BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

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1 BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA Application of Pacific Gas and Electric Company for Approval of Modifications to its SmartMeter Program and Increased Revenue Requirements to Recover the Costs of the Modifications. (U39M) Application (Filed March 24, 2011) REPLY COMMENTS OF SOUTHERN CALIFORNIA EDISON COMPANY (U 338-E) ON DECISION MODIFYING PACIFIC GAS AND ELECTRIC COMPANY S SMARTMETER PROGRAM TO INCLUDE AN OPT-OUT OPTION SHARON YANG JANET S. COMBS Attorneys for SOUTHERN CALIFORNIA EDISON COMPANY 2244 Walnut Grove Avenue Post Office Box 800 Rosemead, California Telephone: (626) Facsimile: (626) Sharon.Yang@sce.com Dated: December 19, 2011

2 BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA Application of Pacific Gas and Electric Company for Approval of Modifications to its SmartMeter Program and Increased Revenue Requirements to Recover the Costs of the Modifications. (U39M) Application (Filed March 24, 2011) REPLY COMMENTS OF SOUTHERN CALIFORNIA EDISON COMPANY (U 338-E) ON DECISION MODIFYING PACIFIC GAS AND ELECTRIC COMPANY S SMARTMETER PROGRAM TO INCLUDE AN OPT-OUT OPTION I. INTRODUCTION Pursuant to Rule 14.3 of the California Public Utilities Commission s (CPUC s or Commission s) Rules of Practice and Procedure, Southern California Edison Company (SCE) hereby submits these reply comments to the comments of parties to this proceeding on the Proposed Decision of Commission President Peevey issued on November 22, 2011 (PD). II. DISCUSSION A. The Commission Should Adopt the Non-Communicating Smart Meter Option Multiple parties recommend that the Commission authorize an analog meter opt-out option to alleviate concerns about health impacts. 1 This recommendation is inappropriate because the Commission has already ruled that health issues are not within the scope of this proceeding. 2 The Utility Reform Network (TURN) obfuscates this issue by stating that the PD 1 2 See Comments of The Utility Reform Network on Proposed Decision of President Peevey Authorizing a SmartMeter Opt-Out Program at pp. 5-7, Wilner & Associates Comments to Proposed Decision of Assigned Commissioner Michael R. Peevey, at pp. 1, 3, and 5-6, Comments of EMF Safety Network on Proposed Decision of Commissioner Peevey at pp. 1-2, and Comments of Aglet Consumer Alliance on Proposed Decision of Commissioner Peevey at pp See Assigned Commissioner Ruling and Scoping Memo, May 25,

3 fails to adopt the analog meter solely because the Commission has a goal of mandatory timevariant pricing for everyone. It is true that non-communicating smart meters allow for timevariant pricing. However, the Commission selected non-communicating smart meters because this option eliminates radio frequency (RF) transmissions from the wireless radios in the smart meter and provides the interval data necessary to support the Commission s Smart Grid goals. As such, the recommendation that the Commission should require an analog meter option is without merit, and the Commission should adopt the non-communicating smart meter option in Pacific Gas & Electric Company s (PG&E s) opt-out program. B. Customer Self-Reads Do Not Support the CPUC s Smart Grid Goals and Do Not Necessarily Result in Lower Program Costs In its comments on the PD, TURN recommends that [t]he PD admits that costs could be reduced if customers were able to self-read their meters. 3 TURN is incorrect, as the PD makes no such admission. In fact, the PD makes no finding related to the cost of customer self-reads. In addition, TURN s assertion that customer self reads would result in lower program costs is not supported by PG&E s cost data. 4 As PG&E noted in its October 28, 2011 Response to the October 12, 2011 Ruling, the increased operational costs associated with customer self-reads more than offset the reduced cost for meter reader visits, 5 resulting in higher program costs compared to monthly manual reads performed by PG&E. Thus, customer self-reads should not be adopted because they do not necessarily result in lower opt-out program costs, and they do not support the CPUC s Smart Grid goals TURN Comments at p. 19. TURN Comments at pp PG&E Response to Administrative Law Judge s October 12, 2011 Ruling Directing It To File Additional Cost Information, Attachment A, at. p. 1B

