6. All-Party Settlement Agreement

An All-Party Settlement Agreement (Settlement), attached as Attachment A to this decision, was filed on July 31, 2009. The Settlement provides for:

° A 100% pension funded goal over a reasonable period of years.

° Retaining the Pension Contribution Balancing Account.

° Annual pension contribution report.

6.1. Discussion of All-Party Settlement Agreement

We review the settlement under the requirements set forth in Rule 12.1(d). The rule provides that prior to approval the Commission must find a settlement reasonable in light of the whole record, consistent with law, and in the public interest. The parties believe that their Settlement satisfies each of those criteria.

The parties have developed a factual record, contained in the application, the transcripts of the prehearing conference and evidentiary hearing, prepared testimony introduced and received into evidence, and the joint statement of facts agreed to in the Settlement. After carefully reviewing the Settlement, we concur that the Settlement is reasonable in light of the whole record.

The parties assert that the Settlement Agreement is consistent with existing law. The Settlement Agreement meets the standard set in PG&E's 2003 GRC decision regarding pension contributions: "The need for ratepayer contributions to the Retirement Plan Trust should be based on the funding status of the Retirement Plan Trust. It is also consistent with D.05-12-046, in which the Commission recognized the possibility that PG&E's pension Plan had fallen below 100% funded status and provided PG&E the opportunity to file an application to include a Plan contribution in the 2006 revenue requirement. It is further consistent with D.06-06-014, adopting a 2006 Settlement among PG&E, DRA and CCUE to allow PG&E to include Plan contributions in its revenue requirement through 2009 projected to result in the Retirement Plan Trust being fully funded on January 1, 2010.

The Settlement is in the public interest because it allows PG&E to make pension contributions in 2001 through 2013 with the objective of PG&E's Retirement Plan Trust being fully funded by the beginning of 2019, assuming the trust earns 7.5% annually. By PG&E making contributions to its Retirement Plan Trust now, ratepayers may be saved from having to pay larger sums in the future to meet minimum contributions required by the Employee Retirement Income Security Act. Further, the Settlement retains PG&E's two-way Pension Contribution Balancing Account for differences between authorized contributions to the trust and (1) lower contributions for any reason and
(2) federally mandated higher contributions.

The pension funding issue identified in this proceeding has been equitably resolved with substantial support in the record by way of the application, prepared testimony and the Settlement. It also reasonable protects ratepayer interest by retaining PG&E's two-way Pension Contribution Balancing Account. Further, the sponsoring parties are fairly reflective of the affected interests.

The Settlement meets the Commission's requirement for adoption of a settlement agreement. When reviewed as a total product, each component is reasonable in light of the record, consistent with law, and in the public interest. The Settlement should be approved.

Pursuant to Rule 12.5, the adoption of this all-party settlement does not constitute approval of any principle or issue in this proceeding and should not be cited as precedent in any future proceeding.

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