Assignment of Proceeding
Loretta M. Lynch is the Assigned Commissioner and Bruce DeBerry is the assigned ALJ in this proceeding.
1. The surcharge supports low-income programs that embody public policy goals not directly related to the provision for gas service.
2. All funds remitted to BOE should be returned to the utilities in a timely manner to fund PPP.
3. BCAP estimated throughput gas volumes, or recent test year estimates, are the most accurate gas volume projections for calculating the surcharge.
4. Utility tariffs are intended to provide qualifications for service.
5. Interstate pipeline customers are not obligated to pay franchise fees.
6. AB 1002 was passed into law by more than a two-thirds vote of the Legislature.
7. As a result of implementing AB 1002, newly exempt customers are no longer required to pay the surcharge resulting in a shortfall in surcharge revenues.
8. This is a quasi-legislative proceeding; thus, some parties interested in ratemaking may not have participated.
9. Ratepayers should receive interest on deposited amounts in balancing accounts held by utilities.
10. A working cash allowance compensates investors for funds provided by them for the purpose of paying expenses in advance of receipt of offsetting revenues.
11. It would be unfair to small utility customers to allocate administrative costs based on the number of utilities paying into the Fund.
12. Allocating administrative costs based on utility gas volumes is reasonable.
13. Utility surcharge rates should reflect utility specific PPP costs.
14. If past default rates exceeded utility specific surcharge rates, then the over-remitted funds should be returned to the utilities, and applied to appropriate surcharge-related accounts.
15. A reasonable surcharge rate for non-exempt customers residing outside of any utility service territory is the rate used in the service territory in closest proximity to the customer.
16. Customer surcharges should be remitted to the utility in whose service territory the customer resides regardless of the utility serving the customer.
17. Third party gas storage non-exempt customers should pay the surcharge to the utility that operates in the utility service territory in which the customer resides.
18. The adopted definition of public interest R&D defines the types of projects that qualify as public interest gas R&D.
19. Public interest R&D activities are those directed towards developing science or technology, the benefits of which accrue to California citizens and are not adequately addressed by competitive or regulated entities.
20. The R&D administrator shall provide a list of recommended R&D projects to the Commission by August 31, prior to the January 1 effective R&D program date.
21. CURC is not currently functioning as an organization.
22. Parties agree that R&D administration should be conducted on a statewide basis, support state energy policy, include Commission review and approval of R&D programs and budgets, avoid conflicts of interest, utilize an efficient and capable administrator, coordinate with other energy programs, and consist of a single administrator.
23. CEC currently administers the PIER program, and develops and enforces statewide energy policies under legislative authority.
24. UC currently administers several energy programs.
25. Public interest gas R&D funding levels have declined over the past 10 years.
26. Gas is a vital resource in the economic future of California and the nation.
27. Adopting an R&D funding level equivalent to current amounts, and without opportunity to increase, would diminish the value of R&D programs.
28. A zero-based R&D budget with a cap of $12 million beginning in 2005 is a reasonable approach for funding gas R&D.
29. It is reasonable to allow the R&D funding level to increase in future years in order to maintain the value of R&D programs.
30. The Commission should have a role in overseeing gas R&D programs and budgets.
31. Section 740.1 provides a guide for determining the selection of R&D projects.
32. Reasonable criteria for R&D project selection include a focus on energy efficiency, renewable technologies, conservation and environmental issues, support of State energy policy, a reasonable probability of providing benefits to the general public, and opportunities for collaboration and co-funding with other entities.
1. Section 890(h) authorizes BOE to collect the gas surcharge from interstate non-exempt pipeline customers who might otherwise avoid surcharge payments.
2. Section 896, and California Energy Resources Surcharge Regulations 2315 and 2316, exempt certain gas customers from surcharge payments.
3. Section 890(2) provides utilities with a solution to the problem of worthless customer accounts.
4. AB 1002 does not state that R&D funding levels must be maintained at current levels.
5. Sections 890(a) and (d) direct the Commission to establish a natural gas surcharge for certain specified PPPs and annually determine the amounts required to administer and fund these programs for each utility.
IT IS ORDERED that:
1. Assembly Bill (AB) 1002 shall be implemented in accordance with the Energy Division's Workshop Report as filed on December 9, 2003, except as otherwise addressed in this decision.
2. Pacific Gas and Electric Company's (PG&E) Advice letters (AL) 2440-G and 2440 - G - A are approved subject to the modifications discussed in this decision. PG&E shall file a supplement to AL 2440-G-A within 30 days of the effective date of this decision reflecting these modifications, subject to Energy Division approval.