4 C. PG&E s Shareholders Should Not Pay for The Opt-Out Program Costs TURN recommends that PG&E s shareholders bear a portion of the opt-out program costs and suggests that amount is at least 50 percent. 6 TURN tries to justify its recommendation by claiming that: PG&E should have foreseen the potential to remotely turn off the radio and incorporated this functionality in the firmware design. 7 TURN is incorrect. The Commission authorized PG&E s AMI program 8 based on PG&E s AMI application and the Commission s Advanced Metering Infrastructure (AMI) program guidance, 9 neither of which contemplated remote turn-off of smart meters radios. It is unreasonable to claim that PG&E should have foreseen a need to remotely turn off a smart meter s radio when there was nothing to indicate that the radios in the smart meters, which comply with all regulations (Federal Communications Commission, etc.), would ever need to be turned off remotely. TURN goes on to state that PG&E be held accountable as part of the normal project risk accounted for in utility return on rate base. 10 This statement would be true if opt-out capabilities were part of PG&E s SmartMeter Program scope. However, PG&E s opt-out program represents capabilities and activities required by the Commission and incremental to PG&E s SmartMeter Program. The PD properly recognizes this distinction by finding that PG&E s implementation of the SmartMeter Program has complied with the requirements of Decision (D.) , and that PG&E should be allowed to recover costs associated with the opt-out option provided such costs are found to be reasonable, and not already being recovered in rates. 11 There is no justification for the Commission penalizing Investor Owned Utilities (IOUs ) shareholders for providing new opt-out capabilities required by the Commission. As See TURN Comments at p. 18 See id. See D Final Opinion Authorizing Pacific Gas and Electric Company to Deploy Advanced Metering Infrastructure and D Decision on Pacific Gas and Electric Company s Proposed Upgrade to the SmartMeter Program. See Joint Assigned Commissioner and Administrative Law Judge s Ruling Providing Guidance for the Advanced Metering Infrastructure Business Case Analysis, R , for six AMI system support functions at pp See TURN Comments at p. 18. See PD, Conclusion of Law

5 such, the Commission should reject TURN s proposal to require IOUs shareholders to fund any portion of the opt-out program costs. D. A Separate Application for Reasonableness Review Is Unnecessary The Division of Ratepayer Advocates (DRA), TURN and Aglet support the establishment of a memorandum account to track PG&E s opt-out program costs and fee revenues, subject to reasonableness review before authorizing cost recovery. Both DRA and TURN state that this review could be performed in PG&E s annual Energy Resource Recovery Account (ERRA) review proceeding. However, Aglet opposes the PD s reliance on ERRA review proceedings and instead states that the Commission should amend the PD to require PG&E to file an application for rate recovery of opt-out costs. Contrary to Aglet s recommendation, the ERRA review proceeding is the appropriate forum for review of opt-out costs and revenues. The ERRA review proceedings are the established forums in which the majority of the IOUs balancing and memorandum accounts are reviewed, including the Smart Meter balancing accounts. A separate application is unnecessary and could significantly delay recovery of costs that PG&E necessarily will incur to comply with the opt-out program ordered by the Commission. DRA recommends the elimination of the March 31, 2014 Tier 3 advice letter and instead PG&E should include the information the PD would require in this advice letter in the ERRA application. This modification would streamline the review process and allow for meaningful participation by ratepayers in PG&E s ERRA review proceeding. SCE supports DRA s recommendation. Such a modification to the PD would establish what PG&E should file to meet its burden of proof, while also providing the Commission the information it would need to perform a full review of the reasonableness of PG&E s opt-out program costs

