BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Transcription

1 BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA Application of Pacific Gas and Electric Company for Approval of its Residential Rate Design Window Proposals, including to Implement a Residential Default Time-Of-Use Rate along with a Menu of Residential Rate Options, followed by addition of a Fixed Charge Component to Residential Rates (U39E). And Related Matters. Application No (Filed December 20, 2017) Application No Application No JOINT MOTION OF SOUTHERN CALIFORNIA EDISON COMPANY (U 338-E), THE PUBLIC ADVOCATES OFFICE, THE SOLAR ENERGY INDUSTRIES ASSOCIATION, THE CALIFORNIA SOLAR & STORAGE ASSOCIATION, THE CONSUMER FEDERATION OF CALIFORNIA FOUNDATION, THE NATURAL RESOURCES DEFENSE COUNCIL, AND THE ENVIRONMENTAL DEFENSE FUND FOR APPROVAL OF SETTLEMENT AGREEMENT FADIA R. KHOURY WILLIAM. K. BRIGGS Attorneys for SOUTHERN CALIFORNIA EDISON COMPANY 2244 Walnut Grove Avenue Post Office Box 800 Rosemead, California Telephone: (626) William.K.Briggs@sce.com Dated: December 6, 2018 LIMSO

2 JOINT MOTION FOR APPROVAL OF SETTLEMENT AGREEMENT TABLE OF CONTENTS Section Page I. INTRODUCTION...1 II. PROCEDURAL AND REGULATORY BACKGROUND...3 III. SUMMARY OF POSITIONS AND SETTLEMENT...5 A. SCE s Proposals for Having Two Default Rates and Defaulting Customers to Their Least Cost Rate (Issues A.1 and A.2) SCE s Proposals Responses to SCE s Proposals Settlement of SCE s Proposals...6 B. SCE s Proposals for Periods, Seasons, Rates, Levels, and Bill Impacts for TOU-D-4-9PM and TOU-D-5-8PM (Issues A.1.a and A.1.b) SCE s Proposals Responses to SCE s Proposals Impact of SCE s 2018 GRC Phase 2 Marginal Costs on Rate Levels Settlement of SCE s Proposals...11 C. SCE s Proposal for Seasonal Differentiated Tiered Rates (Issue A.3)...13 IV. REQUEST FOR ADOPTION OF THE SETTLEMENT AGREEMENT...14 A. The Settlement Agreement Is Reasonable In Light Of The Record...15 B. The Settlement Agreement Is Consistent With The Law...18 C. The Settlement Agreement Is In The Public Interest...18 V. PROPOSED SCHEDULE FOR COMMENTS AND SETTLEMENT HEARING...19 VI. CONCLUSION...20 ATTACHMENT A SETTLEMENT AGREEMENT i-

3 JOINT MOTION FOR APPROVAL OF SETTLEMENT AGREEMENT LIST OF FIGURES Figure Page Figure III-1 Schedule TOU-D-4-9PM... 8 Figure III-2 Schedule TOU-D-5-8PM ii-

4 JOINT MOTION FOR APPROVAL OF SETTLEMENT AGREEMENT LIST OF TABLES Table Page Table III-1 Comparison of Settlement Position to Parties Proposed TOU Rate Ratios (4-9 PM) Table III-2 Comparison of Settlement Position to Parties Proposed TOU Rate Ratios (5-8 PM) iii-

5 BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA Application of Pacific Gas and Electric Company for Approval of its Residential Rate Design Window Proposals, including to Implement a Residential Default Time-Of-Use Rate along with a Menu of Residential Rate Options, followed by addition of a Fixed Charge Component to Residential Rates (U39E). And Related Matters. Application No (Filed December 20, 2017) Application No Application No JOINT MOTION OF SOUTHERN CALIFORNIA EDISON COMPANY (U 338-E), THE PUBLIC ADVOCATES OFFICE, THE SOLAR ENERGY INDUSTRIES ASSOCIATION, THE CALIFORNIA SOLAR & STORAGE ASSOCIATION, THE CONSUMER FEDERATION OF CALIFORNIA FOUNDATION, THE NATURAL RESOURCES DEFENSE COUNCIL, AND THE ENVIRONMENTAL DEFENSE FUND FOR APPROVAL OF SETTLEMENT AGREEMENT I. INTRODUCTION Pursuant to Rule 12.1 et seq. of the California Public Utilities Commission s (Commission s) Rules of Practice and Procedure (Rules), seven parties Southern California Edison Company (SCE), the Public Advocates Office at the California Public Utilities Commission (Cal Advocates), 1 the Solar Energy Industries Association (SEIA), the California Solar & Storage Association (CALSSA), the Consumer Federation of California Foundation (CFC Foundation), the Natural Resources Defense Council (NRDC), and Environmental Defense 1 The Office of Ratepayer Advocates was renamed the Public Advocates Office of the Public Utilities Commission pursuant to Senate Bill No. 854, which was signed by the Governor on June 27, 2018 (Chapter 51, Statutes of 2018). 1

6 Fund (EDF) (referred to hereinafter collectively as Settling Parties or individually as Party) jointly request that the Commission find reasonable and adopt the Settlement Agreement Resolving Phase IIB Default TOU and Tiered Rate Design Issues for Southern California Edison Company s 2018 Rate Design Window Application (Settlement Agreement), which is appended to this motion as Attachment A. The Settlement Agreement seeks to resolve the following SCE-specific Phase IIB issues identified in the April 10, 2018 Amended Scoping Memo: (1) Issue A.1, Whether SCE s proposal of two default TOU rates (TOU-D-4-9PM and TOU-D-5-8PM) is reasonable. (2) Issue A.1.a, Whether SCE s proposed TOU rates, levels and bill impacts are reasonable. (3) Issue A.1.b, Whether TOU periods/seasons should align for residential and nonresidential SCE customers. (4) Issue A.2, Whether SCE s proposal to default customers to each customer s least cost rate is reasonable. (5) Issue A.3, Whether SCE s proposal to introduce seasonal differentiation to its Schedule D tiered rate (concurrent with the start of default TOU) is reasonable. Section II of this motion provides the procedural and regulatory background related to this proceeding, which was initiated in December Section III describes in general the rate design positions advocated by parties in this rate design window (RDW) proceeding and summarizes the terms of the Settlement Agreement. Section IV demonstrates that the Settlement Agreement is reasonable in light of the whole record, consistent with law, and in the public interest pursuant to Rule 12.1(d), and that it should be adopted without modification. Section V provides a proposed schedule for comments, and respectfully requests that the Assigned Administrative Law Judges (ALJs) reserve January 7, the first day of Phase IIB evidentiary hearings (currently scheduled for January 7-18), for a settlement panel hearing. 2

