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ALJ/DKF/hkr Date of Issuance 12/19/2008

Decision 08-12-054 December 18, 2008

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Application of Pacific Gas and Electric Company To Revise Its Electric Marginal Costs, Revenue Allocation, and Rate Design.

(U 39 M)

Application 06-03-005

(Filed March 2, 2006)

DECISION GRANTING INTERVENOR COMPENSATION
TO THE UTILITY REFORM NETWORK AND VOTE SOLAR INITIATIVE
FOR SUBSTANTIAL CONTRIBUTION TO DECISION 07-09-004
AND DENYING COMPENSATION
TO AGRICULTURAL ENERGY CONSUMERS ASSOCIATION

TABLE OF CONTENTS

Title Page

DECISION GRANTING INTERVENOR COMPENSATION
TO THE UTILITY REFORM NETWORK AND VOTE SOLAR INITIATIVE
FOR SUBSTANTIAL CONTRIBUTION TO DECISION 07-09-004
AND DENYING COMPENSATION
TO AGRICULTURAL ENERGY CONSUMERS ASSOCIATION 22

Findings of Fact 3636

Conclusions of Law 3737

ORDER 3737

Appendix

DECISION GRANTING INTERVENOR COMPENSATION
TO THE UTILITY REFORM NETWORK AND VOTE SOLAR INITIATIVE
FOR SUBSTANTIAL CONTRIBUTION TO DECISION 07-09-004
AND DENYING COMPENSATION
TO AGRICULTURAL ENERGY CONSUMERS ASSOCIATION

This decision awards The Utility Reform Network (TURN) $115,398.73 and Vote Solar Initiative (VSI) $23,088.75 in compensation for their substantial contributions to Decision 07-09-004. This represents a decrease of $21.25 from amount requested by TURN due to the $520/hour 2007 rate for Michel Florio and a decrease of $7,915.00 [or 25.5%] from the amount requested by VSI due to hours disallowed because of lack of any identified activity and a 25% reduction for duplicative work. The request by Agricultural Energy Consumers Association is denied due to a lack of documentation and incomplete information about its compensation factor.

1. Background

Consistent with the Commission's Rate Case Plan (RCP), Pacific Gas and Electric Company's (PG&E) general rate case (GRC) was considered in two phases. Phase 1 considered revenue requirement issues and Phase 2 considered marginal cost, revenue allocation, and rate design issues. PG&E filed its 2007 GRC Phase 1 Application (A.) 05-12-002 on December 2, 2005. PG&E's Phase 2 proposal was filed on March 2, 2006 as A.06-03-005.

Many public participation hearings (PPHs) were held at various locations in PG&E's service territory during April and May 2006 in A.05-12-002. Letters, electronic mail messages, and petitions representing the views of hundreds of ratepayers were also received at the Commission.

A prehearing conference (PHC) was held on May 3, 2006. On May 25, 2006, the Assigned Commissioner's Ruling and Scoping Memo was issued. Consistent with the Scoping Memo schedule, PG&E served updated testimony on June 26, 2006, Division of Ratepayer Advocates (DRA) served its testimony on September 13, 2006, and other parties served their testimony on October 27, 2006. A meet and confer session to consider settlement issues occurred on September 20, 2006. A mandatory settlement conference was then held on November 1, 2006. On November 6, 2006, PG&E, on behalf of the Settling Parties, contacted the assigned Administrative Law Judge (ALJ) David Fukutome and requested an extension of the schedule to accommodate further settlement discussions. That request was granted by ALJ Ruling of November 9, 2006. Subsequent requests for extensions of time to accommodate the settlement process were granted by ALJ Rulings of December 14, 2006, January 9, 2007, March 22, 2007, and April 24, 2007. An evidentiary hearing was held April 17, 2007.

The process produced seven settlement agreements, each with a different focus, five of which are implicated in the requests for compensation. Five rate design settlement agreements and the commercial building master meter settlement agreement were supplemental to the marginal cost and revenue allocation settlement agreement filed on February 9, 2007. The rate design settlement agreements use the revenue allocation agreed to in the MCRA and address rate design issues not resolved there. The marginal cost, revenue allocation, and rate design phase of this application was submitted for decision on May 25, 2007. We briefly describe below some elements of the settlements relevant to the instant requests for intervenor compensation.

