Section 454.1 Of Article 1. Rates From California Public Utilities Code >> Division 1. >> Part 1. >> Chapter 3. >> Article 1.
454.1
. (a) Except as provided in subdivision (b), if a customer
with a maximum peak electrical demand in excess of 20 kilowatts
located or planning to locate within the service territory of an
electrical corporation receives a bona fide offer for electric
service from an irrigation district at rates less than the electrical
corporation's tariffed rates, the electrical corporation may
discount its noncommodity rates, but may not discount its
noncommodity rates below its distribution marginal cost of serving
that customer. For purposes of this subdivision, the costs of the
electric commodity shall be excluded from both the irrigation
district and electric corporation's rates. The electrical corporation
may recover any difference between its tariffed and discounted
service from its remaining customers, allocated as determined by the
commission. However, the reallocation may not increase rates to its
remaining customers by any greater amount than the rates would be
increased if the customer had taken electric distribution service
from the irrigation district and the irrigation district had paid the
charge established in subdivision (e) of Section 9607. Further,
there shall be a firewall preventing the reallocation of such
differences resulting from discounting to residential customers or to
commercial customers with maximum peak demands not in excess of 20
kilowatts. The commission shall review the discounts provided under
this section by each electrical corporation and report to the
Legislature not later than January 15, 2003. The review shall include
an assessment of the effectiveness of the discount levels and the
rate impacts to customers of the discounts. The commission shall
include in its report a recommendation of any changes that should be
made to the discount levels in light of other commission approved
discount programs.
(b) Subdivision (a) does not apply to a cumulative 75 megawatts of
load served by the Merced Irrigation District, determined as
follows:
(1) The load is located within the boundaries of Merced Irrigation
District, as those boundaries existed on December 20, 1995, together
with the territory of Castle Air Force Base which was located
outside the district on that date.
(2) For purposes of this section, a megawatt of load shall be
calculated in accordance with the methodology established by the
California Energy Resource Conservation and Development Commission in
its Docket No. 96-IRR-1890.
(c) Subdivision (a) applies to the load of customers that move to
the areas described in paragraph (1) of subdivision (b) after
December 31, 2000, and such load shall be excluded from the
calculation of the 75 megawatts in subdivision (b).
(d) If an electrical corporation seeks to apply the discounts
permitted under subdivision (a) within the geographic area described
in subdivision (b) of Section 9610, the electrical corporation's
resulting rate for distribution service may not be less than 120
percent of the electrical corporation's marginal distribution cost of
serving that customer.