March 1, 2013 Advice Letter 2841-E

Transcription

1 STATE OF CALIFORNIA PUBLIC UTILITIES COMMISSION SAN FRANCISCO, CA Edmund G. Brown Jr. Governor March 1, 2013 Advice Letter 2841-E Akbar Jazayeri Vice President, Regulatory Operations Southern California Edison Company P O Box 800 Rosemead, CA Subject: Establishment of the GHG Customer Outreach and Education Memorandum Account, the GHG Administrative Costs Memorandum Account, the GHG Revenue Balancing Account and the GHG Cost Sub-Account in Compliance with D Dear Mr. Jazayeri: Advice Letter 2841-E is effective January 22, Sincerely, Edward F. Randolph, Director Energy Division

2 Akbar Jazayeri Vice President of Regulatory Operations January 22, 2013 ADVICE 2841-E (U 338-E) PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA ENERGY DIVISION SUBJECT: Establishment of the GHG Customer Outreach and Education Memorandum Account, the GHG Administrative Costs Memorandum Account, the GHG Revenue Balancing Account and the GHG Cost Sub-Account in Compliance With Decision In compliance with the California Public Utilities Commission s (Commission s or CPUC s) Decision (D.) effective December 20, 2012, Southern California Edison Company (SCE) hereby submits for filing the following changes to its tariff schedules. The revised tariff sheets are listed on Attachment A and are attached hereto. PURPOSE In compliance with D , Ordering Paragraphs (OPs) 19 and 22, this advice filing: (1) revises Preliminary Statement Part N, Memorandum Accounts, to establish the Greenhouse Gas (GHG) Customer Outreach and Education Memorandum Account (GHGCO&EMA) and the GHG Administrative Costs Memorandum Account (GHGACMA); (2) establishes Preliminary Statement Part BB, the GHG Revenue Balancing Account (GHGRBA); (3) modifies Preliminary Statement Part ZZ, Energy Resource Recovery Account (ERRA), to include a GHG cost sub-account and a related definition; and (4) modifies Preliminary Statement Part YY, Base Revenue Requirement Balancing Account (BRRBA), to incorporate changes required as a result of the establishment of the GHGRBA. BACKGROUND The Global Warming Solutions Act of 2006, Assembly Bill (AB) 32, caps California s GHG emissions in 2020 at their 1990 levels. As the agency responsible for implementing AB 32, the California Air Resources Board (CARB) designed a statewide GHG cap-andtrade program. This program creates an economy-wide cap on major sources of GHG emissions, including refineries, power plants, industrial facilities and transportation fuels. P.O. Box Rush Street Rosemead, California (626) Fax (626)

3 ADVICE 2841-E (U 338-E) January 22, 2013 The Commission opened Rulemaking (R.) on March 24, 2011, to address potential utility costs and revenues associated with GHG emissions. D , approved on December 20, 2012, adopts a methodology for allocating GHG allowance revenues received by California s investor-owned utilities (IOUs) 1 as part of California s cap-and-trade program. As part of the adopted GHG allowance revenue allocation methodology, D authorizes the establishment of various ratemaking accounts to track and record GHG-related costs and revenues as discussed below. Customer Outreach and Education Costs For calendar year 2013, D directs the IOUs to develop and administer a competitively neutral customer outreach and education program on behalf of all customers receiving GHG allowance revenues, including customers of Community Choice Aggregators (CCAs) and Direct Access (DA) providers. 2 The goal of the 2013 interim outreach program is to notify and explain to recipients of allowance revenues that they are receiving a credit as a result of California s GHG cap-and-trade program. Outreach efforts can occur through various channels including bill notices, websites, direct customer outreach, and various media outlets, and must occur in advance of and concurrent with the distribution of any GHG allowance revenues. 3 OP 14 of D authorizes SCE to spend up to $1.4 million in 2013 on customer outreach and education activities. 4 For 2014 and beyond, the Commission seeks to expand awareness about the purpose and value of GHG allowance revenues. Therefore, to facilitate this expansion, by April 1, 2013, D requires the IOUs, in consultation with CCAs and DA providers, to engage a firm with marketing and public relations expertise that will be responsible for proposing expanded customer education activities through The cost of the consultant is not to exceed $500,000, with the costs to be borne between PG&E, SCE, and SDG&E in proportion to their percentage of retail sales. OP 16 of D authorizes the use of GHG allowance revenues to fund customer outreach and education efforts related to the GHG allowance revenue allocation methodology adopted in this Decision. GHG customer outreach and education costs are to be tracked in a memorandum account and will be reviewed for reasonableness. In 1 Includes Pacific Gas and Electric Company (PG&E), SCE, San Diego Gas & Electric Company (SDG&E), PacifiCorp, and California Pacific Electric Company. 2 In addition, outreach efforts may extend to customers not receiving GHG allowance revenues, budget permitting. 3 The Commission will need to review the utilities customer outreach and education plans for 2013 in order to ensure that the plans adhere to the guidelines adopted in D Therefore, no later than 30 days after each utility files its implementation plan as set forth in D , the utilities must file Tier 2 advice letters setting forth the scope and estimated timing of their proposed customer outreach activities for To address customer outreach and education in 2014 and beyond, the utilities must file an application by September 1, 2013, setting forth their proposed customer outreach plans for 2014 and 2015, incorporating the results of the consultant s report and including estimated yearly budgets. 4 This budget does not include SCE s share of the costs to hire the marketing and public relations firm described below.

