6.2. Do the Districts Qualify for the Stand-Alone Exemption?

Section II.C of the NBC Agreement qualifies, for purposes of the NBC Agreement only, the NMDL Customers served by either of the Districts as of November 13, 2007 for the "stand-alone" exemption in PG&E Schedule E-NMDL, Special Condition 2(e). Special Condition 2(e) provides that "New Municipal Departing Load taking service from a POU without the use of transmission and distribution facilities owned by PG&E is exempt from ongoing CTC." According to Applicants, November 13, 2007 is the date that the Westley-Tracy transmission line was energized.

Res. E-4064 approved Special Condition 2(e) after clarifying that, consistent with D.03-07-028, as modified by D.03-08-076, the exemption applies only to ongoing (i.e., "Tail") CTC and not other NBCs.²⁵ D.03-07-028, as modified by D.03-08-076, determined that, for purposes of CTC recovery, "new load" excludes load met through a direct transaction that does not otherwise require the use of transmission and distribution facilities owned by the IOU.²⁶

Applicants state that the Westley-Tracy transmission line is a double circuit 230 kilovolt (kV) transmission line extending approximately 30 miles from Westley to Tracy.²⁷ According to Applicants, the first circuit was energized in December 1995. The Modesto Irrigation District (ID) subsequently entered into an agreement with WAPA to connect the second circuit at WAPA's Tracy Substation, and this second circuit was energized in November 2007.

Applicants state that ownership and all costs of the Westley-Tracy transmission line are shared equally between Modesto ID and Turlock ID, that Modesto ID presently operates the Westley-Tracy transmission line, and that Merced ID is solely interconnected with Turlock ID. Thus, the NMDL Customers served by the Districts have been taking service from a POU without the use of transmission and distribution facilities owned by PG&E since November 13, 2007, and are exempt from ongoing CTC, pursuant to PG&E Schedule E-NMDL, Special Condition 2.e.

Section II.C of the NBC Agreement is consistent with the exemption set forth in PG&E Schedule E-NMDL, Special Condition 2.e. Therefore, the exemption provided under Section II.C of the NBC Agreement is reasonable and should be approved.

²⁵ See Res. E-4064, Finding of Fact No. 17.

²⁶ Conclusion of Law No. 12.

²⁷ August 30, 2010, Applicant's Response to ALJ's Ruling at 4.