Milbank Energy Update
October 29, 2002
On October 25, 2002, the California Public Utilities Commission ("CPUC") issued orders relating to generation procurement by the investor-owned utilities (Decision 02-10-062) and the bond surcharge that will be assessed ratepayers for bond-related costs (Decision 02-10-063).
Decision 02-10-063 sets the methodology for calculating the bond charge and determines how those bond charges should be collected from ratepayers. The bond-related costs will be allocated and collected on a simple per kilowatt hour ("kWh") surcharge basis. For 2003, the bond surcharge will total between $0.005 and $0.008 per kWh and, for 2004, the bond surcharge will total between $0.0047 and $0.0069 per kWh. The CPUC explained that setting an exact bond charge can only occur after the details of the bond placement are more clear and DWR has determined more precisely its 2003 bond revenue requirement.
Not everyone will be assessed a bond charge. The decision exempts all medical baseline and CARE-eligible customer usage and SDG&E residential sales below 130% of baseline. Because the CPUC is still examining whether the direct access and/or departing load customers will be held responsible for bond charges in whole or in part, that load was not included for purposes of calculating the bond charge.
The utilities were ordered to implement this decision by November 15, 2002.
With respect to generation procurement, attached hereto is a memorandum prepared by us which addresses the current status of generation procurement.
Regards,
Ed Feo (efeo@milbank.com)
Doug Dunn (mdunn@milbank.com)
Steve Kramer (skramer@milbank.com)
Kevin McSpadden (kmcspadden@milbank.com)
Carla Urquhart (curquhart@milbank.com)
Orlan Johnson (ojohnson@milbank.com)
Jim Liles (jliles@milbank.com)