4 ADVICE 2841-E (U 338-E) January 22, 2013 order to ensure that adequate funding is available, the IOUs are directed to set aside a portion of the GHG allowance revenues to cover customer outreach and education costs before distribution of any funds to eligible retail customers. Any remaining customer outreach and education funds at the end of a calendar year must be rolled over for use in subsequent years. Administrative Costs The Commission s adopted GHG allowance revenue allocation methodology will require system and billing upgrades in order to track GHG costs and revenues as well as ongoing administrative costs to distribute revenues to the appropriate customer groups. OP 17 of D authorizes the use of GHG allowance revenues to fund the initial and ongoing administrative costs necessary for the implementation of the GHG allowance revenue allocation methodology adopted in this Decision. GHG administrative costs are to be tracked in a memorandum account and will be subject to reasonableness review. 5 In order to ensure that adequate funding is available, the IOUs are directed to set aside a portion of the GHG allowance revenues to cover administrative costs before distribution of any funds to eligible retail customers. Any remaining administrative funds at the end of a calendar year must be rolled over for use in subsequent years. GHG Costs and Revenues As described in D , if GHG-related energy costs were immediately recoverable in rates before the GHG allowance revenue allocation methodology is implemented, retail customers eligible to receive GHG allowance revenues would see only the cost increase without receipt of any countervailing revenues. Therefore, D defers including in rates both GHG costs and revenues, including interest, for all retail customers (with the exception of Bear Valley Electric Service s customers) until necessary implementation details of the adopted GHG allowance revenue allocation methodology are resolved. OP 20 of D directs the IOUs to record estimated GHG costs for subsequent recovery in rates in a new GHG sub-balancing account of the ERRA. 6 Concurrently, estimated GHG allowance revenues must be recorded and deferred for now in a new GHG Revenue Balancing Account. 7 Once the Commission designates that the adopted GHG allowance revenue allocation methodology is implemented, which will occur upon 5 An estimate and supporting analysis of the up-front and ongoing administrative costs that will be incurred in order to implement the adopted GHG allowance revenue allocation methodology (including any billing system upgrades, etc., that may be necessary) for calendar year 2013 will be provided in the joint implementation report to be filed within 45 days of the effective date of D GHG costs for each compliance year include the GHG compliance costs incurred directly by the IOUs for GHG emissions from their own facilities, contracts where they have assumed the cost of compliance on behalf of a third-party, or associated with electricity imports where the IOU is the compliance entity. In addition, GHG costs include the GHG compliance costs incurred by the IOUs through the GHG costs of electricity purchased in the wholesale market. GHG costs must be deferred based upon approved 2013 cost forecasts in each IOU s 2013 ERRA or Energy Cost Adjustment Clause proceedings. 7 The total amount of GHG allowance revenues that will be available for return to utility ratepayers is wholly dependent upon the market clearing price of GHG allowances and the number of allowances sold at market. The utilities subject to CPUC jurisdiction must consign all of their allowances to auction with the proceeds to be used for the benefit of ratepayers, as determined in D

5 ADVICE 2841-E (U 338-E) January 22, 2013 issuance of a written letter by the Director of the CPUC s Energy Division following the adoption of necessary decisions addressing implementation, as set forth in D , the IOUs may simultaneously begin the prospective allocation of GHG-related costs to all customers and provide GHG allowance revenues to eligible customer classes. The outstanding cost and revenue balances accumulated in the GHG sub-balancing account and the GHG Revenue Balancing Account must then be amortized over a reasonable period so that all deferred costs are recovered and all deferred revenues are distributed within 24 months. PROPOSED TARIFF CHANGES As discussed above and in accordance with OP 19 of D , SCE herein revises Preliminary Statement Part N, Memorandum Accounts, to establish: (1) the GHGCO&EMA to record costs associated with customer outreach and education efforts related to the adopted GHG allowance revenue allocation methodology, including SCE s share of the costs to hire a marketing and public relations firm; and (2) the GHGACMA to record costs associated with initial and ongoing administrative activities necessary for the implementation of the GHG allowance revenue allocation methodology, including any necessary system and billing upgrades in order to track GHG costs and allowance revenues as well as ongoing administrative costs to distribute revenues to the appropriate customer groups. All recorded entries in the GHGCO&EMA and the GHGACMA will be subject to Commission review for reasonableness. Also, as discussed above and in accordance with OP 22 of D , SCE modifies Preliminary Statement Part ZZ, ERRA, to include a GHG cost sub-account to record estimated GHG costs while their recovery through rates is deferred. A definition of Forecast GHG Costs is also added to Preliminary Statement Part ZZ, ERRA, to set forth the amount of GHG costs authorized by the Commission for recovery in each year. In addition, as discussed above and in accordance with OP 22 of D , SCE establishes Preliminary Statement Part BB, the GHGRBA, to record estimated GHG allowance revenues. The GHGRBA will also be used to set forth the methodology for determining the amount of GHG allowance revenues to be returned to eligible customers after taking into account recovery of the customer outreach and education costs and administrative costs. The difference between the amount of GHG allowance revenues actually returned to customers via rates and bill credits, and the actual amount of GHG allowance revenues SCE receives through the cap-and-trade auction will be recorded to GHGRBA. Any over- or under-collection recorded in the GHGRBA at the end of each year will be either added to (i.e., over-collection) or subtracted from (i.e., under-collection) the subsequent year's GHG allowance revenue forecast. Since the return of GHG allowance revenues to eligible customers will be reflected as a reduction in SCE s recorded distribution revenues, the distribution revenues recorded in the distribution sub-account of the BRRBA will need to be adjusted (i.e., increased) to remove the impact of the return of GHG allowance revenues since SCE will account for

