On September 29, 2022, Administrative Law Judge ("ALJ") Atamturk issued a Proposed Decision ("PD") adopting an opt-in residential tariff to incentivize electrification with a flat fixed charge of $16 per month for residential customers with qualifying technologies, instead of SDG&E's proposed four-tiered monthly fixed charge ranging from $28.53 to $85.41. The PD places a cap of 10,000 accounts on TOU-ELEC to control any potential revenue shortfall, with the option for SDG&E to increase the cap by increments of 10,000 via Tier 2 advice letter filings. Comments on the PD are due by October 19, 2022.
The Commission finds that San Diego Gas & Electric Company's ("SDG&E's") proposed TOU-ELEC rate is inconsistent with the Commission’s rate design principles because SDG&E’s proposed rate does not reflect cost-causation and its adoption may pose risks of undue revenue shift onto non-participating ratepayers. Further, the Commission is not convinced that SDG&E’s tiered flat rate will incentivize customers to shift loads from peak hours to off-peak hours or provide sufficient incentives for electrification. The Commission also points out that SDG&E's proposal is complex and might not be easily understandable to customers. The PD adopts several modifications to address these concerns, including:
a) An un-tiered TOU rate with a flat fixed charge of $16 per month for residential customers with qualifying technologies (i.e., electric vehicles, energy storage, heat pump climate control, or heat pump water heaters), regardless of their date of purchase.
b) Greater Peak-to-Super-Off-Peak differential in summer and winter, as proposed by SDG&E, to send a stronger signal to use electricity outside the peak period.
c) Lower Off-Peak-to-Super-Off-Peak differential, as proposed by SDG&E, to send a stronger signal to use electricity outside the peak period.
d) A cap of 10,000 accounts on TOU-ELEC to control any potential revenue shortfall, with the option to increase the cap by increments of 10,000 via Tier 2 advice letter filings.
e) A 20 percent discount available to customers eligible for medical baseline program, as approved in the partial settlement.
According to the PD, within 60 days from the issuance of this decision, SDG&E shall supplement its marketing, education, and outreach ("ME&O") plans to reflect the rate design adopted in this decision and to target customers who do not currently own the qualified technologies. The PD also orders that SDG&E submit a Tier 1 advice letter every 12 months, starting after the tariff becomes available, and include the total number of participants and kWh, the total number of participants by eligible technology, the climate zone and CARE status, and the resulting rate impact on remaining customers.
In response to the concerns of CCA Parties that unbundled customers may be confused by SDG&E’s marketing of its TOU-ELEC rate, the PD orders that SDG&E shall present its final ME&O plans in a Tier 2 advice letter filing for the Commission’s review and approval. However, the Commission denies the CCA Parties’ request to add language to clarify the treatment of PCIA in ELEC-TOU tariff sheets, asserting that Resolution E-5131 requires a definition of PCIA to be included on TOU-ELEC customer bills and that this definition will sufficiently explain how the PCIA is embedded in the TOU-ELEC commodity charge. The PD states that any other request for clarification or addition of the language related to PCIA matters should be addressed in R.17-06-026 to maintain consistency in practice among all utilities and rate schedules.