7 II. PROCEDURAL AND REGULATORY BACKGROUND Section 3 ( Recitals ) of the Settlement Agreement provides the relevant procedural background, and it is summarized again here for convenience. In Decision (D.) , Decision on Residential Rate Reform for Pacific Gas and Electric Company, Southern California Edison, and San Diego Gas & Electric and Transition to Time-of-Use Rates, the Commission directed SCE, Pacific Gas and Electric Company (PG&E), and San Diego Gas & Electric Company (SDG&E) (collectively, the Investor-Owned Utilities (IOUs)) to each file a RDW application no later than January 1, 2018 that proposed a default TOU rate structure to begin in 2019, assuming that statutory requirements were met. In the same decision, the Commission stated that it agree[d] conceptually... that residential rates should include a seasonal component to reflect differences in cost across the year and directed SCE to explore seasonally differentiated tiered rates in a future filing. 2 On December 21, 2017, SCE filed its RDW Application, and served prepared direct testimony in support thereof, for approval of its 2018 RDW proposals. Among other things, in that 2018 RDW Application, SCE requested that the Commission approve its proposals to implement residential default TOU rates for specified eligible customers and to implement seasonally-differentiated tiered rates. With respect to default TOU rates, SCE proposed two default rates: TOU-D-4-9PM and TOU-D-5-8PM, and requested authorization to transition eligible customers to the lowest cost default TOU rate during the interim default TOU migration (IDTM) period. On January 25, 2018, an ALJ s Ruling Consolidating Proceedings was entered, which consolidated SCE s Application with the RDW applications of PG&E (A ) and SDG&E (A ). PG&E and SDG&E are not parties to this Settlement. Whether by filing a response or protest, or through an approved motion for party status, the following are also parties to this consolidated proceeding: SEIA, the Public Advocates 2 D , p

8 Office, CALSSA, CFC Foundation, NRDC, EDF, The Utility Reform Network (TURN), the Center for Accessible Technology (CforAT), Sierra Club, the Utility Consumers Action Network, the California Choice Energy Authority, East Bay Community Energy, Marin Clean Energy, Sonoma Clean Power, Peninsula Clean Energy, and Silicon Valley Clean Energy. Of the parties to this consolidated proceeding, only SCE, SEIA, the Public Advocates Office, CALSSA, CFC Foundation, NRDC, and EDF are parties to this Settlement. On April 10, 2018, the Assigned Commissioner and Assigned ALJs entered an Amended Scoping Memo setting forth the scope and schedule for Phases II and III of this proceeding. 3 Phase II was scoped to consider the IOUs specific rate design proposals for default TOU and other rate options, as well as implementation issues for default TOU. Phase II was bifurcated into Phase IIA, to primarily focus on SDG&E s rate design proposals and implementation issues, and Phase IIB, to primarily focus on SCE and PG&E s rate design proposals and implementation issues. This Settlement focuses exclusively on Phase IIB rate design issues pertaining to SCE. On July 9, 2018, SCE served prepared amended testimony to correct errors in the prepared direct testimony it had served on December 21, 2017 in support of its Application. Subsequently, on August 17, 2018, SCE served prepared supplemental testimony in support of its Application. On October 26, 2018, the Public Advocates Office, SEIA, TURN, CforAT, CALSSA, EDF, and NRDC served prepared direct testimony concerning (among other issues) rate design issues for SCE s Application. On November 2, 2018, following its review of the October 26 testimony, SCE provided notice to all parties to the consolidated proceeding of its intent to formally hold a settlement conference, and that settlement conference pursuant to Article 12 of the Commission s Rules was held telephonically on November 9, Following that November 9 conference, SCE invited 3 On May 10, 2018, the Commission issued a decision in Phase I of this proceeding that, inter alia, authorized SCE to begin transitioning eligible residential customers to TOU rates beginning October D , Phase I Decision Addressing Timing of Transition to Residential Default Timeof-Use Rates. 4

9 all parties to participate in a follow up settlement conference on November 15, 2018 pursuant to Article 12. III. SUMMARY OF POSITIONS AND SETTLEMENT Appendix A to the Settlement Agreement provides, in tabular form, a matrix showing SCE s RDW rate design proposals, other parties positions, and the settlement outcomes. For the sake of convenience, this section provides a summary of the same. A. SCE s Proposals for Having Two Default Rates and Defaulting Customers to Their Least Cost Rate (Issues A.1 and A.2) 1. SCE s Proposals SCE sought approval of two default TOU rates, TOU-D-4-9PM and TOU-D-5-8PM. These same rates were approved for SCE s Default TOU Pilot in Resolution E TOU-D-4-9PM has a five hour weekday on-peak period from 4:00 pm to 9:00 pm, while TOU-D-5-8PM has a three-hour weekday on-peak period from 5:00 pm to 8:00 pm. SCE requested authorization to retain both default TOU rates and to transition eligible customers to the lowest cost default TOU rate during the IDTM. SCE also proposed to keep its TOU-D-PRIME rate as an optional rate. 4 Additionally, SCE proposed to set TOU-D-4-9PM as the standard TOU rate for all eligible residential customers turning on or transferring service commencing with the IDTM start date, including for NEM 2.0 customers. SCE s survey results from the default pilot showed that customer understanding, satisfaction, and responses were nearly identical for customers who migrated to either TOU-D-4-9PM or TOU-D-5-8PM, and SCE did not find any significant 4 TOU-D-PRIME has a fixed charge of approximately $16 per month and does not have a baseline credit. It serves as an optional rate intended to provide choice and possible bill reductions to higherusage customers, including those with electric vehicles. 5

10 difference in opt-out rates between the two rates. With all else equal, SCE believes that the standard rate at turn on may benefit from aligning with the non-residential TOU rates. 2. Responses to SCE s Proposals No party served testimony opposing SCE s proposals to have two different default rates, to default customers to the lowest cost default TOU rate, and to set TOU-D-4-9PM as the standard TOU rate at turn on or transfer. However, CALSSA, EDF, and NRDC all served testimony supporting the offering of optional TOU rates. EDF and NRDC supported peakier optional rates that would help with wider adoption of beneficial electrification technologies, with NRDC identifying SCEs TOU-D-PRIME rate as a good example of such a rate. CALSSA, on the other hand, supported the offering of an optional TOU rate with milder differentials than the default rates proposed by SCE. 3. Settlement of SCE s Proposals The Settlement Agreement addresses the concerns with optional rates in two primary ways. First, as discussed below in Section III.B.4, the parties agreed to adopt a rate design for TOU-D-4-9PM that is more moderated than proposed by SCE, while simultaneously adopting a rate design for TOU-D-5-8PM that remains peakier than the proposed TOU-D-4-9PM. This allows SCE to provide customers with rate options that address different profiles and needs. Second, under the Settlement Agreement, SCE will keep its TOU-D-PRIME rate as an optional residential rate, as proposed. Thus, concurrent with the start of the IDTM period in October 2020, SCE will offer at least the following residential rates: tiered non-tou, TOU-D-4-9PM, TOU-D-5-8PM, and TOU-D-PRIME. Regarding the uncontested proposals, the Settling Parties agreed that: SCE s proposal to promote TOU-D-4-9PM and TOU-D-5-8PM as default rates for the purpose of transition during IDTM is reasonable. Also, SCE s proposal to set TOU-D-4-9PM as the standard turn on rate for all eligible residential 6

