The California Public Utilities Commission issued its final order on unbundling rates for generation, transmission and distribution functions performed by the state's three largest investor-owned utilities on Aug. 1.
The commission also determined how to calculate transition costs and addressed customer billing and education issues. (Decision 97-08-056, Docket A. 96-12-009 et al.)
The utilities affected are Pacific Gas and Electric, San Diego Gas & Electric, and Southern California Edison.
Rates by Function. The PUC identified separate revenue requirements for distribution and allocated costs of those functions to the various customer classes. It also addressed corresponding rate design principles. The distribution revenue requirements are: $1.95 billion for PG&E; $501.6 million for SDG&E; and $1.67 million for SoCalEd.
The PUC still must review performance-based ratemaking plans of SDG&E and SoCalEd. PG&E must file a general rate case later this year, so the PUC deferred final adjustments to total revenues until those cases have been decided.
The PUC rejected the allocation of generation costs to distribution customers, finding that to do so would subject monopoly customers to competitive products costs.
The PUC said that its most recently adopted revenue-allocation method determines marginal costs for each customer class. It then reaches the adopted revenue requirement by adjusting the rate by an equal percent of marginal cost for each class.
SoCalEd proposed applying the "equal percentage of marginal cost" method, based on total revenues instead of by function. The PUC agreed.