6 ADVICE 2841-E (U 338-E) January 22, 2013 the GHG allowance revenues returned to eligible customers in the GHGRBA. As such, Preliminary Statement Part YY, BRRBA, is being modified accordingly. As discussed in D , there are implementation details, including the formulas and timing for returning GHG allowance revenues to Emissions-Intensive, Trade-Exposed (EITE) and small business customers, still to be finalized and adopted by the Commission. Therefore, the tariff language set forth in Preliminary Statement Part BB, GHGRBA, as provided in Attachment A, is in draft form. Upon Commission designation that the adopted GHG allowance revenue allocation methodology is implemented, which will occur upon issuance of a written letter by the Director of the CPUC s Energy Division following the adoption of necessary Commission decisions addressing implementation, SCE will update and file revised preliminary statement language as necessary. No cost information is required for this advice filing. This advice filing will not increase any rate or charge, cause the withdrawal of service, or conflict with any other schedule or rule. TIER DESIGNATION Pursuant to D , OPs 19 and 22, this advice letter is submitted with a Tier 1 designation. EFFECTIVE DATE This advice filing will become effective on January 22, 2013, the date filed. NOTICE Anyone wishing to protest this advice filing may do so by letter via U.S. Mail, facsimile, or electronically, any of which must be received by the Energy Division and SCE no later than 20 days after the date of this advice filing. Protests should be mailed to: CPUC, Energy Division Attention: Tariff Unit 505 Van Ness Avenue San Francisco, California EDTariffUnit@cpuc.ca.gov Copies should also be mailed to the attention of the Director, Energy Division, Room 4004 (same address above). In addition, protests and all other correspondence regarding this advice letter should also be sent by letter and transmitted via facsimile or electronically to the attention of:

7 ADVICE 2841-E (U 338-E) January 22, 2013 Akbar Jazayeri Vice President of Regulatory Operations Southern California Edison Company 8631 Rush Street Rosemead, California Facsimile: (626) AdviceTariffManager@sce.com Leslie E. Starck Senior Vice President c/o Karyn Gansecki Southern California Edison Company 601 Van Ness Avenue, Suite 2030 San Francisco, California Facsimile: (415) Karyn.Gansecki@sce.com There are no restrictions on who may file a protest, but the protest shall set forth specifically the grounds upon which it is based and shall be submitted expeditiously. In accordance with Section 4 of General Order (GO) 96-B, SCE is serving copies of this advice filing to the interested parties shown on the attached GO 96-B and R service lists. Address change requests to the GO 96-B service list should be directed to (626) or by electronic mail at AdviceTariffManager@sce.com. For changes to all other service lists, please contact the Commission s Process office at (415) or by electronic mail at Process_Office@cpuc.ca.gov. Further, in accordance with Public Utilities Code Section 491, notice to the public is hereby given by filing and keeping the advice filing at SCE s corporate headquarters. To view other SCE advice letters filed with the Commission, log on to SCE s web site at For questions, please contact Linda Letizia at (626) or by electronic mail at Linda.Letizia@SCE.com. Southern California Edison Company AJ:ll:sq Enclosures Akbar Jazayeri

8 CALIFORNIA PUBLIC UTILITIES COMMISSION ADVICE LETTER FILING SUMMARY ENERGY UTILITY MUST BE COMPLETED BY UTILITY (Attach additional pages as needed) Company name/cpuc Utility No.: Southern California Edison Company (U 338-E) Utility type: Contact Person: Darrah Morgan ELC GAS Phone #: (626) PLC HEAT WATER Disposition Notice to: EXPLANATION OF UTILITY TYPE ELC = Electric GAS = Gas PLC = Pipeline HEAT = Heat WATER = Water (Date Filed/ Received Stamp by CPUC) Advice Letter (AL) #: 2841-E Tier Designation: 1 Subject of AL: Establishment of the GHG Customer Outreach and Education Memorandum Account, the GHG Administrative Costs Memorandum Account, the GHG Revenue Balancing Account and the GHG Cost Sub-Account in Compliance With Decision Keywords (choose from CPUC listing): AL filing type: Monthly Quarterly Annual One-Time Other Compliance, Balancing Account, Memorandum Account If AL filed in compliance with a Commission order, indicate relevant Decision/ #: D Does AL replace a withdrawn or rejected AL? If so, identify the prior AL: Summarize differences between the AL and the prior withdrawn or rejected AL 1 : Confidential treatment requested? Yes No If yes, specification of confidential information: Confidential information will be made available to appropriate parties who execute a nondisclosure agreement. Name and contact information to request nondisclosure agreement/access to confidential information: Required? Yes No Requested effective date: 1/22/13 No. of tariff sheets: -16- Estimated system annual revenue effect: (%): Estimated system average rate effect (%): When rates are affected by AL, include attachment in AL showing average rate effects on customer classes (residential, small commercial, large C/I, agricultural, lighting). Tariff schedules affected: Service affected and changes proposed 1 : Preliminary Statement Parts N, BB, ZZ and YY and Table of Contents Pending advice letters that revise the same tariff sheets: 2817-E 1 Discuss in AL if more space is needed.