11 customers turning on or transferring service commencing with the IDTM start date is reasonable; SCE s proposal that the TOU-D-4-9PM rate will be the standard rate for all NEM 2.0 customers turning on or transferring service commencing with the IDTM start date, which customers will also be able to switch to a different TOU rate if they so desire, is reasonable; and SCE s proposal to default eligible customers to each customer s least cost rate between TOU-D-4-9PM and TOU-D-5-8PM during the IDTM is reasonable. B. SCE s Proposals for Periods, Seasons, Rates, Levels, and Bill Impacts for TOU-D-4-9PM and TOU-D-5-8PM (Issues A.1.a and A.1.b) 1. SCE s Proposals SCE s two proposed TOU rates are similar with respect to their defined TOU periods and seasons, except for the duration of the on-peak period. Schedule TOU-D-4-9PM reflects the same TOU time periods, seasons, and weekday/weekend definitions that the Commission approved for SCE s non-residential customers in D and which will be implemented for those customers in February Schedule TOU-D-5-8PM is similar to TOU-D-4-9PM, but includes a three hour on-peak period of 5:00 pm to 8:00 pm, instead of the five hour 4:00 pm to 9:00 pm on-peak period that was approved for SCE s non-residential customers. D adopted guidelines that mandate consideration of customer understanding and acceptance and other factors that may justify modification of the Base TOU time periods. 5 To achieve the overall goal of customer satisfaction and acceptance of the TOU rates, SCE moderated the on-peak TOU rates for both TOU-D-4-9PM and TOU-D-5-8PM by recovering 5 D at p. 36 states that [a]lthough the primary input for TOU rates should be the time periods identified through the marginal cost analysis, rate design must take into account customer understanding and acceptance. Any resulting modifications should not stray far from the Base TOU periods and cost of service principles. D at p. 37, states [w]e recognize the importance of promoting customer understanding and acceptance as an essential element in the success of TOU rates in motivating customer to shift energy usage. 7

12 revenue in the winter season that would otherwise be collected during the summer season. As a result, SCE s proposed default rates incorporated only a 2-cent seasonal differential between summer and winter, rather than a true cost-based seasonal differential closer to 6 cents. The purpose of this design was to reduce bill volatility and bill increases in the summer. 6 In addition, both default TOU rates subscribe to the rate design principles adopted in D , including by incorporating a baseline credit. 7 The following figure shows the TOU periods, seasons, and projected rates for Schedule TOU-D-4-9PM and Schedule TOU-D-5-8PM as proposed by SCE in its July 9, 2018 amended testimony (redlines to show changes from SCE s originally filed testimony in December 2017): Figure III-1 Schedule TOU-D-4-9PM 6 SCE intended the structure of TOU-D-4-9PM and TOU-D-5-8PM to be consistent with what the Commission has deemed TOU-Lite rates where the TOU tariff is intended to be revenue neutral with other tariffs for the same customer class and has on and off peak rates set to a specified differential instead of attempting to reflect actual difference in the cost of energy by time period. The purpose of this mild differential is to be an introductory rate that allows for customers to learn and understand the new rate structure before they are subject to differentials that could produce significant rate shock for the unaware. D , at p D , p. 331, Conclusion of Law (COL) 45, We should adopt a baseline credit on any default TOU rate and on at least one available TOU optional rate, as well as any TOU pilot rates. 8

13 Figure III-2 Schedule TOU-D-5-8PM 2. Responses to SCE s Proposals The Public Advocates Office, SEIA, CALSSA, EDF, and NRDC all served testimony addressing SCE s proposed default TOU periods, seasons, rates, levels, and bill impacts, although only the Public Advocates Office and SEIA proposed specific alternatives. 8 On one side, both EDF and NRDC generally approved of SCE s proposed rates and bill impacts. EDF opined that SCE s proposed TOU rates, levels, and bill impacts were reasonable and should be adopted, although EDF indicated that it believed SCE s rate design could be strengthened by higher differentials between peak and off-peak periods and by shorter peak windows in order to achieve more load shifting. Similarly, NRDC, while not objecting to SCE s specific rate ratios, proposed that SCE s rates should be simplified to no more than three TOU periods that are constant throughout the year, even if the prices during those periods change. On the other side, the Public Advocates Office, SEIA, and CALSSA generally opposed SCE s proposed default TOU rates, levels, and bill impacts. CALSSA did not comment on 8 Neither TURN nor CforAT took a position on SCE s specific proposed default TOU periods, seasons, rates, levels, and bill impacts. However, TURN indicated its belief that SCE s proposed TOU-D-4-9PM and TOU-D-5-8PM rates accomplished TOU-lite, while CforAT proposed that unaffordable bill impacts resulting from SCE s proposed default rates could be addressed through additional discretionary exclusions. 9

14 SCE s proposed rates other than to note that the two TOU rates proposed were very similar and did not address different profiles and needs. The Public Advocates Office took the position that the bill volatility resulting from SCE s rates was too severe, and that SCE s approach was inconsistent with SCE s experience implementing default TOU for its non-residential customers. Thus, the Public Advocates Office proposed moderating both SCE s proposed seasonal differential and the rate differentials between TOU periods. SEIA raised two principal concerns: (1) SCE s winter super-off-peak rates were too low; and (2) SCE s proposed default TOU rates were not TOU-lite given the large ratio of SCE s proposed summer on-peak rate to its summer off-peak rate. SEIA thus proposed to reduce the summer on-peak to off-peak rate differential as well as the winter super-off-peak to off-peak rate differential. In the alternative, SEIA proposed that the Commission should instead limit SCE s winter super-off-peak period to the spring months of March through May. 3. Impact of SCE s 2018 GRC Phase 2 Marginal Costs on Rate Levels When SCE first proposed its TOU-D-4-9PM and TOU-D-5-8PM default TOU rates for this proceeding in December 2017 (as described in Section III.B.1 above), SCE relied upon the underlying marginal costs and revenue allocations proposed in its 2018 GRC Errata filing, 9 as well as rate ratios set forth in SCE s Default Pilot Resolution E-4847 (Dated May 12, 2017), which were initially filed in December After SCE received and reviewed the intervenor testimony responding to SCE s rate design proposals on October 26, 2018 (as described in Section III.B.2 above), SCE chose to update the design of its TOU-D-4-9PM and TOU-D-5-8PM TOU rates to reflect updated marginal cost values from its then-pending 2018 GRC Phase 2 settlement. 10 The outcome was that the revised rate designs relying on (updated) GRC Phase 2 settlement-based marginal costs 9 A , Nov. 1, The all-party settlement was later adopted by the Commission in a decision voted out on November 29,

15 (hereinafter GRC Phase 2 settlement-based rates ) were closer to those proposed by SEIA and the Public Advocates Office and made a settlement possible. 4. Settlement of SCE s Proposals The Settlement Agreement addresses the concerns raised by parties as follows. First, the Settling Parties agreed to SCE s proposed alignment of TOU periods and seasons for residential and non-residential customers (with the exception of the shorter on-peak period for TOU-D-5-8-PM). Second, to address the Public Advocates Office and SEIA s concerns with bill volatility (and to better align the rate with SCE s updated cost basis), the Settling Parties agreed to moderate SCE s proposed TOU-D-4-9PM rate by: (1) adjusting the seasonal differential from 2 cents down to 1 cent to align with the Public Advocate Office s proposal; (2) change the winter off-peak to super-off-peak ratio to 1.1 to 1 to align with SEIA s proposal and SCE s updated GRC Phase 2-based rates; and (3) reduce the summer on-peak to off-peak ratio to move closer to both the Public Advocates Office and SEIA s proposals. These changes result in a rate design for TOU-D-4-9PM that has more moderate bill impacts than in SCE s proposal, but that also retains stronger cost-based signals than in the Public Advocates Office and SEIA s proposals. The following table shows the price ratios and seasonal differential for SCE s TOU-D-4-9PM rate that result from these changes and how they compare to the Settling Parties original proposals. 11

