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PACIFIC GAS AND ELECTRIC COMPANY

appendix 7A

DISCUSSION OF 2003 GENERAL RATE CASE AND OTHER REGULATORY COMMITMENTS

General Rate Case Settlement Compliance

On May 2, 2004, the Commission issued Decision 04-05-055, which approved a settlement of PG&E’s 2003 General Rate Case. As part of the settlement, PG&E made various commitments concerning customer inquiries. Of the commitments, Item 21 of Appendix B of the settlement is relevant to the activities described in this chapter. Item 21 states: “PG&E will explore alternatives for securing lower fees for customers who choose to pay their PG&E bills via debit or credit card when its contact expires with Bill Matrix on May 31, 2004. (Ex. 403, p. 25).”

PG&E issued a Request for Proposal on December 14, 2004 for pay by phone services. Of the 22 bidders, the winning entity was NCO Financial. PG&E and NCO Financial entered into an agreement on June 1, 2005. This agreement will lower the customer’s debit fee from $2.95 to $1.40 per transaction. In addition, customers will now have an “e-check option” to circumvent “pin-less debit” cards, also at $1.40 per transaction. Once PG&E takes credit cards, the agreement sets a flat $2.10 blended customer convenience fee for all payment types, including debit, e-check and credit cards, with no cap on the payment amount. (This blended fee would rise to $2.10 because of the increased cost of processing credit card payments.)

Mobile Home Park Billing Service Analysis

On March 13, 2003, the CPUC issued OIR 03-03-017 and OII 03-03-018 to “Re-Examine the Underlying Issues Involved in the Submetering Discount for Mobile Home Parks and to Stay D.01-08-040.” In Decision 04-11-033, (which was the final decision for those proceedings), the CPUC determined that “[c]alculating bills, including the calculation of refunds to tenants, as well as the application of rate discounts, such as the CARE program, can be difficult for the [mobile home park (MHP)] owner, and may lead to billing errors and disputes with tenants.”[[1]] Hence, the CPUC ordered in this same decision, “[i]n their next revenue requirement proceedings, the electric and gas utilities shall provide an analysis of the costs, benefits, and feasibility of providing bill calculation services to MHP owners. The utilities shall also provide examples of the appropriate tariff language, and an estimate of the rates necessary to recover the full costs of such services from the MHP owners.”[[2]] Accordingly, PG&E has analyzed the costs and benefits of providing such bill calculation services and has determined the most cost-effective solution is making bill calculation spreadsheets available to mobile home park owner over the internet.

As of December 31, 2004, PG&E had the following number of mobile home park customers:

Table 7A-1

pacific gas and electric company

Mobile Home Park Customers as of December 31, 2004

|Line No. |Customer Type |Gas |Electric |

|1 |Individually metered |961 |1,363 |

|2 |Submetered |80,531 |88,181 |

| | | | |

Specifically, PG&E’s bill calculation spreadsheets — one for gas and another for electric — will allow those mobile home park owners who submeter tenants to input the submetered reads into a modified Excel spreadsheet. The spreadsheet would automatically calculate amounts owing from the respective submetered tenants, using E-1 electric and G-1 gas rate schedules. PG&E would make these spreadsheets available on PG&E’s public internet website for mobile home park owners.

Mobile home park owners would use the gas and electric spreadsheets as follows. First, they would download the spreadsheets from PG&E’s public website and save the spreadsheet on their personal computer. Second, they would enter the submetered customer’s name or space number, whether or not the customer was medical or CARE-eligible, and the beginning and ending meter reads and meter read dates. The spreadsheets would compute the applicable E-1 and G-1 charges. Finally, the customer would save the finished spreadsheet to his or her personal computer.[[3]]

Providing bill calculation spreadsheets via the internet minimizes the costs of providing MHP billing services. PG&E estimates that it will take approximately three person-months of work ($48,000) to make the spreadsheet ready for internet use and about one person-month each year ($16,000) to maintain the spreadsheets and post them to PG&E’s website. Given these limited development expenses, PG&E would not propose to charge mobile home park owners a fee for spreadsheet development costs.[[4]] Using the spreadsheet would also help mobile home park owners avoid Electronic Data Interchange (EDI) costs.[[5]]

PG&E proposes to add the following language to its residential rate schedules describing the warranties, liabilities, and limitations of the proposed residential billing calculator to be used by PG&E master-metered customers for the purpose of billing their submetered tenants on PG&E’s filed rate schedules:

Customers choosing to use PG&E’s residential bill calculator do so at their option and assume all risk associated with such use. The use of the bill calculator does not relieve the customer from any specific or implied obligations described California Public Utilities Code Section 739.5, PG&E’s Gas and Electric Rule 18 or any other obligations prescribed by law.

PG&E’s rate design, rates, and calculation method may change. Therefore, the user assumes all risks associated with the input, calculation and results provided by the bill calculator.

PG&E makes no express or implied warranties or representations in respect to this bill calculator or any content made available through or on the website. PG&E shall not be liable for any damages (direct, special, punitive, consequential, incidental, or indirect) arising from, out of, or related to the user’s use of the bill calculator.

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[[1]] D.04-11-033, Finding of Fact 65, page 40.

[[2]] D.04-11-033, Ordering Paragraph 12, page 49.

[[3]] PG&E’s spreadsheet would need to be updated for electric and gas rate changes. The effective date of the rates in the spreadsheet would be noted. Under PG&E’s proposal, the mobile home park owner would be responsible for the data input accuracy and for storing spreadsheet results.

[[4]] PG&E will include any recurring annual expenses related to the MHP billing services, as part of the master meter discount in future GRC Phase 2 (electric) or Biennial Cost Allocation Proceeding (gas) rate proceedings.

[[5]] In comparison, PG&E estimates that the expenses of modifying the customer information system (CDx) to compute and generate typical PG&E “blue bills” for submetered mobile home park customers would be approximately $1 million. Moreover, PG&E’s ongoing costs would increase as well due to the need to exchange data with mobile home park owners via EDI, thereby incurring EDI expenses as well. Given the limited number of mobile home park customers (see Table 7A-1), PG&E believes that the relatively large investment required to modify CDx to provide these services is not cost-effective, and thus, PG&E is not proposing that CDx-based service be pursued. If PG&E were directed to pursue a CDx-based service, PG&E would expect to charge mobile home park owners a significant bill calculation service fee.

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