resolution #: D Does AL replace a withdrawn or rejected AL? If so, identify the prior AL: Summarize differences between the AL and the prior withdrawn or rejected AL 1 : Confidential treatment requested? " Yes! No If yes, specification of confidential information: Confidential information will be made available to appropriate parties who execute a nondisclosure agreement. Name and contact information to request nondisclosure agreement/access to confidential information: Resolution Required? " Yes! No Requested effective date: 4/9/08 No. of tariff sheets: -5- Estimated system annual revenue effect: (%): Estimated system average rate effect (%): When rates are affected by AL, include attachment in AL showing average rate effects on customer classes (residential, small commercial, large C/I, agricultural, lighting). Tariff schedules affected: Service affected and changes proposed 1 : Rule 23, Rule 23.2, and Table of Contents Pending advice letters that revise the same tariff sheets: 1 Discuss in AL if more space is needed.

7 Protests and all other correspondence regarding this AL are due no later than 20 days after the date of this filing, unless otherwise authorized by the Commission, and shall be sent to: CPUC, Energy Division Attention: Tariff Unit 505 Van Ness Ave., San Francisco, CA and Akbar Jazayeri Vice President of Regulatory Operations Southern California Edison Company 2244 Walnut Grove Avenue Rosemead, California Facsimile: (626) Bruce Foster Senior Vice President, Regulatory Affairs c/o Karyn Gansecki Southern California Edison Company 601 Van Ness Avenue, Suite 2040 San Francisco, California Facsimile: (415)

8 Public Utilities Commission 2224-E Attachment A Cal. P.U.C. Sheet No. Title of Sheet Cancelling Cal. P.U.C. Sheet No. Revised E Rules 23 Original E Revised E Rules 23.2 Original E Revised E** Rules 23.2 Original E Original E Revised E Table of Contents Revised E Revised E Table of Contents Revised E 1

9 Southern California Edison Revised Cal. PUC Sheet No E Rosemead, California (U 338-E) Cancelling Original Cal. PUC Sheet No E Rule 23 Sheet 15 COMMUNITY CHOICE AGGREGATION H. CCA CUSTOMER NOTIFICATION PROCESSES 3. The following additional provisions apply to CCA Customer Notifications: a. The CCA and SCE must mutually agree on the date before the CCA s Customer Notification process can begin. b. CCA Customer Notifications may be sent concurrently with SCE s billing cycles. c. Neither CCAs nor SCE shall use the other party s logo on CCA Customer Notifications or other materials absent express written consent to do so. Neither party shall express nor imply that the other party is affiliated with, is a sponsor of, or endorses their services or other programs. d. If a CCA s Automatic Enrollment process is suspended by the CCA, the Commission or any other State agency, the CCA shall be responsible for all SCE costs, including, but not limited to, customer communications associated with the suspension. (D) I. CCA CUSTOMER OPT-OUT PROCESSES Pursuant to PU Code 366.2(13)(A)(i), all CCA Customer Notifications required for automatic enrollments shall include the opportunity for customers to opt-out of CCA Service and continue to receive their existing service. The CCA shall use SCE s opt-out process. All CCA Customer Notifications shall include information necessary for a customer to utilize SCE s optout process, as set forth below. CCAs using notification channels other than those provided by SCE will coordinate such notices with SCE. The following opt-out procedures apply to all participating customers: 1. SCE shall provide an opt-out process to be used by all CCAs. SCE shall offer at least two (2) of the following options as a part of its opt-out process: a. Reply letter or postcard (postage paid) enclosed in CCA Customer Notifications b. Automated phone service c. Internet service d. Customer Call Center contact 2. Customers eligible for Automatic Enrollment in CCA Service must be notified twice during the Initial Notification period. If SCE is aware that a customer or group of customers has not received the required notifications, SCE shall immediately inform the CCA. If the CCA is aware that a customer or group of customers has not received the required notifications the CCA shall immediately inform SCE to remove the customer from Automatic Enrollment. (To be inserted by utility) Issued by (To be inserted by Cal. PUC) Advice 2224-E Akbar Jazayeri Date Filed Mar 10, 2008 Decision Vice President Effective Apr 9, H10 Resolution