16 Table III-1 Comparison of Settlement Position to Parties Proposed TOU Rate Ratios (4-9 PM) SCE Cal Advocates SEIA Settlement Proposed Summer On Summer Mid Summer Off Winter On Winter Off Winter Sup Off Seasonal Differential Third, to address NRDC, EDF, and CALSSA s concerns with the similarity of SCE s two proposed TOU rates and the NRDC and EDF s desire for a peakier (i.e., less moderated) option for customers, the Settling Parties further agreed that, with TOU-D-4-9PM moderated as described above, TOU-D-5-8PM should remain a peakier option for customers. To align with the TOU-D-4-9PM rate, the Settling Parties agreed to adjust the seasonal differential for TOU-D- 5-8PM from the 2 cents proposed by SCE down to 1 cent. Additionally, the Settling Parties agreed to peakier rate ratios. The following table shows the price ratios and seasonal differential for SCE s TOU-D-5-8PM rate that result from these changes and how they compare to the Settling Parties original positions. 12

17 Table III-2 Comparison of Settlement Position to Parties Proposed TOU Rate Ratios (5-8 PM) SCE Cal Advocates SEIA Settlement Proposed Summer On 2.12 None Proposed Summer Mid Summer Off Winter On Winter Off Winter Sup Off Seasonal Differential Finally, with both TOU-D-4-9PM and TOU-D-5-8PM, SCE agreed to not propose to implement any changes to the rate ratios and seasonal differentials earlier than the rates implementing its 2024 General Rate Case Phase 2. C. SCE s Proposal for Seasonal Differentiated Tiered Rates (Issue A.3) SCE also proposed to replace its current Schedule D tiered, non-tou rates with seasonally-differentiated tiered rates in October 2020 concurrent with the rollout of default TOU rates. SCE supports seasonally-differentiated tiered residential rates as a method of introducing customers to rates with greater relation to actual costs to serve than current, non-seasonally differentiated tiered rates. SCE designed the seasonal tiered rates to feature a moderated 13

18 seasonal price signal similar to the seasonal signal provided by SCE s TOU rate structures. Thus, parallel to its default TOU rate proposal, SCE proposed a seasonal differential of 2 cents for its tiered rate. Only the Public Advocates Office and TURN served testimony opposing SCE s proposal. The Public Advocates Office argued that SCE s seasonal tiered rate proposal would subject economically vulnerable customers in hot climate zones to higher summer bills and exacerbate summer bills that are already high. Similarly, TURN objected that SCE s proposal would increase summer bills and remove the possibility for customers to opt out of TOU to a rate that does not cause summer month bill increases. The Settlement Agreement addresses this contested proposal as follows. First, the Settling Parties agreed that SCE would replace its current tiered, non-tou rates with seasonallydifferentiated tiered rates in October 2020 concurrent with the rollout of default TOU rates. However, SCE agreed to incorporate a seasonal differential of only 1 cent into its tiered rates, rather than the 2 cents it had proposed. This satisfies SCE s desires to maintain consistency between its tiered and TOU rates and to provide some measure of cost-based signals to all of its customers. Similarly, this satisfies the Public Advocates Office s desire to reduce bill impacts. Second, SCE agreed to not propose to implement any changes to this 1-cent seasonal differential for SCE s Schedule D tiered rates earlier than the rates implementing its 2024 General Rate Case Phase 2. IV. REQUEST FOR ADOPTION OF THE SETTLEMENT AGREEMENT The Settlement Agreement is submitted pursuant to Rule 12.1 et seq. of the Commission s Rules of Practice and Procedure. The Settlement Agreement is also consistent with Commission decisions on settlements, which express the strong public policy favoring 14

19 settlement of disputes if they are fair and reasonable in light of the whole record. 11 This policy supports many worthwhile goals, including reducing the expense of litigation, conserving scarce Commission resources, and allowing parties to reduce the risk that litigation will produce unacceptable results. 12 As long as a settlement taken as a whole is reasonable in light of the record, consistent with the law, and in the public interest, it should be adopted without change. The Settlement Agreement complies with Commission guidelines and relevant precedent for settlements. The general criteria for Commission approval of settlements are stated in Rule 12.1(d) as follows: The Commission will not approve stipulations or settlements, whether contested or uncontested, unless the stipulation or settlement is reasonable in light of the whole record, consistent with law, and in the public interest. 13 The Settlement Agreement meets the criteria for a settlement pursuant to Rule 12.1(d), as discussed below. A. The Settlement Agreement Is Reasonable In Light Of The Record The record of this proceeding includes SCE s application and protests/responses thereto, and this motion (together with the attached Settlement Agreement). In oral motions at the anticipated evidentiary hearings addressing this settlement and/or the other Phase IIB issues, the Settling Parties will request the admission of all testimony referenced in Section II above. Together, the above documents provide the information necessary for the Commission to find the Settlement Agreement reasonable in light of the record. 11 See, e.g., D (30 CPUC 2d 189, ) and D (40 CPUC 2d, 301, 326). 12 D , 46 CPUC 2d 538, See also, Re San Diego Gas & Electric Company, (D ), 37 CPUC 2d 360: [S]ettlements brought to this Commission for review are not simply the resolution of private disputes, such as those that may be taken to a civil court. The public interest and the interest of ratepayers must also be taken into account and the Commission s duty is to protect those interests. 15

20 As an initial matter, certain rate design issues were uncontested via testimony. Namely, no party opposed the following SCE proposals: (1) to promote TOU-D-4-9PM and TOU-D-5-8PM as default rates for the purpose of transition during IDTM, and to select TOU-D-4-9PM as the standard TOU rate for all eligible residential customers turning on or transferring service commencing with the IDTM start date; (2) to default eligible customers to each customer s least cost rate between TOU-D-4-9PM and TOU-D-5-8PM during the IDTM; and (3) to select TOU- D-4-9PM as the standard rate for all NEM 2.0 customers turning on or transferring service commencing with the IDTM start date, which customers will also be able to switch to a different TOU rate if they so desire. Each of these proposals is also in the best interests of SCE s customers. 14 The Settlement Agreement s adoption of these proposals is thus reasonable in light of the record. Regarding the contested rate design issues, the Settlement Agreement represents a reasonable compromise of the Settling Parties positions. Specifically, with respect to SCE s default TOU rates, the parties reached a compromise by adopting a rate design for TOU-D-4-9PM that is more moderate than proposed by SCE, while simultaneously adopting a rate design for TOU-D-5-8PM that is peakier than proposed by SCE. This allows SCE to provide customers with rate options that better address different profiles and needs. SCE s retention of its TOU-D- PRIME optional TOU rate further serves that purpose and provides customers with another TOU option. With regard to TOU-D-4-9PM (the moderated default TOU rate), the settled rate design is reasonable for a number of reasons. First, by changing the winter on-peak to super-off-peak rate ratio from 1.85 to 1.6, and the winter off-peak to super-off-peak rate ratio from 1.64 to 1.1, the settled rate is more aligned with SCE s Commission-approved GRC Phase 2 settlementbased rates. Second, this settled rate represents a middle ground between the parties positions, as it has higher on-peak rates and stronger cost-based signals than the rates proposed by SEIA 14 See Ex. SCE-05, Chapter VI.A. See also Ex. SCE-01-AM, Chapters IV and XI.G. 16