9 Protests and all other correspondence regarding this AL are due no later than 20 days after the date of this filing, unless otherwise authorized by the Commission, and shall be sent to: CPUC, Energy Division Attention: Tariff Unit 505 Van Ness Ave., San Francisco, CA Akbar Jazayeri Vice President of Regulatory Operations Southern California Edison Company 8631 Rush Street Rosemead, California Facsimile: (626) Leslie E. Starck Senior Vice President c/o Karyn Gansecki Southern California Edison Company 601 Van Ness Avenue, Suite 2030 San Francisco, California Facsimile: (415)

10 Public Utilities Commission 2841-E Attachment A Cal. P.U.C. Sheet No. Title of Sheet Cancelling Cal. P.U.C. Sheet No. Revised E Preliminary Statement Part N Revised E Revised E Preliminary Statement Part N Revised E Revised E Preliminary Statement Part N Revised E Original E Preliminary Statement Part N Revised E Original E Original E Original E Original E Preliminary Statement Part BB Preliminary Statement Part BB Preliminary Statement Part BB Preliminary Statement Part BB Revised E Preliminary Statement Part YY Revised E Revised E Preliminary Statement Part ZZ Revised E Revised E Preliminary Statement Part ZZ Revised E Revised E Revised E Preliminary Statement Part ZZ Revised E Original E Preliminary Statement Part ZZ Revised E Table of Contents Revised E Revised E Table of Contents Revised E Revised E Table of Contents Revised E 1

11 Southern California Edison Revised Cal. PUC Sheet No E Rosemead, California (U 338-E) Cancelling Revised Cal. PUC Sheet No E PRELIMINARY STATEMENT Sheet 3 N. MEMORANDUM ACCOUNTS 2. Definitions. d. Specified Project Section Interest Bearing No. Specified Project Memorandum Account* (34) Antelope Transmission Projects Memorandum Account Yes (35) Not Used (36) Wireless Fidelity Costs Memorandum Account Yes (37) Residential Service Disconnection Memorandum Account (RSDMA) Yes (38) Not Used (39) Renewables Portfolio Standard Costs Memorandum Account Yes (40) Greenhouse Gas (GHG) Customer Outreach and Education Yes Memorandum Account (GHGCO&EMA) (41) Market Redesign and Technology Upgrade Memorandum Account Yes (MRTUMA) (42) Department of Energy Litigation Memorandum Account Yes (43) Fuel Cell Program Memorandum Account (FCPMA) Yes (44) Project Development Division Memorandum Account (PDDMA) Yes (45) California Solar Initiative (CSI) Measurement and Evaluation (M&E) Yes Expenses Memorandum Account (CSI M&E MA) (46) Not Used (47) Energy Division Director s Peer Review Group Memorandum Account Yes (PRGMA) (48) Greenhouse Gas (GHG) Administrative Costs Memorandum Yes Account (GHGACMA) (49) Four Corners Memorandum Account Yes (50) Not Used (51) Long-Term Procurement Plan Technical Assistance Yes Memorandum Account (LTAMA) (52) Not Used (53) Fire Hazard Prevention Memorandum Account (FHPMA) Yes (54) San Onofre Nuclear Generating Station Outage Memorandum Yes Account (SONGSOMA) (55) San Onofre Nuclear Generating Station Memorandum Account (SONGSMA) Yes * Interest shall accrue monthly to interest-bearing Memorandum Accounts by applying the Interest Rate to the average of the beginning and ending balance. 3H18

12 Southern California Edison Revised Cal. PUC Sheet No E Rosemead, California (U 338-E) Cancelling Revised Cal. PUC Sheet No E PRELIMINARY STATEMENT Sheet 54 N. MEMORANDUM ACCOUNTS 40. Greenhouse Gas (GHG) Customer Outreach and Education Memorandum Account (GHGCO&EMA) a. Purpose The purpose of the Greenhouse Gas (GHG) Customer Outreach and Education Memorandum Account (GHGCO&EMA) is to record the: (1) 2013 costs, not to exceed $1.4 million, associated with a competitively neutral interim customer outreach and education program to be administered by the investor-owned utilities (IOUs) on behalf of all customers, including CCA and DA customers, (2) costs to engage a firm with marketing and public relations expertise that will be responsible for proposing expanded customer outreach and education activities through 2015, with SCE s costs not to exceed its proportionate share of $500,000, allocated based on percentage of retail sales, and (3) GHG customer outreach and education costs for future year s plans as authorized by the Commission. b. Operation of the GHGCO&EMA Monthly entries to the GHGCO&EMA shall be determined as follows: 1. A debit entry equal to the recorded incremental expenses incurred for GHG customer education and outreach activities, including, but not limited to, outreach through various channels including bill notices, websites, direct customer outreach and various media outlets, not to exceed $1.4 million in 2013, 2. A debit entry equal to the recorded incremental expenses for the distribution to customers of communications from the Commission, upon request from the Director of the Energy Division, providing information about AB32 and the cap-and-trade program, included in the $1.4 million above, 3. A debit entry equal to SCE s proportionate share of up to $500,000 in costs, allocated based on percentage of retail sales, to engage a firm with marketing and public relations expertise that will be responsible for proposing expanded customer outreach and education activities through 2015, not included in the $1.4 million above, (N) (N) 54H20

13 Southern California Edison Revised Cal. PUC Sheet No E Rosemead, California (U 338-E) Cancelling Revised Cal. PUC Sheet No E PRELIMINARY STATEMENT Sheet 55 N. MEMORANDUM ACCOUNTS. 40. Greenhouse Gas (GHG) Customer Outreach and Education Memorandum Account: (GHGCO&EMA) b. Operation of the GHGCO&EMA 4. A debit entry for future years (post-2013) GHG customer outreach and education plan expenses related to activities as authorized by the Commission, and 5. An entry to record interest expense by applying the Interest Rate to the average monthly balance in the GHGCO&EMA. c. Disposition GHG customer outreach and education costs as set forth above are to be funded by GHG allowance revenues through the operation of the GHG Revenue Balancing Account commencing with the implementation of a Commission-adopted GHG revenue allocation methodology. Any remaining customer outreach and education funds at the end of a calendar year must be rolled over for use in subsequent years. d. Review Procedures Pursuant to D , reasonableness of amounts recorded in the GHGCO&EMA shall be determined in annual August 1 st GHG Cost and Revenue Forecast and Reconciliation Proceedings. (N) (N) 55H18

