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STATE OF CALIFORNIA ARNOLD SCHWARZENEGGER, Governor
PUBLIC UTILITIES COMMISSION
505 VAN NESS AVENUE
SAN FRANCISCO, CA 94102-3298
November 18, 2003 Agenda ID #3004
TO: PARTIES OF RECORD IN APPLICATION 01-10-011
RE: NOTICE OF AVAILABILITY OF PROPOSED DECISION REGARDING THE
GAS STRUCTURE AND RATES FOR PACIFIC GAS AND ELECTRIC COMPANY FOR 2004
Consistent with Rule 2.3(b) of the Commission's Rules of Practice and Procedure, I am issuing this Notice of Availability of the above-referenced proposed decision. The proposed decision was issued by Administrative Law Judge (ALJ) Wong on November 18, 2003. An Internet link to this document was sent via e-mail to all the parties on the service list who provided an e-mail address to the Commission. An electronic copy of this document can be viewed and downloaded at the Commission's Website ( www.cpuc.ca.gov). A hard copy of this document can be obtained by contacting the Commission's Central Files Office [(415) 703-2045].
This is the proposed decision of ALJ Wong, previously designated as the principal hearing officer in this proceeding. It will not appear on the Commission's agenda for at least 30 days after the date it is mailed. This matter was categorized as ratesetting and is subject to Pub. Util. Code § 1701.3(c). Pursuant to Resolution ALJ-180 a Ratesetting Deliberative Meeting to consider this matter may be held upon the request of any Commissioner. If that occurs, the Commission will prepare and mail an agenda for the Ratesetting Deliberative Meeting 10 days before hand, and will advise the parties of this fact, and of the related ex parte communications prohibition period.
When the Commission acts on the draft decision, it may adopt all or part of it as written, amend or modify it, or set it aside and prepare its own decision. Only when the Commission acts does the decision become binding on the parties.
Parties to the proceeding may file comments on the draft decision as provided in Article 19 of the Commission's "Rules of Practice and Procedure." These rules are accessible on the Commission's website at http://www.cpuc.ca.gov. Pursuant to Rule 77.3 opening comments shall not exceed 15 pages.
Consistent with the service procedures in this proceeding, parties should send comments in electronic form to those appearances and the state service list that provided an electronic mail address to the Commission, including ALJ John Wong at email@example.com. Service by U.S. mail is optional, except that hard copies should be served separately on ALJ Wong, and for that purpose I suggest hand delivery, overnight mail or other expeditious methods of service. In addition, if there is no electronic address available, the electronic mail is returned to the sender, or the recipient informs the sender of an inability to open the document, the sender shall
immediately arrange for alternate service (regular U.S. mail shall be the default, unless another means - such as overnight delivery is mutually agreed upon). The current service list for this proceeding is available on the Commission's Web page, www.cpuc.ca.gov.
The Commission may act at the regular meeting, or it may postpone action until later. If action is postponed, the Commission will announce whether and when there will be a further prohibition on communications.
/s/ Angela K. Minkin
Angela K. Minkin, Chief
Administrative Law Judge
ALJ/JSW/avs DRAFT Agenda ID #3004
Decision PROPOSED DECISION OF ALJ WONG (Mailed 11/18/2003)
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 8989
VII. Contract Extension and Open Season 117117
VIII. Operations and Balancing 131131
IX. Operating and Maintenance Exenses 200200
X. Capital Expenditures 210210
XI. Cost of Service 223223
XII. Demand Forecast 227227
XIII. Cost Allocation and Rate Design 242242
XIV. Contingency Rate Adjustments 394394
XV. PG&E Procurement Policy and Core Procurement Services 401401
XVI. Core Aggregation Transportation Service 415415
XVII. Interconnection Services 434434
XVIII. California Gas Transmission Risk Management Program 452452
XIX. Future Gas Market Structure and Rate Filings 456456
XX. Conclusion 457457
XXI. Comments on Proposed Decision 458458
XXII. Assignment of Proceeding 458458
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 $437,564,000.3 The adopted revenue requirement represents an increase of 3.22% 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 3.22% increase in the revenue requirement.