21 and the Public Advocates Office, but lower on-peak rates and weaker cost-based signals than proposed by SCE. This middle-ground position balances the dual goals of introducing costbased signals to customers while also moderating bill impacts. Third, the reduction of the seasonal differential from the 2 cents per kilowatt hour SCE proposed to 1 cent will serve to further moderate bill impacts and limit seasonal bill volatility. The result of all of these changes is a TOU-lite rate design that balances introducing customers to rates with greater relation to actual costs to serve with keeping the resulting bill impacts modest. The settled rate design for TOU-D-5-8PM (the peakier TOU rate) is also reasonable. Given that SCE will be offering a moderated TOU-D-4-9PM rate, it is reasonable for the TOU- D-5-8PM rate to have peakier rate ratios and stronger cost-based signals than originally proposed by SCE, as this will allow SCE to provide customers with rate options that address different profiles and needs. SCE will be able to default customers who can achieve more load shifting (such as customers with electric vehicles, behind-the-meter energy storage systems, and/or electric heat pump systems for water or space heating) to the peakier TOU-D-5-8PM rate, while defaulting customers who would not benefit on a peakier rate to the more moderate TOU-D-4-9PM. This settled rate design is also more aligned with SCE s Commission-approved GRC Phase 2 settlement-based rates. The Settling Parties resolution of SCE s seasonal differentiated tiered rate proposal is also reasonable. Under the parties agreement, the rates for SCE s tiered rate customers will have greater relation to actual costs to serve. This is consistent with the Commission s guidance in D that the IOUs explore seasonally differentiated rates in a future filing. 15 This agreement is also reasonable because moderating the seasonal differential from the 2 cents per kilowatt hour SCE proposed to 1 cent will reduce seasonal bill volatility and summer bill impacts. 15 D , p

22 Finally, additional support for the reasonableness of the Settling Parties agreement on all of these rate design issues comes from the consistency in the agreed-upon seasonal differential across TOU-D-4-9PM, TOU-D-5-8PM, and SCE s tiered rate, and from the fact that SCE has agreed to not propose to implement any changes to the rate ratios and seasonal differentials agreed to for Schedules TOU-D-4-9PM and TOU-D-5-8PM, or to the seasonal differential agreed to for SCE s Schedule D tiered, non-tou rate, earlier than the rates implementing its 2024 General Rate Case Phase 2. This will provide stability for customers and allow all parties to study how customers are faring under these rate ratios before any further adjustments are proposed. B. The Settlement Agreement Is Consistent With The Law The Settling Parties believe that the terms of the Settlement Agreement comply with all applicable statutes and prior Commission decisions, and reasonable interpretations thereof. In agreeing to the terms of the Settlement Agreement, the Settling Parties have explicitly considered the relevant statutes and Commission decisions and believe that the Commission can approve the Settlement Agreement without violating applicable statutes or prior Commission decisions. C. The Settlement Agreement Is In The Public Interest SCE s seven-party Settlement Agreement is supported by parties that fairly represent the affected interests at stake in this proceeding. 16 As the Commission has found, [w]hile it is true that we employ a heightened focus on the individual elements of a settlement when all interest groups are not accommodated, the focus itself is on whether the settling parties brought to the table representatives of all groups affected by the settlement. This is not necessarily the same as accommodating the litigation positions of all parties. 17 In this instance, the signatories to the SCE Settlement Agreement do represent the interests of residential customers. 16 See D , Order Denying Rehearing of Decision Id. (citing Re Southern California Edison Company, 1996, 64 Cal.P.U.C.2d 241, 267). 18

23 The Settlement Agreement is a reasonable compromise of the Settling Parties respective positions, as summarized in Section III. The Settlement Agreement is in the public interest and in the interest of SCE s customers. It fairly resolves issues and provides more certainty to residential customers regarding their present and future costs, which is in the public interest. The Settlement Agreement, if adopted by the Commission, avoids the cost of further litigation, and frees up Commission resources for other proceedings. Given that the Commission s workload is extensive, the impact on Commission resources is doubly important. The Settlement Agreement frees up the time and resources of other parties as well, so that they may focus on the other issues pending in this proceeding and other proceedings. Each portion of the Settlement Agreement is dependent upon the other portions of the Settlement Agreement. Changes to one portion of the Settlement Agreement would alter the balance of interests and the mutually agreed upon compromises and outcomes which are contained in the Settlement Agreement. As such, the Settling Parties request that the Settlement Agreement be adopted as a whole by the Commission, as it is reasonable in light of the whole record, consistent with law, and in the public interest. V. PROPOSED SCHEDULE FOR COMMENTS AND SETTLEMENT HEARING Evidentiary hearings in Phase IIB of this proceeding are scheduled to take place January 7 through January 18, The Settling Parties respectfully request that the Assigned ALJs reserve the first day of these hearings, January 7, for a hearing where a settlement panel of sponsoring witnesses can be cross-examined by parties opposing the settlement or questioned by the ALJs about this motion and/or the attached Settlement Agreement. Choosing January 7 should be convenient for all parties given that this time has already been reserved for Phase IIB evidentiary hearings. During the 32 days between the filing date of this motion and the start of evidentiary hearings, the parties will be busy preparing and submitting rebuttal testimony (due December 7), 19

24 preparing witnesses and exhibits for the hearings, and celebrating the holiday season. The Settling Parties are also cognizant of the fact that this is not an all-party settlement and that other parties have indicated their intent to oppose this settlement. Given all of these considerations, the Settling Parties do not wish to prejudice the rights of any non-settling party by requesting a reduction in the normal 30 day comment period. However, the Settling Parties also believe that it is imperative that the Commission receive comments prior to the start of evidentiary hearings to avoid delaying those hearings and creating potential scheduling difficulties. Given these considerations, the Settling Parties respectfully request that the Assigned ALJs rule that comments be filed and served on the Friday before hearings are scheduled to begin, January 4, 2018 (29 days from this filing). The Settling Parties anticipated the likelihood of this request for a shortened comment period, and thus shared a draft of the settlement agreement attached hereto with all parties of record for this proceeding on December 5, 2018 (a full 30 days before January 4) in order to avoid prejudicing non-settling parties with this request. In doing so, the Settling Parties asked the non-settling parties to let the Settling Parties know if any party objected to a shortened comment period on the then-anticipated settlement. No party raised an objection. Because, under this proposed schedule, comments will not be received by the Settling Parties until the eve of evidentiary hearings, the Settling Parties respectfully request the opportunity to read or enter brief reply comments into the record at the start of the hearing on this settlement in lieu of filing written reply comments. VI. CONCLUSION WHEREFORE, the Settling Parties respectfully request that the Assigned Commissioner, Assigned ALJs, and the Commission: 1. Approve the attached Settlement Agreement as reasonable in light of the record, consistent with law, and in the public interest; and 20

