Direct Access Exit Fee Stays Put at 2.7 cents per kWh

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

Capitol Update, July 14, 2003 Share this on FacebookTweet thisEmail this to a friend

By a 3-2 vote, the California Public Utilities Commission (CPUC) approved a proposed decision (PD) retaining the 2.7 cents per kilowatthour (kWh) cap on the direct access (DA) cost responsibility surcharge (CRS), or exit fee.

Commissioners Loretta Lynch and Carl Wood voted against the PD, and cast the only two votes in favor of an alternate decision that would have raised the CRS cap to 4.0 cents per kWh.

The DA CRS was established last fall to recover from DA customers their "fair share" of Department of Water Resources (DWR) and utility costs, and includes several components:

* the Department of Water Resources (DWR) bond charge;
* 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);
* the DWR power charge applicable to prospective costs for 2003 (the uneconomic portion of prospective DWR costs); and
* a charge covering the ongoing above-market portion of utility-retained generation costs.

The decision by the CPUC represents a victory of sorts for DA customers inasmuch as an alternate decision supported by Commissioners Lynch and Wood called for a 4.0 cents per kWh cap and both CPUC President Michael Peevey and Commissioner Susan Kennedy had stated on numerous occasions that they supported raising the cap above 2.7 cents per kWh. Still others, including The Utility Reform Network (TURN), called for eliminating the cap.

In the months-long CPUC proceeding, CMTA 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.
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