Retail Suppliers, Utilities Propose Lottery for Allocating Any Vacated Space Under California Direct Access Cap

Retail suppliers, end users, and California utilities have jointly proposed a lottery process to assign any space which becomes available under the current direct access cap, such as from a current direct access customer leaving direct access service (R. 07-05-025).

The lottery process, which would be conducted annually, would replace the previously used first-come, first-served Notice of Intent periods. Retail suppliers and utilities said that the proposed lottery process would, "foster a level playing field."

The recommended process is supported by the Alliance For Retail Energy Markets, California Manufacturers & Technology Association, Direct Access Customer Coalition, Energy Users Forum, Pacific Gas and Electric, Retail Energy Supply Association, San Diego Gas & Electric, and Southern California Edison Company.

Under the proposed lottery process, direct access customers, or their authorized agent, may submit via email or an online utility form a Six Month Notice of Intent to take direct access, during a prescribed 5-business day window (Submission Period) in the second full business week in April of 2013 for space under the established Overall Direct Access Load Cap that may become available commencing in October of 2013 and continuing through 2014.

Beginning in 2014, the Submission Period would be the second full week in June of each year, for space under the established Overall Load Cap that may become available during the twelve months of the subsequent calendar year.

The Submission Period would begin on Monday at 9:00 a.m. Pacific Time and end on Friday at 5:00 p.m. Pacific Time.

Utilities would review any filed Notices of Intent during a 30-day period after the close of the Submission Period, to verify accuracy and conformance with submission requirements.

By the 30th business day of the review period, each utility would run a "randomizer" tool (Microsoft Access or some other tool agreed-upon by all parties) to assign a random number to each customer's Notice of Intent submission.

The Notices of Intent would then be ordered in sequence by their randomly assigned number and accepted for direct access service, subject to space under the established Overall Load Cap. Remaining Notices of Intent will be placed on a Wait List in the order assigned by randomizer, and will be maintained on that Wait List for the subsequent calendar year until the next enrollment period commences. All Notices of Intent on the Wait List on the last business day of each calendar year will be cancelled and superseded by the following year's Wait List.

Within 10 business days, following the 30-day review period, customers will receive email notification that their Six-Month Notice of Intent has been accepted or placed on the Wait List along with their initial sequence number, based upon the random lottery number.

On the last business day of each month, the utility will determine if there is room under the Overall Load Cap and, if so, notify the first customer on the Wait List that there is available space under the Overall Load Cap:

a) If the available space under the Overall Load Cap is sufficient to accommodate all of the customer's Wait-Listed Service Accounts, the utility will notify the customer of the Direct Access Service Request (DASR) Due Date for each accepted Service Account at least 45 days in advance of the customer's earliest possible switch date. Customers will have 15 business days either to accept or decline the space offered, without penalty. Should the customer decline the space offered, the customer is removed from that year's Wait List and remains on utility bundled service. The utility will then notify the next customer on the list.

b) If the available space under the Overall Load Cap is not sufficient to accommodate all of the customer's Service Accounts on the wait list, the utility will notify the customer at least 45 days in advance of the customer's earliest possible switch date of the eligible Service Account(s) and the earliest possible switch date of the eligible Service Account(s) and will work with the customer to determine the Service Accounts to be switched. The remaining Service Accounts, if any, on the customer's list will remain on the Wait List. Customers will have 15 business days either to accept or decline the space offered, without penalty. Should the customer decline to accept the space offered, the customer is removed from that year's Wait List and remains on utility bundled service.

c) Should a customer accept the offer and fail to submit a DASR by the DASR Due Date, the customer's account(s) will be switched to Transitional Bundled Service and be subject to the then current Switching Exemption Rules.

The utilities and retail suppliers also agreed on new direct access status reporting requirements, and on suggestions contained in a prior working group report.

The agreed-to working group suggestions are: 1) eliminate the Original Direct Access Declaration and Direct Access Load Growth Affidavit; 2) modify the Customer Assignment Affidavit; 3) develop a new Replacement Affidavit; 4) modify the Relocation Affidavit; 5) implement an electronic Direct Access Service Request; and 6) standardize the 6-month Notice Submissions.

Regarding the new direct access status reports, the joint parties propose that the PUC Energy Division should prepare an annual report summarizing the results of the enrollment process for the previous year for each utility. The joint parties propose that the status reports should include information regarding retail customer demand for DA service and the effectiveness of the DA enrollment process, as this information is helpful to determine whether any changes should be made to the enrollment process in the future, and will provide insight regarding the effect of regulatory uncertainty regarding non-bypassable charges and other DA regulatory requirements.

Accordingly, the joint parties propose that the status reports include the following:

1. Number of valid Six-Month Notices submitted by [sic] the utility during the Submission Period. Duplicate Six-Month Notices will not be reported.

2. Amount of DA load, in annual gigawatt-hours, available under the Overall DA Load Cap as of the commencement date of the lottery.

3. Lottery number assigned to the last customer given an opportunity to switch during the year. (Assuming 1, 2, 3...).

4. Number of customers and associated annual gigawatt-hours of customer loads that remained on the waiting list as of December 31 of the previous year.

The utilities will provide the above information to the Energy Division by April 1 of each year, for the previous year, beginning in 2014. The Energy Division is to aggregate the utility information, and issue a status report in May of each year, beginning in 2014.