4. Protest
This application was protested by the Division of Ratepayer Advocates (DRA). The Coalition for California Utility Employees (CCUE) was an interested party. On June 5, 2009, and prior to an evidentiary hearing, DRA distributed prepared testimony summarizing its opposition to the application and recommendations. CCUE did not distribute any prepared testimony.
In its prepared testimony, DRA concurred with PG&E that a
three-year target to reach a 100% funding goal creates significant rate shock.7 To mitigate rate shock, DRA proposed a nine-year rolling funding amortization period over PG&E's proposed seven-year period which would reduce PG&E's revenue requirement by an additional $28.4 million to an annual $286.4 million revenue requirement from $314.8 million.8 DRA also recommended that PG&E use its Pension Plan credit balance to satisfy 50% of its minimum required contribution for the next three years.9
DRA opposed PG&E's annual Advice Letter proposal because the Advice Letter process allows for only a 30-day period to protest, insufficient time to scrutinize PG&E's request. However, DRA does not oppose allowing the Advice Letter process over the next three years as a safeguard to prevent underfunding if the funded ratio falls below 80%.
DRA concluded that the GRC process is the appropriate place to scrutinize pension costs including changes in current and future pension law; periodic reevaluation of actuarial assumptions; and consistency in payroll increases, revenue requirement factors, and related issues.
7 Exhibit 4, p. 3.
8 Id., p. 2.
9 Credit balance consists of money contributed to the pension plan and earned interest on plan assets that is over and above the minimum required contribution in any given year.
