"A significant slowdown has occurred in new power plant service extension requests. As a result, cost estimates for MWC 91 are anticipated to drop to $1.5 million and $3.3 million in 2003 and 2004, respectively."

47 PG&E notes that some of the capital expenditures are needed to meet governmental requirements, and that any mandated changes to these requirements may result in a change in the capital expenditures needed to fulfill these requirements. PG&E proposes to adjust funding for such changes, if they increase or decrease, through the Governmental Mechanism, which is discussed later in this decision. 48 According to PG&E, base capital expenditures include all capital projects that address regulatory compliance, safety, reliability, increased system capacity, efficiency, serving new customer load, and facility relocations. Base capital expenditures tend to be relatively consistent from year-to-year. 49 MWCs consolidate and categorize capital expenditures by asset and work activities. 50 Station reliability work includes costs associated with improving the safety and maintaining the reliability of the gas compression stations and underground gas storage facilities by replacing aging facilities. An example is the replacement of equipment that has high outage frequency or excessive maintenance costs. 51 Environmental work is for costs to modify or improve PG&E facilities in order to comply with environmental rules and regulations. An example of these expenditures is the installation of nitrous oxide emission reduction equipment at compressor stations. 52 The four small MWCs which make up this category consists of gas gathering, tools and equipment, office buildings, and gas system operations network systems. 53 See Exhibit 3 at pages 12-9 and 14-18, 7 RT 731-737, and 3 RT 259-260. 54 The December 2004 deadline could be moved up once the Secretary of Transportation issues regulations. 55 See Exhibit 3 at page 10-7, lines 6-11. 56 This reduction is based on the 35% percentage reduction for Power Plant Metering.

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