25 2. Authorize SCE to implement changes in rates and tariffs in accordance with the terms of the Settlement Agreement. Respectfully submitted, FADIA KHOURY WILLIAM K. BRIGGS /s/ William K. Briggs By: William K. Briggs 18 Attorneys for SOUTHERN CALIFORNIA EDISON COMPANY 2244 Walnut Grove Avenue Post Office Box 800 Rosemead, California Telephone: (626) Dated: December 6, Pursuant to Rule 1.8(d) of the Commission s Rules of Practice and Procedure, SCE certifies that it is authorized by the parties listed in the title of this document to sign and tender this document on their behalf. 21

26 Attachment A Settlement Agreement

27 BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA Application of Pacific Gas and Electric Company for Approval of its Residential Rate Design Window Proposals, including to Implement a Residential Default Time-Of- Use Rate along with a Menu of Residential Rate Options, followed by addition of a Fixed Charge Component to Residential Rates (U39E). And Related Matters. Application No (Filed December 20, 2017) Application No Application No SETTLEMENT AGREEMENT RESOLVING PHASE IIB DEFAULT TOU AND TIERED RATE DESIGN ISSUES FOR SOUTHERN CALIFORNIA EDISON COMPANY S (U 338-E) 2018 RATE DESIGN WINDOW APPLICATION Dated: December 6, 2018 LIMS Attachment A-1

28 SETTLEMENT AGREEMENT RESOLVING PHASE IIB DEFAULT TOU AND TIERED RATE DESIGN ISSUES FOR SCE Table of Contents Section Title Page 1. PARTIES DEFINITIONS RECITALS AGREEMENT...7 A. PHASE IIB ISSUES ADDRESSED IN THE SETTLEMENT...7 B. SCE S PROPOSAL OF TWO DEFAULT RATES...8 C. TOU-D-4-9PM RATE DESIGN...8 D. TOU-D-5-8PM RATE DESIGN...11 E. SEASONAL DIFFERENTIATED TIERED RATE...13 F. MENU OF RATE OPTIONS...15 G. ISSUES NOT ADDRESSED IN THIS AGREEMENT IMPLEMENTATION OF SETTLEMENT AGREEMENT RECORD EVIDENCE SIGNATURE DATE REGULATORY APPROVAL COMPROMISE OF DISPUTED CLAIMS NON-PRECEDENT PREVIOUS COMMUNICATIONS INCORPORATION OF COMPLETE SETTLEMENT AGREEMENT NON-WAIVER EFFECT OF SUBJECT HEADINGS GOVERNING LAW NUMBER OF ORIGINALS i- Attachment A-2

29 BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA Application of Pacific Gas and Electric Company for Approval of its Residential Rate Design Window Proposals, including to Implement a Residential Default Time-Of- Use Rate along with a Menu of Residential Rate Options, followed by addition of a Fixed Charge Component to Residential Rates (U39E). And Related Matters. Application No (Filed December 20, 2017) Application No Application No SETTLEMENT AGREEMENT RESOLVING PHASE IIB DEFAULT TOU AND TIERED RATE DESIGN ISSUES FOR SOUTHERN CALIFORNIA EDISON COMPANY'S (U 338-E) 2018 RATE DESIGN WINDOW APPLICATION This Settlement Agreement resolving Phase IIB default TOU and Tiered rate design issues for Southern California Edison Company s (SCE s) 2018 Rate Design Window Application (Settlement Agreement) is entered into by the undersigned Parties hereto, with reference to the following. 1. Parties The Parties to this Settlement Agreement are SCE, the Public Advocates Office at the California Public Utilities Commission (Cal Advocates), 1 the Solar Energy Industries Association (SEIA), the California Solar & Storage Association (CALSSA), the Consumer Federation of California Foundation (CFC Foundation), the Natural Resources Defense Council 1 The Office of Ratepayer Advocates was renamed the Public Advocates Office of the Public Utilities Commission pursuant to Senate Bill No. 854, which was signed by the Governor on June 27, 2018 (Chapter 51, Statutes of 2018). 1 Attachment A-3

30 (NRDC), and the Environmental Defense Fund (EDF) (referred to hereinafter collectively as Settling Parties, or individually as Party). A. SCE is an investor-owned utility and is subject to the jurisdiction of the California Public Utilities Commission (Commission or CPUC) with respect to providing electric service to its CPUC-jurisdictional retail customers. B. The Public Advocates Office is an independent consumer advocate within the Commission that represents the interests of public utility customers. Its goal is to obtain the lowest possible rate for service consistent with reliable, clean, and safe service levels. Pursuant to California Public Utilities Code Section 309.5(a), in revenue allocation and rate design matters, the Public Advocates Office is directed to primarily consider the interests of residential and small commercial customers. C. SEIA is the national trade association of the United States solar industry. Through advocacy and education, SEIA and its 1,000 member companies work to make solar energy a mainstream and significant energy source by expanding markets, removing market barriers, strengthening the industry, and educating the public on the benefits of solar energy. D. CALSSA is a 501(c)(6) not-for-profit solar and storage industry trade association with 500 company members involved in the solar energy and energy storage business in California. The association changed its name from the California Solar Energy Industries Association (CALSEIA) on February 6, CALSSA is an active participant in a number of Commission proceedings addressing state policy as it relates to the use of solar energy products. 2 Attachment A-4

31 E. NRDC is a non-profit membership organization with more than 95,000 California members who have an interest in receiving affordable energy services while reducing the environmental impact of California s energy consumption. NRDC has participated in numerous CPUC proceedings over the last 40 years with a particular focus on representing our California members interest in the utility industry s delivery of cost-effective energy efficiency programs, renewable energy resources, and other sustainable energy alternatives. F. CFC Foundation is a non-profit federation of several organizations, as well as individual members. Organizational members include: consumer groups, senior citizen groups, labor organizations and other organizations that are comprised of California consumers, all of whom are residential customers of California public utilities. CFC Foundation takes a broad view of consumer issues, considering the impact of public policy on the quality and cost of goods and services as well as its effects on working people. G. EDF is a non-profit membership organization engaged in linking science, economics and law to create innovative, equitable and cost-effective solutions to society s most urgent environmental problems. As an organization, EDF has been active in California on environmental issues since the 1970s, and has participated in proceedings on energy related topics at the CPUC since Definitions When used in initial capitalization in this Settlement Agreement, whether in singular or plural, the following terms shall have the meanings set forth below or, if not set forth below, then as they are defined elsewhere in this Settlement Agreement: A. Application or RDW Application means SCE s Rate Design Window Application (A ) for which this Settlement Agreement seeks to resolve default TOU and tiered rate design issues specific to SCE s proposals. 3 Attachment A-5