10 Southern California Edison Revised Cal. PUC Sheet No E Rosemead, California (U 338-E) Cancelling Original Cal. PUC Sheet No E Rule 23.2 Sheet 3 Community Choice Aggregation Open Season A. CCA Open Season 3. CCA Default on Binding Notice of Intent If the CCA fails to commence service on the date stated in the BNI, or fails to offer service in good faith to all classes of customers stated in that Notice, the CCA will be required to reimburse SCE, upon demonstration in a filing with the Commission, for any incremental costs associated with utility procurement, as described in Section 4 below, resource adequacy penalties, or any other utility costs that are incurred as a result of CCA s default. However, the CCA or its customers will not be subject to any costs incurred by SCE as a result of the CCA's failure to commence service on the date specified if the reason for that non-performance relates to a failure of SCE to meet its commitments to the CCA. 4. Potential Penalties for Deviating From CCA Binding Notice of Intent If the CCA fails to meet its commencement of service date or fails to offer service in good faith to all customer classes stated in the Notice of Intent, SCE shall make a filing with the Commission detailing the incremental costs it incurred as a result of the CCA s failure to fulfill its commitment, for Commission determination of a CCA penalty. The potential penalty to the CCA shall not exceed the would-be transferred load that SCE must continue to serve times the difference between SCE s incremental per kwh cost of acquiring the energy and capacity to serve the load not served by the CCA, and the average cost of SCE s procurement portfolio. This penalty will be calculated on a per day basis for every day that the CCA deviates from the date provided in its BNI. The CCA shall not be entitled to a credit if SCE s per/kwh cost of serving the load not served by the CCA is below the average cost of SCE s procurement portfolio. B. Adjustments to Forecasts In a subsequent Open Season that takes place prior to the CCA commencing service to its customers, the Participating CCA may update its service commencement date, subject to the following conditions: The new commencement date specified in the update BNI must not be more than three (3) months after the date specified in the original BNI. Updates that provide for service through the CCA to commence later than stated in the original BNI must be made during the serving SCE s Open Season process that is held at least a year in advance of the original commencement date in the BNI. A CCA can change its BNI date, at any time, to an earlier date. The change of a BNI to an earlier date does not need to occur during SCE s Open Season process. Any additional costs incurred by the serving utility resulting from this change will be recovered from CCA Service customers and may be allocated to the CCA s CRS. (N) (N) (L) (To be inserted by utility) Issued by (To be inserted by Cal. PUC) Advice 2224-E Akbar Jazayeri Date Filed Mar 10, 2008 Decision Vice President Effective Apr 9, C9 Resolution

11 Southern California Edison Revised Cal. PUC Sheet No E** Rosemead, California (U 338-E) Cancelling Original Cal. PUC Sheet No E E Rule 23.2 Sheet 4 Community Choice Aggregation Open Season B. Adjustments to Forecasts : To the extent the CCA and SCE have collaborated on the load forecast as described above, the CCA and SCE shall provide updates to load forecasting data, such as projected rate or service changes, as they become available in advance of the CCA commencement date. This data shall be used solely to refine the collaborative load forecast when necessary. The CEC may also make adjustments to the CCA s Forecast as part of its review of all Load Serving Entity forecasts in the resource adequacy process. The CCA must satisfy SCE credit worthiness standards (which may include provision of adequate security or other assurance) to cover the amount of any potential penalties. As part of the collaborative forecast process, the parties should explore options for mitigating risks associated with forecasts. Such options could include, but are not limited to, agreeing in advance that the party who has excess power will sell power to the party that is short on power. A CCA does not need to provide evidence of insurance, self-insurance or a bond to cover the costs associated with SCE forecasting errors. (L) (L)(N) (N) C. Open Season Phase-In Requirements In the event a CCA elects to phase-in its service and participate in the Open Season, the CCA shall provide in its BNI the schedule by which it intends to phase-in service which shall include the number of customers for each class to be served per the schedule provided. The CCA shall be required to accept the transfer of customers on the dates provided for each phase of its implementation unless it provides an adjustment in a subsequent Open Season period per Section B above. The CCA load forecast shall reflect the incremental changes in CCA load as a result of phasing implementation. All other provisions of the Open Season tariff, including penalties for default and confidentiality, apply to participating CCAs that elect to phase-in implementation. D. CCA Open Season Participation Confidentiality Due to both the binding nature of the CCA commitment to serve customers on a specified date and the potential penalties a CCA may incur if it fails to fulfill its responsibility to prepare for timely commencement of service under this tariff, there is a potential to create market power for suppliers responding to a CCA s solicitation to provide electric power services. In order to prevent the possibility that participation in this tariff may create market power for potential CCA suppliers, all information concerning CCA participation in this tariff will be confidential and, at the option of the CCA, subject to a nondisclosure agreement. Use of information provided by either the CCA or SCE for purposes of load forecasting shall be limited solely for the purposes of the collaborative load forecast. Access to load forecasting information shall be restricted to authorized CCA/SCE staff assigned to prepare the load forecasts for submission to the CEC, and the Commission and CEC staff assigned to review such forecasts. (To be inserted by utility) Issued by (To be inserted by Cal. PUC) Advice 2224-E Akbar Jazayeri Date Filed Mar 10, 2008 Decision Vice President Effective Apr 9, C13 Resolution

