Attached is a proposed decision addressing the CEC's two petitions to modify
Decision 01-05-064 (the rate design decision) with respect to Real Time
Pricing.

In its first petition, CEC asked that the Commission clarify that the meters
provided by CEC pursuant to ABX1 29 for customers whose usage is greater
than 200kW at peak demand must be accepted by the customer (i.e.,
installation is mandatory).  In addition, CEC asked that the Commission
remove the language from the decision which requires customers who receive
the meters be shifted to TOU rate schedules.  The PD grants the request in
part, clarifying that  the receipt of the meters is mandatory.  With respect
to mandatory TOU participation for customers who receive the meters, the PD
modifies the language to provide that for customers receiving an RTP meter
who are not already on a TOU schedule the choice of enrolling in a demand
reduction program, rather than being automatically shifted to a TOU schedule
(customers must make this election within 15 days of installation of the
meter or they will be automatically placed on a TOU schedule).

In its second petition, the CEC requested the adoption of a pro forma RTP
tariff.  The PD denies the petition, citing several concerns with the CEC's
proposed tariff.  Chief among the concerns are (1) it is not a true
real-time pricing program because it does not use a transparent real-time
price; (2) the level of complexity in the calculation of the customer
baseline loads; (3) the potential for gaming of the system which would
result in in large amount of payments for load reductions that either would
have occurred anyway or are phantom reductions;(4) the fact that there is no
authorization to make DWR the entity financially responsible for the payment
of incentive costs .

The PD goes on to give the Commission's thoughts as to what a real time
pricing program should look like. Thus the PD states that real time pricing
should be transparent to customers such that they know in advance how the
prices will be calculated.  The calculation should be based on real prices
(or if a forecasted price issues, it should be close enough to real prices
to achieve the proper price signal). The program should be administratively
simple.  The PD suggest that ease o administration argues for programs where
customers are charged a real time price based on actual usage and not by a
comparison of actual usage to either a forecasted or historical load.


The UDCs, and any other party who  wants to, are directed to submit real
time pricing proposals by August 17th which follow the guidance given in the
PD.

Comments on the proposed decision are due on July 26th.

Jeanne Bennett

-----Original Message-----
From: Gallardo, Teresita C. [mailto:tcg@cpuc.ca.gov]
Sent: Thursday, July 19, 2001 4:56 PM
Subject: ALJ Walwyn's Draft Decision in A.00-11-038 et al. - RE Real Time
Pricing Issues and Modifying D.01-05-064



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