32 B. Eligible Customers means SCE residential customers who are eligible to be defaulted to TOU rates during the IDTM period pursuant to Public Utilities (P.U.) Code 745, the Commission s decisions in D and D , and the Commission s final decision in Phase IIB of this proceeding. C. EV means electric vehicle. D. Functional SAPC Allocation means allocation of SCE s revenue requirement to each of SCE s rate groups based on the system average percentage change ( SAPC ) for the particular function, e.g., generation, or distribution and customer costs. In addition, this would include adjustments of FERC-jurisdictional transmission revenues as authorized by formula rates or otherwise. E. IDTM means the initial default TOU migration period, which SCE has proposed to be a 15 month period, beginning in October 2020 and ending December F. kwh means kilowatt hour. G. Settlement Agreement shall have the meaning given to such term in the introductory paragraph hereof. H. Settling Parties means SCE, SEIA, the Public Advocates Office, EDF, NRDC, CFC Foundation, and CALSSA. I. TOU means time-of-use. These are the time periods established for provision of electric service in which demand charges for volumetric (energy) rates may vary in relation to the time of day and season in which the utility s costs are incurred. 3. Recitals A. In Decision (D.) , Decision on Residential Rate Reform for Pacific Gas and Electric Company, Southern California Edison, and San Diego Gas & Electric and Transition to Time-of-Use Rates, the Commission directed SCE, Pacific Gas and 4 Attachment A-6

33 Electric Company (PG&E), and San Diego Gas & Electric Company (SDG&E) (collectively, the Investor-Owned Utilities (IOUs)) to each file a residential rate design window (RDW) application no later than January 1, 2018 that proposed a default TOU rate structure to begin in 2019, assuming that statutory requirements set forth in P.U. Code 745 were met. B. On December 21, 2017, SCE filed its RDW Application, and served prepared direct testimony in support thereof, for approval of its 2018 RDW proposals. In that 2018 RDW Application, SCE requested that the Commission approve its proposals to implement residential default TOU rates for specified eligible customers, for SCE s marketing, education, and outreach associated with this transition to default TOU, to implement seasonally-differentiated tiered rates, and to increase SCE s current fixed charges for non-care and CARE customers. With respect to default TOU rates, SCE proposed two default rates: TOU-D-4-9PM and TOU-D-5-8PM, and requested authorization to transition the specified eligible customers to the lowest cost default TOU rate during the IDTM. C. On January 25, 2018, an Administrative Law Judge s Ruling Consolidating Proceedings was entered, which consolidated SCE s Application with the Rate Design Window applications of PG&E, A , and SDG&E, A PG&E and SDG&E are not parties to this Settlement. D. In addition to the IOUs, the following entities are parties to this consolidated proceeding: SEIA, the Public Advocates Office, EDF, NRDC, CFC Foundation, CALSSA, The Utility Reform Network (TURN), the Center for Accessible Technology (CforAT), Sierra Club, the Utility Consumers Action Network (UCAN), and the following CCAs: California Choice Energy Authority (CCEA), East Bay Community Energy, Marin Clean Energy, Sonoma Clean Power, Peninsula Clean Energy, and Silicon Valley Clean Energy (collectively, the CCA Parties). Of 5 Attachment A-7

34 the parties to this consolidated proceeding, only SCE, SEIA, the Public Advocates Office, EDF, NRDC, CFC Foundation, and CALSSA, are parties to this Settlement. E. On April 10, 2018, the Assigned Commissioner and Assigned Administrative Law Judges (ALJs) issued an Amended Scoping Memo setting forth the scope and schedule for Phases II and III of this proceeding. Phase II was scoped to consider the IOUs specific rate design proposals for default TOU and other rate options, as well as implementation issues for default TOU. Phase II was bifurcated into Phase IIA, to primarily focus on SDG&E s rate design proposals and implementation issues, and Phase IIB, to primarily focus on SCE and PG&E s specific rate design proposals and implementation issues. This Settlement focuses exclusively on SCE-specific Phase IIB issues. F. On July 9, 2018, SCE served prepared amended testimony to correct errors in the prepared direct testimony it had served on December 21, 2017 in support of its Application. G. On August 17, 2018, SCE served prepared supplemental testimony in support of its Application. H. On October 26, 2018, the Public Advocates Office, SEIA, TURN, CforAT, CALSSA, EDF, and NRDC served prepared direct testimony concerning (among other issues) rate design issues for SCE s Application. I. On November 2, 2018, SCE provided notice to all parties to the consolidated proceeding of its intent to formally hold a settlement conference, and that settlement conference pursuant to Article 12 of the Commission s Rules of Practice and Procedure was held telephonically on November 9, J. Following that November 9 conference, SCE invited all parties to participate in a follow up settlement conference on November 15, 2018 pursuant to Article Attachment A-8

35 K. The Settling Parties have evaluated the SCE-specific rate design issues specified in Section 4.A of this Settlement, desire to resolve all of those SCE-specific rate design issues, and have reached an agreement as indicated in Section 4 of this Settlement Agreement. L. Appendix A to this Agreement provides a comparison of the Settling Parties positions related to rate design issues that have been resolved by this Agreement. 4. Agreement In consideration of the mutual obligations, covenants and conditions contained herein, the Settling Parties agree to the terms of this Settlement Agreement. Nothing in this Settlement Agreement shall be deemed to constitute an admission by any Party that its position on any issue lacks merit or that its position has greater or lesser merit than the position taken by any other Party. This Settlement Agreement is subject to the express limitation on precedent described in Section 10. A. PHASE IIB ISSUES ADDRESSED IN THE SETTLEMENT The Settling Parties intend the Settlement Agreement to be a complete resolution of the following SCE-specific Phase IIB issues identified in the Amended Scoping Memo: Issue A.1 Whether SCE s proposal of two default TOU rates (TOU-D-4-9PM and TOU-D-5-8PM) is reasonable. Issue A.1.a Whether SCE s proposed TOU rates, levels and bill impacts are reasonable. Issue A.1.b Whether TOU periods/seasons should align for residential and nonresidential SCE customers. Issue A.2 Whether SCE s proposal to default customers to each customer s least cost rate is reasonable. 7 Attachment A-9

36 Issue A.3 Whether SCE s proposal to introduce seasonal differentiation to its Schedule D tiered rate (concurrent with the start of default TOU) is reasonable. B. SCE S PROPOSAL OF TWO DEFAULT RATES The Settling Parties agree as follows: 1) SCE s proposal to have two default TOU rates, TOU-D-4-9PM and TOU-D-5-8PM, during the IDTM, is reasonable; 2) SCE s proposal to transition Eligible Customers to the lowest cost default TOU rate during the IDTM is reasonable; 3) SCE s proposal that the TOU-D-4-9PM rate will be the standard rate for all NEM 2.0 customers turning on or transferring service commencing with the IDTM start date, which customers will also be able to switch to a different TOU rate if they so desire, is reasonable; and 4) SCE s proposal to set TOU-D-4-9PM as the standard TOU rate for all customers turning on or transferring service commencing with the IDTM start date is reasonable. follows: C. TOU-D-4-9PM RATE DESIGN The Settling Parties agree that SCE s Schedule TOU-D-4-9PM will be designed as 8 Attachment A-10

