3. Discussion

CalPeco contends that approval of its requests would benefit its California ratepayers, the Commission, and itself. CalPeco asserts that the Commission, CalPeco, and its customers will benefit from the additional information that will result from CalPeco being able to have a full year of actual operating and financial data to use in the evaluation and prosecution of CalPeco's first GRC application. CalPeco also asserts that the Commission has consistently recognized that the use of attrition mechanisms, like the PTAM, is in the public interest; that timely adjustments through attrition mechanisms enable "utility rates [to] better reflect actual costs" and best ensure "the financial health of the energy utilities;" and that use of the PTAM here will similarly be in the public interest.

No protests have been received.

In September 2011, Global Insight released its forecast of CPI. Based on the CPI Forecast for 2012 of 1.65% less a productivity factor of 0.5%, the PTAM Attrition Factor for 2012 is 1.15%.

Application of the PTAM Attrition Factor for 2012 to rates currently in effect will result in a proposed rate increase of approximately $ 278,821 or 1.15%. ECAC and surcharge revenues are excluded from this adjustment mechanism.

For the rate change associated with the PTAM Attrition Factor for 2012, the overall PTAM percentage change has been applied to all rate components which were approved in Sierra Pacific Advice Letter 364-E. Consistent with the terms of the PTAM, the proposed increase would result in the following changes by customer class, effective the date of this Decision: