Following are brief summaries of some of ACWA's key energy proceedings:

Electricity Rates Are Changing- Now Is The Time To Prepare

The first in a series of decisions aimed at changing how electricity customers of the state’s investor-owned utilities pay for electricity was adopted June 6, 2003 by the California Public Utilities Commission (CPUC), and it includes opportunities that could be beneficial for water agencies. The utilities have filed advice letters, and these programs are expected to be available by the middle of July.

The CPUC is expected to adopt additional decisions over the coming months in on-going proceedings that will replace some traditional utility tariffs with pricing based on real-time energy costs. The Commission’s goal is to achieve 5 percent of each investor-owned utility’s peak demand by 2007 through participation in the new tariffs. (more info.)

FERC Standard Market Design:

The commission has launched one of the most far-reaching energy regulatory proposals ever. It seeks to establish a basic market design applicable to the entire country. It would replace Independent System Operators of the states (or utility grid operators where there isn't an ISO) with regional operations, each controlling the transmission grid of several states. It would set the rules for how electricity is priced and sold at the wholesale level, and it likely will have a component that will provide significant incentives for users that apply demand management techniques to shift load away from peak periods. The proceeding is in its initial stages and, despite a 600-page announcement, much is still to be revealed about FERC's intentions. FERC has indicated it wants to expedite the process and have parts of the new design in place by early 2003. But there already is significant political pressure to slow the process, both in Congress and from many of the states.

General Rate Cases:

PG&E, Southern California Edison Co. (SCE) and San Diego Gas & Electric Co. (SDG&E) are filing general rate cases with the CPUC. Major changes in current tariff structures are expected as the utilities attempt to get their rates adjusted to reflect current conditions, including higher wholesale costs resulting from long-term contracts entered into with various suppliers by the state on behalf of the utilities and the requirement to provide revenue to the state to repay for the past DWR generation purchases for the utilities. ACWA will participate in those cases to minimize negative impacts on tariffs now available to water suppliers.

Electricity Procurement by the Utilities-A CPUC proceeding (R.01-10-024) is determining the rules that the utilities will be required to follow when (if?) they resume purchasing electric energy, capacity, ancillary services and related hedging instruments to meet their customers needs. In a ruling issued October 24, 2002, CPUC, over the protests of the utilities, ordered PG&E, SCE and San Diego Gas & Electric Co. (SDG&E) to resume their own energy procurement in January 2003. The ruling also provided instructions to the utilities for their short-term and long-term procurement plans. Long-range procurement plans for meeting their customers' resource needs must include distributed and self-generation. The commission deferred action on other issues, including how big a share of the state's cost for the crisis should be borne by consumers who make deals with alternative electricity suppliers as well as those who have or will go to self generation-the so-called "exit-fees," which ACWA opposes

Rate Impacts of PG&E's Reorganization-In R.02-04-026 the CPUC is examining the potential impacts of the PG&E's proposed reorganization and an alternative CPUC plan. ACWA is watching this proceeding.

Demand Side Programs:

The CPUC is considering alternatives for encouraging demand side management programs in proceeding R.02-06-001. This proceeding has spawned an effort co-sponsored by the CPUC, the California Energy Commission and the California Power Authority that is looking at rate structures for encouraging demand side programs to reduce usage during peak periods. ACWA is participating in a workgroup that is looking at rate alternatives that could affect our members in the PG&E service area.