3. Respondent utilities shall identify the gas surcharge as a separate line item on customers' bills within six months of the effective date of this decision. Required billing system changes can be implemented along with regular monthly rate changes immediately following the six-month deadline.
4. Respondent utilities shall identify all exempt customers who they serve within six months of the effective date of this decision.
5. Respondent utilities shall annually review their customer accounts, and refund surcharge revenues received from exempt customers, or any over-payments plus applicable interest and return these amounts within 30 days after identification, unless previously refunded by State Board of Equalization (BOE).
6. Respondent utilities shall inform the BOE of any refunds issued.
7. Respondent utilities shall refund any surcharge amounts received from exempt interstate pipeline customers or over-payments from non-exempt interstate pipeline customers, plus applicable interest, within 30 days after identification, unless previously refunded by BOE.
8. Respondent utilities shall return with accrued interest, any surcharge amount that was collected from exempt customers, within 60 days following the implementation of system changes required in Ordering Paragraph 3, unless previously refunded by BOE.
9. Respondent utilities shall provide the BOE with the names and addresses of all known California interstate pipeline customers.
10. Respondent utilities shall calculate surcharge rates using the surcharge formulas provided in this decision.
11. Respondent utilities shall exclude gas surcharge amounts in determining franchise payments.
12. Respondent utilities shall pay interest at the three-month commercial paper rate on surcharge amounts in the possession of utilities before remittance to BOE and credit this interest to the appropriate PPP balancing accounts.
13. Respondent utilities shall file ALs to establish or modify their balancing and/or memorandum accounts to facilitate the unbundling of public purpose program costs from their rates, treatment of interest accrued in the Fund, and to account for the adopted research and development (R&D) procedures, within 30 days of the effective date of this decision.
14. Commission and BOE administrative costs, and public interest R&D incurred as a result of implementing AB 1002, shall be allocated to utilities based on gas volumes used by the utilities in calculating remittances to BOE.
15. Third party gas storage providers shall provide annual customer lists to BOE and the Commission.
16. Non-exempt third party gas storage customers shall pay gas surcharges to the utility in whose service territory the customer resides. The surcharge shall be based on the appropriate surcharge for the service territory in which the customer resides.
17. Approved R&D projects shall meet the criteria discussed in this decision.
18. The California Energy Commission is appointed as administrator of the gas R&D program until further action by the Commission.
19. The funding level, including administration, for R&D in 2005 will be determined upon review and approval by the Commission, subject to a cap of $12 million, to be funded by the gas PPP surcharge. Additional increases in annual gas R&D budgets after 2005 will be considered and approved as discussed in this opinion.
20. R&D funds shall be remitted by the utilities quarterly to BOE used for distribution to the administrator to cover R&D project and administration costs consistent with the zero based budget and spending cap.
21. Any commercial benefits that result from the expenditures authorized in this opinion shall be brought to the Commission by the administrator to the Energy Division, and the Commission shall determine the disposition of such commercial benefits.
22. Respondent utilities shall file annual ALs, with proposed surcharge rates, by October 31, with a requested effective date of January 1 of the next year.
23. Respondent utilities shall provide copies of quarterly BOE remittances, including R&D amounts, to the Energy Division and the R&D administrator with returns held on a confidential basis.
24. Respondent utilities shall continue public interest R&D and end, or transfer, projects to the administrator by December 31, 2004 and report any unspent R&D funds to the Energy Division for use in future R&D programs. (See p. 36, supra.)
25. Respondent utilities shall file separate tariff rate schedules that reflect the adopted surcharge rates no later than January 1, 2005.
26. The administrator shall file an R&D report by March 31 each year. (See p. 39, supra.)
27. Rulemaking 02-10-001 is closed.
This order is effective today.
Dated August 19, 2004, at San Francisco, California.
MICHAEL R. PEEVEY
President
CARL W. WOOD
LORETTA M. LYNCH
GEOFFREY F. BROWN
SUSAN P. KENNEDY
Commissioners
************* APPEARANCE *************
************ APPEARANCES ************ |
Monica L. McCrary |
Steven D. Patrick |
********** STATE EMPLOYEE *********** |
Stephen J. Rutledge |
Bruno Jeider |
Carolyn M. Kehrein |
Enrique Gallardo |
Sheryl Carter |
Central Files |
Alex Goldberg |
(END OF APPENDIX A)