37 1) Schedule TOU-D-4-9PM will reflect the same TOU time periods, seasons, and weekday/weekend definitions that the Commission approved for SCE s nonresidential customers in D ) Schedule TOU-D-4-9PM will reflect the rate ratios and 1 cent per kwh seasonal differential between summer and winter shown in the Settlement column in the following table (which includes SCE, the Public Advocates Office, and SEIA s original proposals for reference): TOU-D-4-9PM SCE Proposed Cal Advocates SEIA Settlement Summer On-Peak Summer Mid-Peak Summer Off-Peak Winter Mid-peak Winter Off-peak Winter Sup. Off-peak Seasonal Differential Attachment A-11

38 Weekdays 1a 2a 3a 4a 5a 6a 7a 8a 9a 10a 11a 12p 1p 2p 3p 4p 5p 6p 7p 8p 9p 10p 11p 12a Jan Feb Mar Apr May Off-Peak 9p-8a 22.9 Super Off-Peak 8a-4p 20.8 Mid-Peak 4p-9p 30.2 Off-Peak 9p-8a 20.8 Jun Off-Peak On-Peak Off-Peak Jul 9p-4p 4p-9p 9p-4p Aug Sep Oct Nov Dec Off-Peak 9p-8a 22.9 Super Off-Peak 8a-4p 20.8 Mid-Peak 4p-9p 30.2 Off-Peak 9p-8a 22.9 Winter Summer Winter 3) Under the above agreed-upon parameters, Schedule TOU-D-4-9PM will have the following seasons, TOU periods, and rates balanced to 2018 revenue requirements: 2 Periods, Seasons and Projected Rates for Default 4-9 Weekends 1a 2a 3a 4a 5a 6a 7a 8a 9a 10a 11a 12p 1p 2p 3p 4p 5p 6p 7p 8p 9p 10p 11p 12a Jan Feb Mar Apr May Off-Peak 9p-8a 22.9 Super Off-Peak 8a-4p 20.8 Mid-Peak 4p-9p 30.2 Off-Peak 9p-8a 22.9 Jun Off-Peak Mid-Peak Off-Peak Jul 9p-4p 4p-9p 9p-4p Aug Sep Oct Nov Dec Off-Peak 9p-8a 22.9 Super Off-Peak 8a-4p 20.8 Mid-Peak 4p-9p 30.2 Off-Peak 9p-8a 22.9 Winter Summer Winter 2 Rate will include a baseline credit of approximately 6.4 per kwh as determined by the tiered rate levels. 10 Attachment A-12

39 4) The rate design for SCE s Schedule TOU-D-4-9PM described above in Section 4.C.1 through 4.C.3 results in reasonable TOU rates and levels. 5) SCE will not propose to implement any changes to the rate ratios and seasonal differentials agreed-to herein for Schedule TOU-D-4-9PM earlier than the rates implementing its 2024 General Rate Case Phase 2. 6) The Settling Parties agree that, taken as a whole, the settled rate design for Schedule TOU-D-4-9PM is reasonable because of the rate s moderated seasonal differentials, rate ratios, seasonal volatility, and bill impacts. D. TOU-D-5-8PM RATE DESIGN The Settling Parties agree that SCE s Schedule TOU-D-5-8PM will be designed as follows: 1) Schedule TOU-D-5-8PM will reflect the same TOU time periods, seasons, and weekday/weekend definitions that the Commission approved for SCE s nonresidential customers in D , except that Schedule TOU-D-5-8PM includes a three hour on-peak period of 5:00 pm to 8:00 pm, instead of the fivehour 4:00 pm to 9:00 pm on-peak period that was approved for SCE s nonresidential customers. 2) Schedule TOU-D-5-8PM will reflect the rate ratios and 1 cent per kwh seasonal differential between summer and winter shown in the Settlement column in the following table (which includes SCE and SEIA s original proposals for reference): 3 3 The Public Advocates Office did not propose ratios for TOU-D-5-8PM. 11 Attachment A-13

40 SCE Proposed SEIA Settlement Summer On-Peak Summer Mid-Peak Summer Off-Peak Winter Mid-Peak Winter Off-Peak Winter Sup. Off-Peak Seasonal Differential ) Under the above agreed-upon parameters, Schedule TOU-D-5-8PM will have the following seasons, TOU periods and rates balanced to 2018 revenue requirements: 4 4 Rate will include a baseline credit of approximately 6.4 per kwh as determined by the tiered rate levels. 12 Attachment A-14

41 Weekdays 1a 2a 3a 4a 5a 6a 7a 8a 9a 10a 11a 12p 1p 2p 3p 4p 5p 6p 7p 8p 9p 10p 11p 12a Jan Feb Mar Apr May Off-Peak 8p-8a 22.9 Super Off-Peak 8a-5p 20.8 Mid-Peak 5p-8p 35.4 Off-Peak 8p-8a 22.9 Jun Off-Peak On-Peak Off-Peak Jul 8p-5p 5p-8p 8p-5p Aug Sep Oct Nov Dec Off-Peak 8p-8a 22.9 Super Off-Peak 8a-5p 20.8 Mid-Peak 5p-8p 35.4 Off-Peak 8p-8a 22.9 Winter Summer Winter Weekends 1a 2a 3a 4a 5a 6a 7a 8a 9a 10a 11a 12p 1p 2p 3p 4p 5p 6p 7p 8p 9p 10p 11p 12a Jan Feb Mar Apr May Off-Peak 8p-8a 22.9 Super Off-Peak 8a-5p 20.8 Mid-Peak 5p-8p 35.4 Off-Peak 8p-8a 22.9 Jun Off-Peak Mid-Peak Off-Peak Jul 8p-5p 5p-8p 8p-5p Aug Sep Oct Nov Dec Off-Peak 8p-8a 22.9 Super Off-Peak 8a-5p 20.8 Mid-Peak 5p-8p 35.4 Off-Peak 8p-8a 22.9 Winter Summer Winter Periods, Seasons and Projected Rates for Default 5-8 4) The rate design for SCE s Schedule TOU-D-5-8PM described above in Section 4.D.1 through 4.D.3 results in reasonable TOU rates and levels. 5) SCE will not propose to implement any changes to the rate ratios and seasonal differentials agreed-to herein for Schedule TOU-D-5-8PM earlier than the rates implementing its 2024 General Rate Case Phase 2. 6) The Settling Parties agree that, taken as a whole, the settled rate design for Schedule TOU-D-5-8PM is reasonable because of the rate s moderated seasonal differentials, rate ratios, seasonal volatility, and bill impacts. E. SEASONAL DIFFERENTIATED TIERED RATE With respect to SCE s seasonal differentiated tiered rate proposal, the Settling Parties agree as follows: 13 Attachment A-15

42 1) SCE will replace its current Schedule D tiered, non-tou rates with seasonally differentiated tiered rates in October 2020 concurrent with the rollout of default TOU rates. 2) Consistent with the Settling Parties agreement on SCE s default TOU rates, SCE s seasonally differentiated tiered rates will have a 1 cent per kwh seasonal differential. 3) Under the above agreed-upon parameters, SCE s seasonal tiered rates expected to be in place in 2020 (balanced to 2018 revenue requirements), are estimated to be: 5 5 Rates designed with 60% baseline as approved in D Attachment A-16