6 E. Opt-Out Fees for Low Income Customers Should be Affordable and Consistent With Current Ratemaking Practices For California Alternate Rates for Energy (CARE) and Family Electric Rate Assistance Program (FERA) customers, the PD provides an initial fee of $0 and a monthly fee of $5. 12 In response, PG&E states [t]he elimination of an initial [CARE/FERA] fee is contrary to the reality that there are incremental costs associated with opting out of the smart grid SCE agrees. The elimination of the CARE/FERA initial opt-out fee is inconsistent with Commissioner Peevey s initial direction in this proceeding to prepare a proposal for Commission consideration that will allow some form of opt-out for customers who object to these devices at reasonable cost, to be paid by the customers who choose to opt-out. 13 The Commission should provide a CARE/FERA fee that is both affordable for low-income customers and is more consistent with current discounted CARE/FERA rates. F. Health Issues Are Not Within the Scope of This Proceeding Various parties comments address health-related concerns in this proceeding. 14 These comments are inappropriate and should be accorded no weight. As referenced in the Assigned Commissioner Ruling and Scoping Memo, 15 health issues were never within the scope of this proceeding. As such, the Commission should proceed as set forth in the Scoping Memo and deny the requests to expand the scope of this proceeding See PD at p. 33. Statement from President Peevey at March 10, 2011 CPUC Business Meeting; see also Assigned Commissioner Ruling and Scoping Memo, May 25, 2011, at p. 2. See Aglet Comments at pp. 1-2, Ecological Options Network (EON) Comments at p. 9; EMF Safety Network Comments at pp. 4-5, the County of Lake Comments at pp. 4-7; Wilner & Assoc. Comments at pp See Scoping Memo at p

7 III. CONCLUSION SCE respectfully requests that the Final Decision of the Commission in this matter consider and incorporate SCE s Opening and Reply Comments. Respectfully submitted, SHARON YANG JANET S. COMBS /s/ SHARON YANG By: Sharon Yang Attorney for SOUTHERN CALIFORNIA EDISON COMPANY 2244 Walnut Grove Avenue Post Office Box 800 Rosemead, California Telephone: (626) Facsimile: (626) sharon.yang@sce.com - 6 -

8 CERTIFICATE OF SERVICE I hereby certify that, pursuant to the Commission s Rules of Practice and Procedure, I have this day served a true copy of REPLY COMMENTS OF SOUTHERN CALIFORNIA EDISON COMPANY (U 338-E) ON DECISION MODIFYING PACIFIC GAS AND ELECTRIC COMPANY S SMARTMETER PROGRAM TO INCLUDE AN OPT-OUT OPTION on all parties identified on the attached service list(s). Service was effected by one or more means indicated below: Transmitting the copies via to all parties who have provided an address. First class mail will be used if electronic service cannot be effectuated. Executed this 19th day of December, 2011, at Rosemead, California. /s/ MELISSA ANN SCHARY HERNANDEZ Melissa Ann Schary Hernandez Project Analyst SOUTHERN CALIFORNIA EDISON COMPANY 2244 Walnut Grove Avenue Post Office Box 800 Rosemead, California 91770

9 CPUC - Service Lists - A Page 1 of 4 12/19/2011 CPUC Home CALIFORNIA PUBLIC UTILITIES COMMISSION Service Lists PROCEEDING: A PG&E - FOR APPROVAL FILER: PACIFIC GAS AND ELECTRIC COMPANY LIST NAME: LIST LAST CHANGED: DECEMBER 19, 2011 DOWNLOAD THE COMMA-DELIMITED FILE ABOUT COMMA-DELIMITED FILES Back to Service Lists Index Parties MARY BETH BRANGAN STEVE MARTINOT ECOLOGICAL OPTIONS NETWORK RECORDING SECRETARY ACRCASM, CA PO BOX FOR: ECOLOGICAL OPTIONS NETWORK BERKELEY, CA FOR: ALAMEDA COUNTY RESIDENTS CONCERNED ABOUT SMART METERS (ALAMEDA CRCASM) SHARON YANG CANDACE MOREY ATTORNEY SOUTHERN CALIFORNIA EDISON COMPANY LEGAL DIVISION 2244 WALNUT GROVE AVE. / PO BOX 800 ROOM 5037 ROSEMEAD, CA VAN NESS AVENUE FOR: SOUTHERN CALIFORNIA EDISON COMPANY SAN FRANCISCO, CA FOR: DRA WILLIAM K. SANDERS MARCEL HAWIGER DEPUTY CITY ATTORNEY ENERGY ATTORNEY CITY AND COUNTY OF SAN FRANCISCO THE UTILITY REFORM NETWORK 1 DR. CARLTON B. GOODLETT PLACE, RM SANSOME STREET, SUITE 900 SAN FRANCISCO, CA SAN FRANCISCO, CA FOR: CITY AND COUNTY OF SAN FRANCISCO FOR: THE UTILITY REFORM NETWORK (TURN) CHONDA NWAMU PACIFIC GAS AND ELECTRIC COMPANY PO BOX 7442 SAN FRANCISCO, CA JAMES M. TOBIN ATTORNEY TOBIN LAW GROUP 1100 MAR WEST STREET, SUITE D