12 Southern California Edison Revised Cal. PUC Sheet No E Rosemead, California (U 338-E) Cancelling Revised Cal. PUC Sheet No E TABLE OF CONTENTS Sheet 1 Cal. P.U.C. Sheet No. TITLE PAGE E TABLE OF CONTENTS - RATE SCHEDULES E TABLE OF CONTENTS - LIST OF CONTRACTS AND DEVIATIONS E TABLE OF CONTENTS - RULES E TABLE OF CONTENTS - BASELINE REGIONS E TABLE OF CONTENTS - SAMPLE FORMS E E PRELIMINARY STATEMENT: A. Territory Served E B. Description of Service E C. Procedure to Obtain Service E D. Establishment of Credit and Deposits E E. General E F. Symbols E G. Gross Revenue Sharing Mechanism E E H. Baseline Service E I. Advanced Metering Infrastructure Balancing Account (AMIBA) E J. NOT IN USE...-E K. Nuclear Decommissioning Adjustment Mechanism E M. Income Tax Component of Contributions E N. Memorandum Accounts E E E E E E O. California Alternative Rates for Energy (CARE) Adjustment Clause E P. Optional Pricing Adjustment Clause (OPAC) E (To be inserted by utility) Issued by (To be inserted by Cal. PUC) Advice 2224-E Akbar Jazayeri Date Filed Mar 10, 2008 Decision Vice President Effective Apr 9, H8 Resolution

13 Southern California Edison Revised Cal. PUC Sheet No E Rosemead, California (U 338-E) Cancelling Revised Cal. PUC Sheet No E TABLE OF CONTENTS Sheet 8 RULES Rule Cal. P.U.C. No. Title of Sheet Sheet No. 1 Definitions E E 2 Description of Service E E 3 Application for Service E 4 Contracts E 5 Special Information Required on Forms E 6 Establishment and Re-establishment of Credit E 7 Deposits E 8 Notices E 9 Rendering and Payment of Bills E 10 Disputed Bills E 11 Discontinuance and Restoration of Service E E 12 Rates and Optional Rates E 13 Temporary Service E 14 Shortage of Supply and Interruption of Delivery E 15 Distribution Line Extensions E E 16 Service Extensions E E 17 Adjustment of Bills and Meter Tests E 18 Supply to Separate Premises and Use by Others E 20 Replacement of Overhead With Underground Electric Facilities E 21 Generating Facility Interconnections E E E E E 22 Direct Access E E E E E 22.1 Switching Exemption Guidelines E 22.2 Direct Access Service for Qualified Nonprofit Charitable Organizations E 23 Community Choice Aggregation E E E E 23.2 Community Choice Aggregation Open Season E (To be inserted by utility) Issued by (To be inserted by Cal. PUC) Advice 2224-E Akbar Jazayeri Date Filed Mar 10, 2008 Decision Vice President Effective Apr 9, H7 Resolution

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