Section 451 which requires that rates be “just and reasonable.” Section 382(b), as amended by AB 327, states that “electricity is a basic necessity” and that “all residents of the state should be able to afford essential electricity.” Section 382(b) directs the Commission to ensure that low-income ratepayers are not “jeopardized or overburdened by monthly energy expenditures.” Section 739 defines baseline quantity and, in Section 739(d)(1), requires that the Commission “establish an appropriate gradual differential between the rates for the respective blocks of usage.” Section 739.1, which was amended by AB 327, addresses the CARE program. Section 739.1(c) requires the average effective CARE discount to be between 30-35% “of the revenues that would have been produced for the same billed usage by nonCARE customers.” Section 739.9, which, pursuant to AB 327, replaced the prior Section 739.9, requires that any increases to electrical rates, including reductions in the CARE effective discount, “be reasonable and subject to a reasonable phase-in schedule relative to the rates and charges in effect prior to January 2014.” The Rate Design Principles Rate design proposals must attempt to balance the sometimes conflicting Rate Design Principles (RDP) developed in this proceeding to evaluate residential rate design options. The initial OIR set forth a preliminary list of principles for optimal rate design. (OIR at 20-21.) The OIR list echoed Commission decisions, such as D.08-07-045, and was similar to the “Bonbright principles.” After extensive input from the parties, including a workshop and written comments, the RDP were adopted by the Commission in the Phase 2 Decision: Low-income and medical baseline customers should have access to enough electricity to ensure basic needs (such as health and comfort) are met at an affordable cost; Rates should be based on marginal cost;
Section 451 which requires that rates be “just and reasonable.” Section 382(b), as amended by AB 327, states that “electricity is a basic necessity” and that “all residents of the state should be able to afford essential electricity.” Section 382(b) directs the Commission to ensure that low-income ratepayers are not “jeopardized or overburdened by monthly energy expenditures.” Section 739 defines baseline quantity and, in Section 739(d)(1), requires that the Commission “establish an appropriate gradual differential between the rates for the respective blocks of usage.” Section 739.1, which was amended by AB 327, addresses the CARE program. Section 739.1(c) requires the average effective CARE discount to be between 30-35% “of the revenues that would have been produced for the same billed usage by nonCARE customers.” Section 739.9, which, pursuant to AB 327, replaced the prior Section 739.9, requires that any increases to electrical rates, including reductions in the CARE effective discount, “be reasonable and subject to a reasonable phase-in schedule relative to the rates and charges in effect prior to January 2014.” The Rate Design Principles Rate design proposals must attempt to balance the sometimes conflicting Rate Design Principles (RDP) developed in this proceeding to evaluate residential rate design options. The initial OIR set forth a preliminary list of principles for optimal rate design. (OIR at 20-21.) The OIR list echoed Commission decisions, such as D.08-07-045, and was similar to the “Bonbright principles.” After extensive input from the parties, including a workshop and written comments, the RDP were adopted by the Commission in the Phase 2 Decision: Low-income and medical baseline customers should have access to enough electricity to ensure basic needs (such as health and comfort) are met at an affordable cost; Rates should be based on marginal cost;