10 CPUC - Service Lists - A Page 2 of 4 12/19/2011 FOR: PACIFIC GAS AND ELECTRIC COMPANY TIBURON, CA FOR: ROVE ENTERPRISES AND BURBANK ACTION (MOVING PARTIES) JAMES M. TOBIN JAMES WEIL ATTORNEY AT LAW DIRECTOR TOBIN LAW GROUP AGLET CONSUMER ALLIANCE 1100 MAR WEST STREET, SUITE D PO BOX 866 TIBURON, CA NOVATO, CA FOR: THE TOWN OF FAIRFAX, CA; THE FOR: AGLET CONSUMER ALLIANCE ALLIANCE FOR HUMAN & ENVIRONMENTAL HEALTH; COUNTY OF MARIN; CITY OF MARINA; CITY OF SEASIDE; COALITION OF ENERGY USERS; CONSUMERS POWER ALLIANCE; COUNTY OF SANTA BARBARA, CA; EAGLE FORUM OF CALIFORNIA; NEIGHBORHOOD DEFENSE LEAGUE OF CALIFORNIA; PUBLIC CITIZEN; SANTA BARBARA TEA PARTY; MARIN ASSOCIATION OF REALTORS DAVID L. WILNER MICHAEL E. BOYD WILNER & ASSOCIATES PRESIDENT PO BOX 2340 CALIFORNIANS FOR RENEWABLE ENERGY, INC. NOVATO, CA SOQUEL DRIVE FOR: WILNER & ASSOCIATES SOQUEL, CA FOR: CARE ORLEAN KOEHLE LLOYD C. GUINTIVANO EAGLE FORUM OF CALIFORNIA DEPUTY COUNTY COUNSEL 4577 CREEKMONT CT. COUNTY OF LAKE SANTA ROSA, CA NORTH FORBES STREET FOR: EAGLE FORUM OF CALIFORNIA LAKEPORT, CA FOR: COUNTY OF LAKE JEANINE B. NADEL SANDI MAURER COUNTY OF MENDOCINO FOUNDER 301 LOW GAP ROAD EMF SAFETY NETWORK UKIAH, CA PO BOX 1016 FOR: COUNTY OF MENDOCINO SEBASTOPOL, CA FOR: EMF SAFETY NETWORK Information Only ANDREW WEISEL BONNIE W. TAM MACQUARIE CAPITAL PACIFIC GAS AND ELECTRIC COMPANY, NY 00000, CA GREGORY S.G. KLATT KAREN FORSGARD DOUGLASS & LIDDELL PACIFIC GAS AND ELECTRIC COMPANY, CA 00000, CA 00000

