PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Legal Division San Francisco, California

Date: June 23, 2011

Resolution No.: L-411A

R E S O L U T I O N

REVISED RESOLUTION ON THE COMMISSION'S OWN MOTION ESTABLISHING A MEMORANDUM ACCOUNT FOR ALL COST-OF-SERVICE RATE-REGULATED UTILITIES, EXCEPT FOR: CLASS C AND D WATER AND SEWER UTILITIES, MOUNTAIN UTILITIES, ALPINE NATURAL GAS, NRG ENERGY CENTER, SMALL LOCAL EXCHANGE CARRIER TELEPHONE CORPORATIONS AND THOSE ENERGY AND WATER UTILITIES THAT WILL BE ADDRESSING THE TAX RELIEF, UNEMPLOYMENT INSURANCE REAUTHORIZATION, AND JOB CREATION ACT OF 2010 IN A 2011 OR 2012 TEST YEAR GENERAL RATE CASE, TO ALLOW THE COMMISSION TO CONSIDER REVISING RATES TO REFLECT THE TAX RELIEF, UNEMPLOYMENT INSURANCE REAUTHORIZATION, AND JOB CREATION ACT OF 2010

SUMMARY

It has come to the Commission's attention that Resolution L-411, as approved by the Commission on April 14, 2011, contained a number of internal inconsistencies and other similar errors. Accordingly, we are issuing this revised Resolution L-411A to remove the inconsistencies, correct the errors, and clarify the Ordering Paragraphs of the original resolution. The effective date of the memorandum account established by the resolution remains April 14, 2011.

This resolution establishes a one-way memorandum account for all cost-of-service rate regulated utilities that do not address the New Tax Law in a 2011or 2012 test year General Rate Case proceeding, to track the impacts of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 ("New Tax Law" or "Tax Relief Act"). By its terms, however, this resolution exempts all Class C and D water and sewer utilities, Mountain Utilities, Alpine Natural Gas, NRG Energy Center, and small local exchange carrier telephone corporations. More specifically, the memorandum account established by this resolution will track on a CPUC-jurisdictional, revenue requirement basis: (a) decreases in each impacted utility's revenue requirement resulting from increases in its deferred tax reserve; and (b) other direct changes in revenue requirement resulting from taking advantage of the New Tax Law. This resolution also authorizes impacted utilities to use savings from this new tax law to invest in certain additional, needed utility infrastructure, not otherwise funded in rates, within a time frame shorter than would be practicable through the formal application or advice letter processes. The establishment of a memorandum account does not change rates, nor guarantee that rates will be changed in the future. This mechanism simply allows the Commission to determine at a future date whether rates should be changed, without having to be concerned with issues of retroactive ratemaking.