Calif. Draft Revised Again to Exclude Some Small Commercial Customers from ESP Security Calculation

A fourth revision to a California PUC proposed decision regarding electric service provider security requirements would exclude certain small commercial accounts from triggering heightened security requirements for electric service providers, while also deferring to a subsequent proceeding the definition of small commercial customer (R. 07-05-025).

As only reported by Matters (10/20), the prior draft would have established two tiers of security requirements for electric service providers.

For its large commercial customers, the electric service provider would only be required to post security in an amount required to cover the administrative costs of switching such customers back to bundled service in the event of an electric service provider default.

Such large commercial customers would be required to take the utility's market-based transitional bundled service rate upon their involuntary return to the utility for supply service, and thus, electric service providers would not be required to post security to cover any incremental procurement costs incurred by the utility to serve such involuntarily returned customers.

However, for small commercial and residential customers, the electric service provider would be additionally required to post security reflecting the incremental procurement costs incurred by the utility to serve, at the standard bundled service rate, any small commercial and residential customers returned to utility supply due to the default of an electric service provider.

As noted by Matters in our October 20 story, the previous draft decision did not define the term "small commercial" customer for which the electric service provider would be required to post additional security.

The revised draft does not alter the requirement that electric service provider security shall include incremental procurement costs to serve small commercial and residential customers, but would specify that, "the precise determination and criteria as to how to distinguish small versus large commercial DA [direct access] customers for purposes of the ESP bond calculation," shall be deferred to a subsequent decision.

Additionally, while not defining the term small commercial customer, the revised draft would order that, "For purposes of defining small commercial DA customers applicable to the ESP bond requirements, we shall treat small customers affiliated with a large commercial or industrial DA customer as being subject to the same ESP bond requirements as the large customer."