14 Southern California Edison Original Cal. PUC Sheet No E Rosemead, California (U 338-E) Cancelling Revised Cal. PUC Sheet No E PRELIMINARY STATEMENT Sheet 64 N. MEMORANDUM ACCOUNTS. 48. Greenhouse Gas (GHG) Administrative Costs Memorandum Account (GHGACMA) a. Purpose The purpose of the Greenhouse Gas (GHG) Administrative Costs Memorandum Account (GHGACMA) is to record the initial and on-going administrative costs incurred in order to implement the Commission-adopted GHG revenue allocation methodology, pursuant to D b. Operation of the GHGACMA Monthly entries to the GHGACMA shall be determined as follows: 1. Debit entries equal to the recorded Operation and Maintenance (O&M) and capital-related revenue requirements incurred for all incremental administrative activities SCE is required to undertake to implement the Commission-adopted GHG allowance revenue allocation methodology. The capital-related revenue requirements shall include depreciation expense, return on rate base, federal and state income taxes, and property taxes. These O&M and capital costs may include implementation and on-going costs, related, but not limited, to: a. System and billing upgrades in order to track GHG costs and revenues, and b. On-going administrative costs necessary to distribute GHG revenues to the appropriate customer groups, and 2. An entry to record interest expense by applying the Interest Rate to the average monthly balance in the GHGACMA. c. Disposition GHG administrative costs as set forth above are to be funded by GHG allowance revenues through the operation of the GHG Revenue Balancing Account commencing with the implementation of a Commission-adopted GHG revenue allocation methodology. Any remaining administrative funds at the end of a calendar year must be rolled over for use in subsequent years. d. Review Procedures Pursuant to D , reasonableness of amounts recorded in the GHGACMA shall be determined in annual August 1 st GHG Cost and Revenue Forecast and Reconciliation Proceedings. (N) (N) 64H19

15 Southern California Edison Original Cal. PUC Sheet No E Rosemead, California (U 338-E) Cancelling Cal. PUC Sheet No. PRELIMINARY STATEMENT Sheet 1 BB: Greenhouse Gas (GHG) Revenue Balancing Account (GHGRBA) 1. Purpose The purpose of the Greenhouse Gas (GHG) Revenue Balancing Account (GHGRBA) is to record GHG cap-and-trade-related revenues and to set forth the methodology for the amount of GHG revenue to be returned to eligible customers pursuant to D The GHGRBA will record the difference between the amount of GHG revenue actually returned to customers via rates and bill credits, and the actual amount of GHG revenue SCE receives through consigning allowances to the cap-and-trade auction. Any over- or under-collection recorded in the GHGRBA at the end of each year will be either added to (i.e. over-collection) or subtracted from (i.e. under-collection) the subsequent year's GHG revenue forecast. The language contained herein is considered draft until the final GHG allowance revenue allocation methodology is adopted by the Commission and is implemented, which will occur upon issuance of a written letter by the Director of the CPUC s Energy Division following the adoption of necessary decisions addressing implementation. At that time, SCE will update and file revised preliminary statement language as necessary. Additionally, pursuant to D , the GHGRBA will be used to collect and hold, without distributing, GHG allowance revenues until the Commission determines that these revenues can be distributed to eligible customers. Pursuant to D , the outstanding revenue balance accumulated in the GHGRBA will be amortized over a reasonable period so that all deferred revenues are distributed within 24 months. 2. Definitions a. GHG Revenues: The total amount of GHG Revenues that are available for return to utility ratepayers based on revenue earned at each quarterly auction. The utilities subject to CPUC jurisdiction must consign all of their allowances to auction with the proceeds to be used for the benefit of ratepayers. GHG Revenues will be grossed-up to include Commission authorized Franchise Fees and Uncollectibles expense when included in customer rate levels. b. Interest Rate: The Interest Rate shall be one-twelfth of the Federal Reserve three-month Commercial Paper Rate Non-Financial, from Federal Reserve Statistical Release H.15 (expressed as an annual rate). If in any month a non-financial Rate is not published; SCE shall use the Federal Reserve three-month Commercial Paper Rate Financial. 1H24