11 CPUC - Service Lists - A Page 3 of 4 12/19/2011 KEVIN HIETBRINK MRW & ASSOCIATES, LLC REGULATORY CASE COORDINATOR PACIFIC GAS AND ELECTRIC COMPANY, CA 00000, CA MARTIN HOMEC, CA CASE ADMINISTRATION SOUTHERN CALIFORNIA EDISON COMPANY LAW DEPT WALNUT GROVE AVE. / PO BOX 800 ROSEMEAD, CA JANET S. COMBS REBECCA GILES SOUTHERN CALIFORNIA EDISON COMPANY SDG&E AND SOCALGAS 2244 WALNUT GROVE AVE., PO BOX CENTURY PARK COURT - CP32D ROSEMEAD, CA SAN DIEGO, CA CENTRAL FILES MIHCAEL/JANET HETHERINGTON SAN DIEGO GAS AND ELECTRIC COMPANY 325 M. SHARON PARK DRIVE, STE CENTURY PARK CT, CP32D, RM CP31-E MENLO PARK, CA SAN DIEGO, CA MARZIA ZAFAR CONOR DOYLE PACIFIC GAS & ELECTRIC COMPANY EXECUTIVE DIVISION 77 BEALE STREET, B10B ROOM 2-B SAN FRANCISCO, CA VAN NESS AVENUE SAN FRANCISCO, CA NORA SHERIFF CHRISTOPHER WARNER ALCANTAR & KAHL, LLP PACIFIC GAS AND ELECTRIC COMPANY 33 NEW MONTGOMERY STREET, SUITE 1850 PO BOX 7442 SAN FRANCISCO, CA SAN FRANCISCO, CA SUDI SCULL CALIFORNIA ENERGY MARKETS 78 PERALTA STREET 425 DIVISADERO ST. STE 303 SAN FRANCISCO, CA SAN FRANCISCO, CA LISA WEINZIMER CLIFF GLEICHER PLATTS MCGRAW-HILL DIRECTOR - GENERAL LITIGATION 695 NINTH AVENUE, NO. 2 PACIFIC GAS AND ELECTRIC COMPANY SAN FRANCISCO, CA BEALE ST., MC B30A, PO BOX 7442 SAN FRANCISCO, CA CASE COORDINATION CHAROLETTE ROGINA PACIFIC GAS AND ELECTRIC COMPANY 1221B UNIVERSITY AVENUE PO BOX ; MC B9A BERKELEY, CA SAN FRANCISCO, CA SANDY ROSS BARBARA R. BARKOVICH HEALTH HABITAT, INC. BARKOVICH & YAP, INC. 76 LEE STREET ROSEWOOD TERRACE MILL VALLEY, CA MENDOCINO, CA 95460

12 CPUC - Service Lists - A Page 4 of 4 12/19/2011 JEFF NAHIGIAN JBS ENERGY, INC. 311 D STREET WEST SACRAMENTO, CA State Service VANESSA VALLARTA ALOKE GUPTA CITY ATTORNEY CITY OF SALINAS INFRASTRUCTURE PLANNING AND PERMITTING B 200 LINCOLN AVENUE AREA 4-A SALINAS, CA VAN NESS AVENUE SAN FRANCISCO, CA AMY C. YIP-KIKUGAWA CHERIE CHAN EXECUTIVE DIVISION ELECTRICITY PRICING AND CUSTOMER PROGRAM ROOM 5102 ROOM VAN NESS AVENUE 505 VAN NESS AVENUE SAN FRANCISCO, CA SAN FRANCISCO, CA CHRISTOPHER R VILLARREAL MICHAEL SUKHOV POLICY & PLANNING DIVISION CONSUMER ISSUES ANALYSIS BRANCH ROOM 5119 AREA 2-B 505 VAN NESS AVENUE 505 VAN NESS AVENUE SAN FRANCISCO, CA SAN FRANCISCO, CA THOMAS ROBERTS ELECTRICITY PRICING AND CUSTOMER PROGRAM ROOM VAN NESS AVENUE SAN FRANCISCO, CA TOP OF PAGE BACK TO INDEX OF SERVICE LISTS

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA Order Instituting Rulemaking Concerning Energy Efficiency Rolling Portfolios, Policies, Programs, Evaluation, and Related Issues. R.13-11-005