Calif. Draft Would Grant Stanford Relief from CRS Charges, But Decline to Adopt Generic Policy

A draft California PUC decision would grant Stanford University a requested waiver of the application of the direct access cost responsibility surcharge (CRS) for certain amounts of its load, but would tailor the decision narrowly to the instant circumstances and decline to set a blanket policy for similar waivers of the cost responsibility surcharge (A.11-10-021).

The waiver relates to the application of the cost responsibility surcharge to generation which was previously supplied by a customer generator, and now is supplied under direct access.

As previously reported, Stanford University requested a modification to Decision 03-04-030 to clarify that loads that were served by customer generation prior to February 1, 2001, and that subsequently switch to direct access (DA) service, are only obligated to pay DA cost responsibility surcharges based on the amount of total annual power consumption previously provided by Pacific Gas & Electric pursuant to a standby contract.

Stanford argued that Pacific Gas & Electric never procured supplies for the load formerly served by the customer generator (except for standby service), and thus, assessing the cost responsibility surcharge to such load does not keep bundled customers indifferent for prior procurement decisions (as intended), but rather unjustly enriches PG&E and bundled customers.

The draft would find that Stanford should be granted a "deviation" from the PG&E tariff as necessary to limit its CRS obligations in the manner requested. Under the draft, Stanford's CRS obligation would reflect only the quantities of electricity previously provided by PG&E bundled stand-by service, to be calculated based on the most recent 36-months of stand-by service prior to Stanford's switch to direct access service.

"Under these specific circumstances, if the normal rules were to apply, which is what PG&E has done so far, Stanford pays CRS not only on (a) the quantity of electricity that it used to get from PG&E but now gets from its DA provider, but also on (b) the quantity of electricity that it used to self-generate, but now gets from its DA provider. However, there is no reason why Stanford should pay CRS on this latter quantity, because none of the costs that are recovered through CRS were ever incurred to serve that load," the draft finds.

However, while the draft acknowledges that this same issue may arise for other customers seeking to fully or partially replace their previously existing or grandfathered self-generation with direct access service, the draft would decline to modify D.03-04-030 or order amendments to the PG&E tariff relating to the CRS.

"In examining Stanford's proposed language to modify D.03-04-030, we found several areas that need revision to more clearly specify how CRS charges should be imposed. As we consider appropriate language to revise the tariff, however, it becomes apparent that the choice of language depends on the specific customer situations that would be covered. However, the only situation about which we have any specific facts is Stanford's situation. Therefore, we decline to develop generic language to modify D.03-04-030 which could, in the absence of a better developed record, potentially produce unintended outcomes," the draft states.

"If it should appear that there a significant number of customers who will find themselves in a situation like Stanford's then we would consider granting more generic relief, i.e. modification of our prior decision, in a separate proceeding with more participation by a greater number of parties," the draft holds.

"Otherwise, if a utility is presented with a customer whose situation seems similar to that of Stanford, the utility may file a request for a deviation from its tariffs by means of a Tier 3 advice letter, which should be served on all parties to the then current, or most recent, ratemaking designated to address direct access and departing load issues," the draft states.