16 Southern California Edison Original Cal. PUC Sheet No E Rosemead, California (U 338-E) Cancelling Cal. PUC Sheet No. PRELIMINARY STATEMENT Sheet 2 BB: Greenhouse Gas (GHG) Revenue Balancing Account (GHGRBA) 3. Forecast GHG Allowance Revenue Allocation Methodology For ratesetting purposes, on an annual forecast basis, the allocation of forecast GHG Allowance Revenues to eligible customers shall be determined as follows: a. A forecast of GHG Revenues that will be received for the upcoming year; b. Plus: the prior year s December 31 st balance (overcollected or undercollected) in the GHGRBA (In 2013, this amount will be equal to the amount of GHG revenues received in 2012, including accrued interest); c. Less: the forecast GHG-related customer outreach and education costs, set at $1.4 million for 2013, with each subsequent year s funding as authorized by the Commission for recovery; d. Less: SCE s proportionate share of up to $500,000 in costs, allocated based on percentage of retail sales, to engage a firm with marketing and public relations expertise that will be responsible for proposing expanded customer outreach and education activities through 2015; e. Less: forecast annual GHG-related administrative costs as authorized by the Commission for recovery; The sum of (a) through (e) equals the net forecast annual GHG Revenues to be allocated to eligible customers as follows: f. Less: the portion of the net forecast annual GHG Revenues allocated for return to Emissions-Intensive, Trade-Exposed (EITE) customers determined based on Commission-adopted EITE customer definitions and methodology; g. Less: the portion of the net forecast annual GHG Revenues allocated for return to Small Business customers through distribution rates determined based on Commission-adopted Small Business customer definitions and methodology; h. Less: the portion of the net forecast annual GHG Revenues allocated to GHG cost-bearing residential customers (that is, Tiers 3 5 and TOU residential customers) to be returned to residential customers through the use of a volumetric $/kwh distribution rate set so as to completely offset the amount of GHG costs in generation rates allocated to residential customers; i. The remaining amount (i.e. the sum of (a) through (h) equals the GHG Revenue Climate Dividend amount to be allocated for return to all residential customers on an equal-per-residential account basis. The sum of (a) through (i) shall equal zero for each annual forecast year. 2H23

17 Southern California Edison Original Cal. PUC Sheet No E Rosemead, California (U 338-E) Cancelling Cal. PUC Sheet No. PRELIMINARY STATEMENT Sheet 3 BB: Greenhouse Gas (GHG) Revenue Balancing Account (GHGRBA) 4. Operation of the GHGRBA On a monthly basis, entries to the GHGRBA shall be determined as follows: a. A credit entry equal to the amount of actual GHG Revenues received from the cap- and -trade auction; b. A debit entry equal to recorded GHG-related customer outreach and education costs; c. A debit entry equal to SCE s recorded share of costs to engage a firm with marketing and public relations expertise that will be responsible for proposing expanded customer outreach and education activities through 2015; d. A debit entry equal to recorded GHG-related administrative cost revenue requirements; e. A debit entry equal to actual GHG Revenues returned to EITE customers; f. A debit entry equal to actual GHG Revenues returned to Small Business customers; g. A debit entry equal to actual GHG Revenues returned to residential customers through the use of a volumetric $/kwh rate; h. A debit entry equal to actual Climate Dividend revenues returned to residential customers, and i. A debit entry equal to the amount paid to the California Air Resources Board (CARB) or any other authority as ordered by the Commission. The sum of (a) through (i) equals the activity that may be recorded in the GHGRBA each month. Interest shall accrue monthly to the GHGRBA by applying the Interest Rate to the average of the beginning and ending monthly GHGRBA balances. The balance forecast to be recorded in the GHGRBA (either overcollected or undercollected) on December 31 st of the current year, shall be included in the forecast of GHG Revenues for the subsequent year to be either returned to, or recovered from, eligible customers in distribution rates based on the Commission-authorized GHG allowance revenue allocation methodology. 3H23

18 Southern California Edison Original Cal. PUC Sheet No E Rosemead, California (U 338-E) Cancelling Cal. PUC Sheet No. PRELIMINARY STATEMENT Sheet 4 BB: Greenhouse Gas (GHG) Revenue Balancing Account (GHGRBA) 5. Review Procedures Pursuant to D , the recorded operation of the GHGRBA for the previous year shall be reviewed by the Commission in SCE s annual August 1 GHG Cost and Revenue Forecast and Reconciliation application to ensure that the entries made in the GHGRBA are stated correctly and are consistent with Commission decisions. 4H22

19 Southern California Edison Revised Cal. PUC Sheet No E Rosemead, California (U 338-E) Cancelling Revised Cal. PUC Sheet No E PRELIMINARY STATEMENT Sheet 3 YY. Base Revenue Requirement Balancing Account (BRRBA) 2. Definitions: c. BRRBA Distribution Revenue: 1. BRRBA Billed Distribution Revenue: Total recorded billed Distribution revenues, adjust: (1) to remove the CARE discount and (2) to remove the impact of recorded GHG revenues returned to eligible customers (including the Climate Dividend). (N) 2. Plus: the change (plus or minus) in the amount of BRRBA unbilled Distribution revenue (the reversal of prior month s estimated unbilled revenue, plus the current month s estimate); 3. Less: a provision for FF&U. d. Franchise Fees (FF) Factor: The current Commission FF factor adopted in SCE s most recent General Rate Case (GRC) to provide recovery for Franchise Fees. GRC Decision Factor D D D D e. Uncollectible (U) Accounts Factor: The current Commission U factor adopted in SCE s most recent General Rate Case (GRC) to provide recovery for Uncollectible expense. GRC Decision Factor D D D D H14