· The Marginal Cost and Revenue Allocation Settlement (MCRA) (February 9, 2007) addressed three major issues: 1) marginal cost values to be employed for purposes of this settlement to establish the cost of providing service by rate group for the generation and distribution functions even though the parties disagreed on specific principles to calculate marginal costs; 2) electric revenue should be allocated on an overall revenue-neutral basis resulting in total bundled rates that increased only 2.8% for the residential class, 3.2% for non-CARE residential customers, and 4.0% for agricultural class; and 3) each customer group is to be held responsible for approximately the same percentage contribution to each component of rates by implementing changes to the revenue requirement for each component by applying to each rate schedule the same percentage change to rates by component required to collect the revenue requirement for that component, with specific exceptions. (Decision (D.) 07-09-004, pp. 6-7.)

· The Residential Rate Design Settlement (RRD) (March 16, 2007) described the manner in which residential rates would be designed and included, in part, the following components: 1) total bundled residential California Alternate Rates for Energy (CARE) rates remain unchanged subject to MCRA; 2) total bundled rates for usage up to 130% of baseline will not be changed so long as AB 1X's rate restrictions are effective, subject to certain caveats, and revenue increases and reductions to the residential class will be implemented as proportional changes to the generation surcharges in Tiers 3, 4, and 5; 3) if a reduction to the residential class in excess of 3% is expected, PG&E will consult with DRA and The Utility Reform Network (TURN) to determine the proper method of allocating that revenue between tiers, but rates for usage up to 130% of baseline will not be reduced; 4) distribution and generation rates for non-CARE residential rates would be collected in each tier in same proportion as generation and distribution revenue is allocated, prior to determining California Solar Initiative (CSI) rates; 5) CSI rate will be determined as an equal proportion of pre-CSI distribution revenue in each tier as required to collect the CSI revenue allocated to the non-CARE residential schedules; and 6) customers who aren't submetered are required to take service on Time-Of-Use (TOU) rate schedule in order to receive CSI incentives for installing solar systems and TOU schedules are extended to multi-family accounts.

· The Small Light and Power Rate Design Settlement (SLP) (April 27, 2007) described the manner in which rates for this customer class would be designed and included, in part, the following components: 1) updates to the basic rate designs for each of the applicable small light and power rate schedules; 2) an increase to the maximum demand limit from 500 to 1000 kilowatts (kW) for solar system capacity among participating Schedule A-6 customers who install a solar photovoltaic system; and 3) calculation of the CARE discount for commercial CARE customers under Schedule E-CARE shall be based on a rate per kW-hour (kWh) discount, rather than the current methodology to simplify billing and improve customer understanding.

· The Agricultural Rate Design Settlement (ARD) (May 4, 2007) described the manner in which agricultural rates would be designed and included, in part, the following components: 1) an overall 4% rate increase for the class; 2) increases to fixed monthly customer charges; and 3) methods for updating the schedules including a widening of TOU energy charge differentials and mitigation of summer maximum demand charges where necessary.

· The Commercial Building Master Meter Settlement (MM) (April 27, 2007) describes principles to govern the manner in which commercial building owners may allocate costs to their commercial tenants so that those tenants may receive price signals through the allocation of non-common master meter energy costs. Provisions include: 1) parties' agreement that is in the public interest that commercial building tenants receive price signals and have the opportunity to participate in dynamic pricing and energy conservation programs; 2) Building Owners and Managers Association (BOMA) agreement to encourage its membership to participate in dynamic pricing and energy conservation programs and to timely pass on to commercial tenants dynamic pricing and energy conservation options; 3) PG&E agreement to revise two internal Rules to implement MM settlement goals; 4) clarification that no new utility relationships or contracts are formed between PG&E, owners and tenants; and 5) a description of how dynamic pricing and energy conservation programs may be made available to commercial building tenants, and providing for the payment of associated costs. (D.07-09-004, pp. 13-14.)

D.07-09-004 adopted electric marginal costs and principles for allocating revenue to customer classes, as well as design of rates.1 All of the settlements were adopted. Revised rates were effective November 1, 2007 allowing PG&E to collect the revenue requirement determined in Phase 1 of its 2007 GRC, and as modified by subsequent revenue requirement authorizations.

1 This decision only addresses the requests for compensation related to contributions to D.07-09-004. D.07-05-048 awarded AECA intervenor compensation solely related to D.06-11-030. Intervenor compensation requested by TURN in relation to D.08-07-045, also issued in this proceeding, is pending.

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