BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA ) ) ) ) ) ) ) ) )

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1 BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA Order Instituting Rulemaking Regarding Policies, Procedures and Incentives for Distributed Generation and Distributed Energy Resources. Order Instituting Rulemaking to Implement AB 117 Concerning Community Choice Aggregation. Rulemaking (Filed March 16, 2004 Rulemaking (Filed October 2, 2003 RESPONSE OF SOUTHERN CALIFORNIA EDISON COMPANY (U 338-E, SAN DIEGO GAS & ELECTRIC COMPANY AND PACIFIC GAS AND ELECTRIC COMPANY TO THE MOTION OF MICHAEL KYES TO INTERVENE AND TO IMPLEMENT SECTION 366(B MICHAEL D. MONTOYA AMBER E. DEAN Attorneys for SOUTHERN CALIFORNIA EDISON COMPANY 2244 Walnut Grove Avenue Post Office Box 800 Rosemead, California Telephone: ( Facsimile: ( Dated: September 22, 2005

2 BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA Order Instituting Rulemaking to Implement AB117 Concerning Community Choice Aggregation. Order Instituting Rulemaking Regarding Policies, Procedures and Incentives for Distributed Generation and Distributed Energy Resources. Rulemaking (Filed March 16, 2004 Rulemaking (Filed October 2, 2003 RESPONSE OF SOUTHERN CALIFORNIA EDISON COMPANY (U 338-E, SAN DIEGO GAS & ELECTRIC COMPANY AND PACIFIC GAS AND ELECTRIC COMPANY TO THE MOTION OF MICHAEL KYES TO INTERVENE AND TO IMPLEMENT SECTION 366(B Pursuant to Rule 45 of the Commission s Rules of Practice and Procedure and Administrative Law Judge (ALJ Malcolm s September 8, granting Mr. Kyes request to intervene, Southern California Edison Company, San Diego Gas & Electric and Pacific Gas and Electric Company (collectively, the Utilities submit the following Response to the Motion of Michael Kyes to Intervene and to Implement Public Utilities Code Section 366(B. A. Background On October 7, 2005, Michael Kyes filed the subject Motion to Intervene and Motion to Implement Section 366(B (hereinafter, the Motion in both the Community Choice Aggregation rulemaking (R and the Distributed Generation rulemaking (R On September 8, 2005, ALJ Malcolm communicated via that she was granting Mr. Kyes request to intervene; although, it was not clear from the note whether intervention is permitted in both R and R The ALJ s note closes noting that the scope v1-1

3 of R is arguably limited to CCA implementation. For that reason, the ALJ invited responses to the Motion addressing the appropriate forum for consideration of Section 366. B. Given the Suspension of Direct Access, There is No Reason to Consider Further Implementation of Public Utilities Code Section 366 Although one can glean from the title that the purpose of the Motion is to implement Public Utilities Code Section 366(b, the body of the Motion is not as clear. In fact, it is completely unclear what Mr. Kyes is asking the Commission to do. The Motion mentions AB 117, Section 366(b, net metering, public purpose charges, and photovoltaic systems -- all with no coherent connection. Consequently, the Utilities are only able to address what appears to be a request to the Commission to take some action to implement Aggregation under Section 366(b in either the Distributed Generation OIR or the Community Choice Aggregation OIR. The Utilities submit that neither rulemaking is an appropriate forum to take on this issue. Public Utilities Code Section 366 was adopted in 1996 as part of AB That section directs the Commission to take actions as needed to facilitate direct transactions between electricity suppliers and end-use customers. That section further allows customers to aggregate their electrical loads on a voluntary basis. Section 366(b also provides that aggregation of customer electrical loads shall be authorized for all customer classes and may be accomplished by private aggregators, special districts or on any other basis made available by market opportunities. In other words, Section 366 allows for direct transaction (also referred to as direct access and the aggregation of retail load for purposes of direct transactions. In 2001, however, the State suspended direct transaction through the adoption of Section of the Water Code. That Section provides in relevant part: After the passage of such period of time after the effective date of this section as shall be determined by the commission, the right of retail end use customers pursuant to Article 6 (commencing with Section 360 of Chapter 2.3 of Part 1 of Division 1 of the Public Utilities Code to acquire service from other providers shall be suspended until the department no longer supplies power hereunder

4 The only exceptions to the suspension of direct transactions are the Community Aggregation schemes under Section (for the Magnolia Power Project and under Section (Community Choice Aggregation. Both of these exemptions are explicitly provided for in statute. The same is not true for Aggregation under Section 366(b. Thus any further implementation of direct access under Section 366 is suspended until the State Department of Water Resources no longer supplies power. As this milestone is not imminent, the Utilities see no reason to consider, and the Commission has no basis to direct, the implementation of Section 366(b in any proceeding. C. Neither R nor R is an Appropriate Forum For Consideration of Mr. Kyes Request to Implement Public Utilities Code Section 366 Even if the Commission were interested in studying aggregation under Section 366, it should not use R or R as the vehicle. Both proceedings deal with discrete issues that have been clearly articulated. Moreover, the Commission has completed evidentiary hearings in both proceedings and expanding the scope at this point would only serve to distract participating parties and the Commission from focusing on the core issues identified in the respective scoping memos. 1 If and when the Commission feels compelled to take further action to implement the provision of Section 366, the Commission might consider other dockets more related to direct access like R In the meantime, Commission should not take any such action and the Commission should appropriately deny the Motion. Respectfully submitted, 1 A February 3, 2005 scoping memo in R established the scope of Phase 2 to resolve operational issues associated solely with the implementation of Community Choice Aggregation under AB 117. The scoping memo notes that the designated scope of issues was consistent with Rulemaking and D In R , the August 6, 2004 scoping memo focused solely on issues related to distributed generation, including for example the Self Generation Incentive programs and Rule 21 interconnection standards. Direct transactions and aggregation are never mentioned

5 MICHAEL D. MONTOYA AMBER E. DEAN By: Michael D. Montoya Attorneys for SOUTHERN CALIFORNIA EDISON COMPANY 2244 Walnut Grove Avenue Post Office Box 800 Rosemead, California Telephone: ( Facsimile: ( September 22,

6 CERTIFICATE OF SERVICE I hereby certify that, pursuant to the Commission s Rules of Practice and Procedure, I have this day served a true copy of the RESPONSE OF SOUTHERN CALIFORNIA EDISON COMPANY (U 338-E, SAN DIEGO GAS & ELECTRIC COMPANY AND PACIFIC GAS AND ELECTRIC COMPANY TO THE MOTION OF MICHAEL KYES TO INTERVENE AND TO IMPLEMENT SECTION 366(B on all parties identified on the attached service list(s. Service was effected by one or more means indicated below: Transmitting the copies via to all parties who have provided an address. First class mail will be used if electronic service cannot be effectuated. Placing the copies in sealed envelopes and causing such envelopes to be delivered by hand or by overnight courier to the offices of the Commission or other addressee(s. Placing copies in properly addressed sealed envelopes and depositing such copies in the United States mail with first-class postage prepaid to all parties. Directing Prographics to place the copies in properly addressed sealed envelopes and to deposit such envelopes in the United States mail with first-class postage prepaid to all parties. Executed this 22 nd day of September, 2005, at Rosemead, California. Vicki Carr-Donerson Case Analyst SOUTHERN CALIFORNIA EDISON COMPANY 2244 Walnut Grove Avenue Post Office Box 800 Rosemead, California 91770