20 Southern California Edison Revised Cal. PUC Sheet No E Rosemead, California (U 338-E) Cancelling Revised Cal. PUC Sheet No E PRELIMINARY STATEMENT Sheet 5 ZZ. ENERGY RESOURCE RECOVERY ACCOUNT 2. Definitions q. Forecast Greenhouse Gas (GHG) Costs: The Forecast GHG Costs are the amount of direct and indirect procurement related GHG costs, by year, authorized by the Commission for rate recovery in SCE s ERRA proceedings, as follows: ERRA Decision Effective Date Amount (N) (N) 3. Operation of the ERRA Entries to the ERRA shall be made on a monthly basis as follows: a. Credit entry equal to the recorded ERRA Revenue; b. A debit entry equal to recorded URG Fuel and Fuel-related expenses; c. A debit entry equal to recorded QF/CHP Program contract expenses (including contract restructuring expenses), net of recorded revenues, refunds, or other credits; d. A credit entry equal to the net capacity costs recorded in the NSGBA QF/CHP Program subaccount; e. A debit entry equal to recorded Interutility contracts expenses, net of recorded revenues, refunds or other credits; f. A debit entry equal to recorded Bilateral contracts expenses; g. A debit entry equal to recorded Residual Net Short Requirement expenses; h. A debit entry equal to other expenses associated with SCE s purchased power activities to the extent not recovered elsewhere (such as the costs associated with purchasing Firm Transmission Rights, and payments made in support of the Lower Colorado River Multi-Species Conservation Program); i. A debit entry equal to recorded ISO expenses; j. A credit entry equal to Excess Energy Sales Revenues allocated to SCE; k. A credit entry equal to recorded Reliability Must Run (RMR) contracts and ancillary services revenue ii/ ; l. A credit entry equal to proceeds received from the sale or exercise of hedging instruments; m. A credit entry equal to recorded revenues billed under Schedule PC-TBS, Procurement Charge Transitional Bundled Service; n. A credit entry equal to any litigation settlement proceeds as authorized by the Commission; and o. A debit entry equal to the recorded costs associated with the subscription, retention and disposition of turned-back capacity on The El Paso Interstate Pipeline (net of recorded proceeds realized from the short-term release of capacity to another party); (L) ii/ Generation-related Other Operating Revenue (OOR) is recorded in the Native Load Balancing Account. 5H20

21 Southern California Edison Revised Cal. PUC Sheet No E Rosemead, California (U 338-E) Cancelling Revised Cal. PUC Sheet No E E PRELIMINARY STATEMENT Sheet 6 ZZ. ENERGY RESOURCE RECOVERY ACCOUNT 3. Operation of the ERRA : Entries to the ERRA shall be made on a monthly basis as follows: p. Debit or credit entries equal to recorded Mountainview-related costs including: i. Availability incentives; ii. Heat Rate Incentives; iii. Amortization of emission credits; and iv. Gain or loss on sales of emission credits; q. A debit entry equal to recorded 20/20 Rebate Program Costs including: i. 20/20 Rebate amount included on customers bills increased for FF&U ii. Incremental O&M Costs incurred to implement the Summer 2004 and /20 programs. r. A credit entry equal to the payment made by a CCA to compensate SCE for incremental purchased power costs as the result of the CCA causing a delay in the CCA cut-over date pursuant to D s. Transfers, up to a maximum of 10 million, to the Energy Assistance Fund Tracking Account Associated with the Energy Assistance Fund Rate Relief Program. t. A debit entry equal to recorded independent evaluator costs. u. A debit entry equal to the fees associated with participation in Western Renewable Energy Generation Information System. v. A credit entry equal to the proceeds received (net of book cost) from the sale of sulfur dioxide (SO2) credits. w. A debit entry equal to the cost associated with the purchase of sulfur dioxide (SO2) allowances. x. A debit equal to costs related to congestion charges and CRRs. y. A credit equal to congestion revenue and CRRs. z. A debit equal to costs associated with CAISO convergence bidding. aa. A credit equal to CAISO convergence bidding revenues. bb. A debit entry equal to costs related to Tradable Renewable Energy credits (TRECS). cc. dd. ee. ff. gg. A credit entry equal to the proceeds of the sale of TRECS. A debit entry equal to power purchase payments provided to eligible Net Energy Metering customers for energy produced by on-site generation in excess of consumption over a 12-month period. Power purchase payments may include additional compensation for renewable attributes where applicable. A debit entry equal to costs incurred for the greenhouse gas compliance instrument transactions pursuant to D A credit entry equal to one-twelfth of the authorized forecasted direct and indirect GHG costs, deferred for future recovery in rates. A debit entry equal to the balance in the GHG subaccount included for recovery in rates. The sum of (a) through (gg) equals the activity recorded in the ERRA each month. (L) (L) (N) (N) Interest shall accrue monthly to the ERRA by applying the Interest Rate to the average of the beginning and ending monthly ERRA balances. 6H20

22 Southern California Edison Revised Cal. PUC Sheet No E Rosemead, California (U 338-E) Cancelling Revised Cal. PUC Sheet No E PRELIMINARY STATEMENT Sheet 11 ZZ. ENERGY RESOURCE RECOVERY ACCOUNT 10. Energy Assistance Fund Tracking Account The purpose of the Energy Assistance Fund Tracking Account is to track the difference between: 1) Up to $10 million of 2006 ERRA over-collection associated with the Energy Assistance Fund rate relief program; and 2) disbursements made for payment of electric bills of eligible residential customers under the Energy Assistance Fund rate relief program, and associated administrative fees paid to the United Way. Entries to the tracking account shall be made as follows: a. Credit transfers-in (up to $10 million) of 2006 ERRA over-collection allocated to the Energy Assistance Fund rate relief program; b. A debit entry equal to disbursements made for payment of electric bills of eligible residential customers under the Energy Assistance Fund rate relief program; c. A debit entry equal to administrative fees (excluding fees paid by SCE s shareholders) paid to the United Way associated with the Energy Assistance Fund rate relief program; and d. An entry to record interest expense, calculated by applying the Interest Rate (as defined in SCE s Preliminary Statement Section N.2 ) to the average monthly balance in the Energy Assistance Fund Tracking Account. Disposition of the balance in the Energy Assistance Fund Tracking Account will be proposed by SCE in an ERRA proceeding. 11. GREENHOUSE GAS (GHG) COST SUB-ACCOUNT The purpose of the GHG cost sub-account is to record entries related to the authorized forecasted direct and indirect procurement-related GHG costs, during the time that recovery of the costs are temporarily deferred, pursuant to D Once the Commission-authorized recovery in rates begins, the GHG cost sub-account entries will track the transfer of costs from the GHG cost sub-account to the main ERRA in Section 3 above for cost recovery. The balance in the GHG cost subaccount will not factor into the calculation of the ERRA trigger in Section 8 above. (N) (N) 11H16

