XI. DWR Revenue Requirement Implications
for Utility Rate Needs

In today's decision, we make no changes in the existing overall rate levels being charged to end-use customers of the three utilities. Any overall rate changes for SDG&E customers will be addressed in a separate order in A.00-10-045 et al. Any rate changes for PG&E customers will be addressed in these consolidated dockets. SCE customers' rate levels are currently frozen in accordance with the settlement that it has recently entered into. In this decision, we simply order the three electric utilities to remit to DWR its revenue requirement as provided to us, as modified herein, and as collected from end-use retail customers in those utilities' service territories through application of the charges we approve today. As previously discussed, any rate adjustments for the respective utilities will be addressed in conjunction with the URG phase in the applicable dockets.

We recognize that the utilities still incur ongoing expenses for their own URG, that is, the generation that remains under the control of the utilities. Proceedings are currently underway in a separate phase of these dockets to adopt revenue requirements for the URG-related costs for PG&E and SCE, respectively. Pending our subsequent adoption of URG revenue requirements, and other issues such as the Commission's pending decision on the timing of the suspension of direct access, we cannot be certain whether revenues now being collected by the utilities through existing rates will be sufficient both to fund the DWR requirement and the URG requirements. We will not prejudge the subsequent outcome of the URG phase of these proceedings. Based upon the estimates of URG revenue requirements that have been submitted as testimony in that phase by PG&E and SCE, however, we note that there is a range of potential outcomes that could be decided by the Commission. Depending on the amount within that range the Commission ultimately adopts, there could be either a shortfall or surplus of revenues for PG&E or SCE, respectively. We will address these possibilities, as necessary, in future proceedings. We acknowledge the need to promptly consider and act upon any financial consequences, as warranted, that may result from our order today.