6. Advice Letter Process for
Certain Capital Projects

As described above, the settlement provides that part or all of certain capital projects be included in ratebase via an advice letter process after project completion. The settlement applies this treatment to six projects in the Los Angeles District, as described in Section 4.3.2 above, and to the El Monte Office Building renovation project within the company's General Division, as noted in Section 4.4.2. Specifically, the settlement provides that the actual recorded costs of each of these projects, not to exceed the estimated amounts agreed upon in the settlement, may be placed into ratebase once construction of the particular project is completed and it is placed into service. The settlement does not specify the type of advice letter to be filed with the Commission to place these projects in ratebase, but does require that San Gabriel file not more than two such advice letters per year during the term of the settlement.

In approving the settlement, we allow these projects to be included in ratebase through an advice letter process. In addition to approving the advice letter requirements contained in the settlement, we require San Gabriel to use Tier 2 advice letters for this purpose, and to serve each advice letter on the most recent service list for this proceeding, as well as on the service list required under Commission General Order 96-B.