Conclusions of Law
1. Evidentiary hearings are not necessary.
2. Given its concerns about cost shifting, the Commission did not give the IOUs blanket approval to re-negotiate nonbypassable charges without further Commission review and approval.
3. The filing of an application for approval of the NBC Agreement is appropriate because the NBC Agreement raises policy questions addressed in R.02-01-011 concerning cost shifting, and the Commission must determine if the agreement contravenes any Commission decisions or other law, and the extent, if any, that the agreement may shift costs to PG&E's bundled customers.
4. D.08-09-012 determined that MDL and CGDL customers should not pay any NBCs related to new generation resources that were not procured on their behalf, that new generation resources were not procured on behalf of MDL and CGDL customers, and, therefore, the fair share of these customers is "zero."
5. Section II.H of the proposed NBC Agreement should be modified because it may inappropriately bind the Commission, if, in the future, the Commission directs PG&E to bill and collect any new NBCs related to generation sources.
6. The NBC Agreement, as modified by and subject to the conditions set forth in this decision, is in the interest of PG&E and its customers because, without an agreement, PG&E will continue to experience a high rate of uncollectibles and possibly incur significant additional administrative and legal costs to collect unpaid NBCs, and those costs will be borne primarily by PG&E ratepayers.
7. The NBC Agreement, as modified by and subject to the conditions set forth in this decision, does not result in any cost-shifting to PG&E ratepayers.
8. Section II.C of the NBC Agreement is consistent with the exemption set forth in PG&E Schedule E-NMDL, Special Condition 2.e., and is reasonable.
9. The NBC Agreement, as modified by and subject to the conditions set forth in this decision, is in the interest of the Districts and their customers because it reasonably and finally resolves all issues surrounding the billing and collection of NBCs from NMDL Customers served by the Districts.
10. PG&E should be required to apply the amounts paid by the Districts pursuant to the NBC Agreement toward the costs for which the NBCs were established to recover.
11. The NBC Agreement, as modified by and subject to the conditions set forth in this decision, is reasonable, consistent with the law, and in the public interest. The Application should be granted and the NBC Agreement should be approved, as modified by and, subject to the conditions set forth in this decision.
12. PG&E should send a follow up letter to NMDL Customers served by the Districts informing them of the termination of PG&E's billing and collections obligations to NMDL Customers served by the Districts. A draft of the letter should be submitted to the Director of the Energy Division for review and approval prior to distribution.
13. PG&E should remit Bond Charge amounts to DWR for the NMDL Customers served by the Districts in accordance with the terms of the NBC Agreement approved in this decision. To the extent that the collection and remittance procedures adopted here are inconsistent with those reflected in the Servicing Order adopted in D.07-03-025, or any subsequent Servicing Order that may be adopted by the Commission, the procedures adopted here should be followed with respect to the NMDL Customers served by the Districts.
14. Because the remittances made to DWR pursuant to the NBC Agreement will be lump sum payments that do not conform to the data reporting templates set forth in Attachment C of the Servicing Order, PG&E should be required to provide DWR with the name of the municipal entity making the payment, the date of payment to PG&E by the municipal entity, the amount of DWR remittance, and that the remittance is for Bond Charges.
15. Applicants should be required to establish arrangements, consistent with the nondisclosure provisions of the NBC Agreement and Rule 12.6, to allow PG&E to provide DWR with sufficient information to determine the remittances related to DWR Bond Charges provided in the NBC Agreement.
16. With the Applicants' consent, DWR may receive information from settlement negotiations that is sufficient to determine the remittances and discounts that may be provided under the NBC Agreement related to DWR Bond Charges.
17. This proceeding is not the appropriate forum to consider DWR's recommendations concerning bilateral agreements, generally, or other specific bilateral agreements, in particular, because parties to other bilateral agreements have not received notice or an opportunity to be heard concerning DWR's recommendations.
18. A.09-06-023 should be closed.
IT IS ORDERED that:
1. The Nonbypassable Charge Agreement between the Modesto Irrigation District and the Merced Irrigation District and Pacific Gas and Electric Company, attached to this decision as Attachment 1, is approved as modified by Ordering Paragraph Nos. 2 and 3, subject to the conditions set forth below in OP Nos. 4 through 7.
2. Section II.E of the Nonbypassable Charge Agreement between the Modesto Irrigation District and the Merced Irrigation District and Pacific Gas and Electric Company is modified as shown in Attachment 1 (deleted text is shown in strikethrough font and inserted text is underlined).
3. Section II.H of the Nonbypassable Charge Agreement between the Modesto Irrigation District and the Merced Irrigation District and Pacific Gas and Electric Company is modified as shown in Attachment 1 (deleted text is shown in strikethrough font and inserted text is underlined).
4. Pacific Gas and Electric Company (PG&E) must promptly send a letter to New Municipal Departing Load customers served by the Modesto Irrigation District and the Merced Irrigation District informing them of the termination of PG&E's billing and collections obligations to New Municipal Departing Load customers served by the Districts. PG&E must provide a draft of the letter to the Director of the Commission's Energy Division for review and approval prior to distribution.
5. Applicants must establish arrangements, consistent with the nondisclosure provisions of Servicing Order adopted in Decision 07-03-025, the nonbypassable charge agreement between the Modesto Irrigation District and the Merced Irrigation District and Pacific Gas and Electric Company (NBC Agreement), and Rule 12.6 of the Commission's Rules of Practice and Procedure, to allow Pacific Gas and Electric Company to provide the Department of Water Resources (DWR) with sufficient information for DWR to accurately determine the remittances related to DWR Bond Charges provided in the NBC Agreement.
6. When remitting Bond Charges to the Department of Water Resources (DWR) in connection with the nonbypassable charge agreement between the Modesto Irrigation District and the Merced Irrigation District and Pacific Gas and Electric Company (PG&E) approved by this decision, PG&E must provide DWR with the name of the municipal entity making the payment, the date of payment to PG&E by the municipal entity, the amount of DWR remittance, and state that the remittance is for Bond Charges.
7. Pacific Gas and Electric Company must remit Bond Charges to the Department of Water Resources in accordance with the terms of the nonbypassable charge agreement between the Modesto Irrigation District and the Merced Irrigation District and Pacific Gas and Electric Company approved by this decision. To the extent that the collection and remittance procedures adopted in this decision are inconsistent with those reflected in the Servicing Order adopted in Decision 07-03-025, or any subsequent Servicing Order that may be adopted by the Commission, the procedures adopted in this decision must be followed with respect to the New Municipal Departing Load customers served by the Modesto Irrigation District and the Merced Irrigation District.
8. Application 09-06-023 is closed.
This order is effective today.
Dated November 19, 2010, at San Francisco, California.
MICHAEL R. PEEVEY
President
DIAN M. GRUENEICH
JOHN A. BOHN
TIMOTHY ALAN SIMON
NANCY E. RYAN
Commissioners
