CPUC Issues Draft Exit Fee Decision

By Loretta Macktal, Executive Assistant to the Vice President, Government Relations

Capitol Update, June 3, 2003 Share this on FacebookTweet thisEmail this to a friend

There is good news and bad news coming out of the California Public Utilities Commission.

The good news is a recent proposed decision by Administrative Law Judge Pulsifer that retains the 2.7 cent per kilowatt hour cap on the direct access cost responsibility surcharge (DA CRS), or exit fee. The bad news is CPUC President Michael Peevey supports increasing the DA CRS cap, and will likely support an alternate decision to do just that.

It is generally anticipated that an alternate decision increasing the DA CRS cap will be unveiled in the next few weeks.

The DA CRS includes:
1) the DWR bond charge;
2) the DWR power charge for DA customers' share of procurement costs between September, 2001 and December, 2002 (the uneconomic portions of DWR costs incurred after DA suspension but after the exit fee decision last fall);
3) the DWR power charge applicable to prospective costs for 2003 (the uneconomic portion of prospective DWR costs); and
4) a charge covering the ongoing above-market portion of utility-retained generation costs. In the CPUC proceeding, CMTA has argued that the record in this case shows that the 2.7 cent per kWh cap best serves the CPUC's goals of avoiding an undue burden on DA customers and providing for recovery of the CRS amounts within a reasonable time frame.

The CPUC will decide next month whether to keep the DA CRS cap at 2.7 cents per kWh, adjust it upward or perhaps even eliminate the cap altogether. It is absolutely imperative that the CPUC retain the 2.7 cent per kWh cap. Increasing or eliminating the cap would make DA uneconomic, thereby eliminating an essential cost-controlling tool for DA customers.
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