SCE Says Edwards Air Force Base Remains Bundled Customer Under Supply Arrangement

April 15, 2011
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Edwards Air Force Base has remained a bundled service customer of Southern California Edison despite purchasing bulk energy supply from various sources, including the Western Area Power Administration, SCE said in reply to a petition from Edwards seeking to include its load under the direct access baseline and cap at SCE (Rulemaking 07-05-025).

Edwards said that the California PUC's order establishing the direct access baseline amounts, and associated caps, improperly excluded 218 GWh of electricity sales procured by Edwards from July 2003 to June 2004 (the period used to set the baselines for the cap). Edwards requested that the Commission recognize that since 2001, Edwards "has operated as if it were a DA [direct access] customer with virtually all of its power being supplied by Western Area Power Administration ('Western') or by competitive suppliers through power purchase agreements."

Edwards noted that it has paid the DA cost responsibility surcharge as part of its arrangement.

However, SCE said that Edwards has always remained a bundled service customer of SCE, and SCE has remained Edwards' load serving entity. Although Edwards has agreements with wholesale suppliers who deliver power to SCE, SCE stressed that it plans for and schedules the load requirements of all Edwards' accounts, and meets California's procurement obligations for all of Edwards' load, including Resource Adequacy (RA) and Renewable Portfolio Standard (RPS) requirements. The bulk energy deliveries from WAPA are separate and independent of Edwards' retail electric usage, SCE said.

SCE argued that WAPA does not qualify as an "other provider" of electric service under P.U. Code Section 365.1 (whose service is used to set the DA load cap) because WAPA is not registered with the Commission as an electric service provider (ESP) as required under P.U. Code Section 394 et seq., and is therefore ineligible to provide electric service to retail customers in SCE's service area. "Moreover, WAPA never provided retail electric service to Edwards," SCE said.

"Because Edwards has received retail electric service from SCE ... SCE appropriately excluded Edwards' load from the historical data used to establish the DA load cap and baseline for SCE's service area under SB 695," SCE said.

SCE further said that Edwards' payments of the cost responsibility surcharge did not make it a direct access customer, as the charges were used, for administrative ease, to recover certain nonbypassable charges from Edwards that Edwards remained responsible for and would have paid under SCE's standard retail generation rate, which Edwards was not paying under its Power Displacement Agreement which allows it to use bulk supplies from WAPA.

The Alliance for Retail Energy Markets did not necessarily object to Edwards' petition so long as Edwards' claim that no other direct access customers will be harmed is true. In particular, AReM noted that while, generally, increasing both the load cap and baseline to reflect Edwards' 218 GWh would not impact the room available under the cap, AReM cited several adjustments which may be required to ensure that current DA customers aren't affected.

For example, AReM noted that Edwards' petition fails to acknowledge that D.10-03-022, the PUC's order on the load cap, requires SCE to periodically adjust the baseline to reflect 12 months of load associated with the customers on DA. If load at Edwards increases over time, then recategorizing Edwards as DA load will reduce the ability for other customers to move to DA service, unless adjustments are made.

AReM also raised issues concerning Edwards' status as direct access load, and whether it (or its supplier) would be required to meet the electric service provider bonding requirement, as well as various obligations such as Resource Adequacy and RPS, which electric service providers are required to meet.

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