Opening Briefs Address Allocation of Payments on Covid-19 Arrearages

Background

Scoped Issue 7: Allocation of Payments on Past-Due Utility Bills Between Community Choice Aggregators ("CCAs")and Utilities (Energy Stakeholders Only)

1. Should arrearage relief be applied to Community Choice Aggregator customers? If so, how?

    a. To the extent that customers are not at risk of disconnection for failure to pay their CCA charges, does this change the need for arrearage relief of CCA charges?

    b. To what extent does Public Utilities Code Section 779.2 require utilities to allocate partial payments first to disconnectible charges?

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Party Comments

CalCCA:

• Recommends the Commission grant CalCCA’s Motion to Modify Scope to Conform to Government Code §16429.5 (CalCCA Motion), filed August 24, 2021. The Commission does not have the authority to move forward with Issue 7 as it relates to California Arrearage Payment Program ("CAPP") but must defer to the legislative directive and CSD’s implementation.
• If the Commission fails to act on or denies CalCCA’s Motion, the Commission should accelerate the schedule, as it relates to CAPP, to complete consideration with a final decision not later than September 30.
• If the Commission fails to act on or denies CalCCA’s Motion, and therefore proceeds with consideration of Issue 7, the Commission should retain jurisdiction to consider Issue 7 related to any state/federal COVID relief programs outside of CAPP.
• If the Commission fails to act on or denies CalCCA’s Motion, and therefore proceeds with consideration of Issue 7, the Commission should retain jurisdiction either in this proceeding or in the Disconnections rulemaking, R.18-07-005, to permanently decide on the Issue 7 question of the allocation of partial payments between IOUs and CCAs of past due balances.

Cal Advocates:

• Yes, arrearage relief should be applied to arrearages owed to both IOUs and CCAs to maintain consistency with legislation and Arrearage Management Plans ("AMP") adopted in Resolution E-5114. The AMP programs adopted in Resolution E-5114 already provide a framework for the proportionate allocation of arrearage forgiveness between IOUs and CCAs. The Commission should utilize this existing framework to proportionately allocate arrearage relief to IOUs and CCAs for arrears that were accrued during the disconnection moratorium, instead of establishing a redundant framework.
• Applying arrearage relief proportionately between IOUs and CCAs would enable the Commission to remain consistent with current arrearage relief programs and promote the stability of CCAs.  In addition, applying arrearage relief to a CCA customer’s arrearage helps ensure the economic viability of CCAs and avoids unexpected movement of customers from CCAs to the IOUs, which can lead to increased costs for all customers.
• Cal Advocates recommends that utilities continue allocating partial payments and arrearage relief used to satisfy COVID-19 related arrearages to CCAs without applying them to disconnectable charges first in order to create consistency between the different arrearage relief programs, reduce customer confusion, and promote economic viability of the CCAs.

SDG&E:

• The California Legislature has signaled its intent that CCAs should receive some portion of the arrearage relief allocated through the CAPP.
• To provide customers with debt forgiveness in an efficient and expedited fashion and to comply with relevant statues, SDG&E will apply arrearage relief to its CCAs in proportion to their share of the customer’s arrearage.
• For partial payments from CCA customers in SDG&E’s service territory, as directed in D.21-06-036, the Commission should adopt a payment allocation method that applies the partial payment first to the installment arrangement amount (which represents the customer’s arrearage balance) and prorates the payment applied to the installment agreement amount (including the COVID-19 Relief Payment Plans) in proportion with installment amount owed to each entity between the utility and the CCA.
• Further, while the COVID-19 Relief Payment Plans are in effect, the Commission should permit SDG&E to prorate any partial payments that are applied to customers’ current charges in a similar fashion, which would prorate any partial payment for current charges based on the percentage of current charges owed to each entity between the utility and the CCA.
• Consistent with SDG&E’s tariffs and Public Utilities (Pub. Util.) Code Section 779.2, CCA arrearages are not disconnectible. SDG&E may only disconnect customers for debts related to utility (T&D) charges.
• Further arrearage relief, outside of CAPP, should balance the needs of CCAs with the need to avoid disconnections. If additional ratepayer funded arrearage relief is deemed necessary, it may be beneficial to target that relief to disconnectible balances.
• Utilities are not required to allocate partial payments to disconnectible charges first. But read in conjunction with this Commission’s intent to reduce customer disconnections, Section 779.2 may be read to indicate a general policy preference toward the application of partial payments to disconnectible charges. The practice of applying payments to disconnectible charges first best mitigates the risk of disconnection for customers.

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