23 Southern California Edison Original Cal. PUC Sheet No E Rosemead, California (U 338-E) Cancelling Cal. PUC Sheet No. PRELIMINARY STATEMENT Sheet 12 ZZ. ENERGY RESOURCE RECOVERY ACCOUNT 11. GREENHOUSE GAS (GHG) COST SUB-ACCOUNT SCE shall maintain the GHG cost sub-account by making monthly entries as follow: a) A debit entry equal to one-twelfth of the authorized forecasted direct and indirect GHG costs, deferred for future recovery in rates, b) A credit entry equal to the balance in the GHG cost sub-account included for recovery in rates, and c) An entry to record interest expense by applying the Interest Rate to the average monthly balance in the GHG cost sub-account. 12H19

24 Southern California Edison Revised Cal. PUC Sheet No E Rosemead, California (U 338-E) Cancelling Revised Cal. PUC Sheet No E TABLE OF CONTENTS Sheet 1 Cal. P.U.C. Sheet No. TITLE PAGE E TABLE OF CONTENTS - RATE SCHEDULES E E TABLE OF CONTENTS - LIST OF CONTRACTS AND DEVIATIONS E TABLE OF CONTENTS - RULES E TABLE OF CONTENTS - INDEX OF COMMUNITIES, MAPS, BOUNDARY DESCRIPTIONS E TABLE OF CONTENTS - SAMPLE FORMS E E PRELIMINARY STATEMENT: A. Territory Served E B. Description of Service E C. Procedure to Obtain Service E D. Establishment of Credit and Deposits E E. General E F. Symbols E G. Gross Revenue Sharing Mechanism E E H. Baseline Service E I. Not In Use... -E J. Not In Use... -E K. Nuclear Decommissioning Adjustment Mechanism E L. Purchase Agreement Administrative Costs Balancing Account E M. Income Tax Component of Contributions E N. Memorandum Accounts E E E E E E E O. California Alternate Rates for Energy (CARE) Adjustment Clause E E P. Optional Pricing Adjustment Clause (OPAC) E 1H16

25 Southern California Edison Revised Cal. PUC Sheet No E Rosemead, California (U 338-E) Cancelling Revised Cal. PUC Sheet No E TABLE OF CONTENTS Sheet 2 PRELIMINARY STATEMENT: Cal. P.U.C. Sheet No. Q. Demand Side Management Adjustment Clause E E R. NOT IN USE E S. Procurement Energy Efficiency Balancing Account E T. Electric and Magnetic Fields Measurement Program E U. California Solar Initiative Program Balancing Account E V. Hazardous Substance Cleanup Cost Recovery Mechanism E E W. Departing Load and Customer Generation Departing Load Cost Responsibility E E X. Research, Development and Demonstration Adjustment Clause E Y. Demand Response Program Balancing Account E E Z. Songs 2&3 Steam Generator Replacement Balancing Account E E AA. California Alternate Rates for Energy (CARE) Balancing Account E BB. Greenhouse Gas (GHG) Revenue Balancing Account (GHGRBA) E CC. Not In Use...-E DD. Cost Of Capital Trigger Mechanism E EE. Electric Deferred Refund Account E FF. Public Purpose Programs Adjustment Mechanism E E GG. Not In Use...-E HH. Low Income Energy Efficiency Program Adjustment Mechanism E II. Bond Charge Balancing Account E JJ. Direct Access Cost Responsibility Surcharge Tracking Account E KK. Not In Use...-E LL. Reliability Investment Incentive Mechanism E MM. Not In Use...-E NN. Mohave Balancing Account E OO. Pension Costs Balancing Account E PP. Post Employment Benefits Other Than Pensions Costs Balancing Account E QQ. Edison SmartConnect Balancing Account E 2H18

26 Southern California Edison Revised Cal. PUC Sheet No E Rosemead, California (U 338-E) Cancelling Revised Cal. PUC Sheet No E TABLE OF CONTENTS Sheet 3 PRELIMINARY STATEMENT: Cal. P.U.C. Sheet No. RR. New System Generation Balancing Account E SS. Songs 2&3 Steam Generator Removal And Disposal Balancing Account E E TT. NOT IN USE... -E UU. Solar PV Program Balancing Account E VV. Medical Programs Balancing Account E WW. Community Choice Aggregation Cost Responsibility... Surcharge Tracking Account E XX. NOT IN USE... -E YY. Base Revenue Requirement Balancing Account E E ZZ. Energy Resource Recovery Account E E AAA. Post Test Year Ratemaking Mechanism E BBB. Not In Use... -E CCC. Cost of Capital Mechanism E DDD On Bill Financing Balancing Account E EEE Not In Use...-E FFF Electric Program Investment Charge Balancing Account-California Energy Commission E GGG Electric Program Investment Charge Balancing Account-Southern California Edison.. (EPICBA-SCE) E HHH Electric Program Investment Charge Balancing Account-California Public Utilities Commission (EPICBA-CPUC) E 3H14