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COM/MP1/rg1/acb Mailed 12/23/03
Decision 03-12-061 December 18, 2003
BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA
Application of Pacific Gas and Electric Company Proposing a Market Structure and Rules for the Northern California Natural Gas Industry for the Period Beginning January 1, 2003 as Required by Commission Decision 01-09-016. (U 39 G)
(Filed October 8, 2001)
OPINION REGARDING THE GAS STRUCTURE AND RATES
FOR PACIFIC GAS AND ELECTRIC COMPANY FOR 2004
TABLE OF CONTENTS
I. Summary 22
II. Background 33
III. 2004 Gas Structure and Beyond 66
IV. Winter Reliability Standard and Winter Firm Capacity Requirement 3535
V. Transmission Services 5656
VI. Storage Services 8888
VII. Contract Extension and Open Season 116116
VIII. Operations and Balancing 129129
IX. Operating and Maintenance Exenses 198198
X. Capital Expenditures 208208
XI. Cost of Service 222222
XII. Demand Forecast 226226
XIII. Cost Allocation and Rate Design 240240
XIV. Contingency Rate Adjustments 395395
XV. PG&E Procurement Policy and Core Procurement Services 401401
XVI. Core Aggregation Transportation Service 415415
XVII. Interconnection Services 435435
XVIII. California Gas Transmission Risk Management Program 453453
XIX. Future Gas Market Structure and Rate Filings 457457
XX. Conclusion 458458
XXI. Comments on Proposed Alternate Decision 459459
XXII. Assignment of Proceeding 459459
OPINION REGARDING THE GAS STRUCTURE AND RATES FOR
PACIFIC GAS AND ELECTRIC COMPANY FOR 2004
Pacific Gas and Electric Company (PG&E) filed the above-captioned application on October 8, 2001. PG&E's application requested that the Gas Accord1 structure and rates for its gas transmission and storage system be extended for two more years (through the end of 2004) pending the resolution of PG&E's bankruptcy filing.
In Decision (D.) 02-08-070, we approved a settlement by the parties which extended the Commission-approved market structure, rates, tariffs, and terms and conditions of service for PG&E's transmission and storage system by one year. Under the settlement, the market structure for PG&E's gas transmission service was extended for the period from January 1, 2003 to December 31, 2003, and PG&E's gas storage service was extended for the period from April 1, 2003 to March 31, 2004. Due to the adoption of the settlement, the issues regarding the gas structure and rates for the period beginning January 1, 2004 were unresolved.
Today's decision resolves the gas market structure, rates, and terms and conditions of service for PG&E's natural gas transmission and storage system for 2004. PG&E and the other parties proposed for resolution a number of structural and policy issues, as well as cost and rate design issues. Appendix B of the decision lists a matrix of the issues addressed in today's decision.
PG&E proposed a $453,736,000 revenue requirement for 2004 for its gas transmission and storage systems.2 PG&E's proposed revenue requirement represents an increase of 7% over the Gas Accord revenue requirement for 2003 of $423,923,000 million. Today's decision adopts a revenue requirement for 2004 of $436,397,000.3 The adopted revenue requirement represents an increase of 2.94% over 2003 gas transmission and storage rates of $423,923,000.
Today's decision also addresses the various cost allocation and rate design proposals of PG&E and the other parties. Since this decision adopts a cost allocation and rate design methodology that is very similar to what was contained in the Gas Accord, we expect that the gas transmission and storage rates and charges will rise slightly, reflecting the 2.94% increase in the revenue requirement.