16. DRA Motion to Reopen the Record
On February 17, 2009, DRA filed a motion to set aside submission and reopen the record for the taking of additional evidence in this proceeding. DRA requests that Attachment A to a February 10, 2009 PG&E Ex Parte Notice (Attachment A) be introduced into the record as an indication that substantially fewer meters, when compared to the 288,000 meters forecasted by PG&E in this proceeding, were actually deployed before HAN gateway devices became available to PG&E. Once this document is entered into the record, DRA requests that, if the Commission decides against DRA to fund the retrofit, funding should be limited to the cost of retrofitting the actual number of meters that were installed in 2008 rather than PG&E's forecasted numbers.
On February 18, 2009, PG&E responded to DRA's motion. PG&E indicates its opposition, arguing that DRA has not satisfied its burden in justifying its request118 and DRA's interpretation of the data in the Ex Parte Notice is fundamentally flawed. PG&E states that the final decision is already two months delayed beyond the schedule originally adopted for this case, and PG&E is at risk for Upgrade costs already incurred. If the record is reopened and the matter delayed, PG&E states that its costs and financial risk would be proportionately higher. PG&E also asserts that DRA's evaluation of the information contained in Attachment A contains errors and fails the high standard imposed by the Commission for reopening the record. According to PG&E, DRA misrepresents the number of meters that will require a HAN retrofit, and PG&E will actually end up spending more than its forecasted amount of $32 million to maintain the benefit stream for customers. To the extent that DRA seeks an opportunity to reduce costs based on its interpretation of actual deployment data, PG&E argues that it should have an equal opportunity to correct DRA's arguments and provide evidence that shows actual deployment costs are higher than forecasted.
16.1. Discussion
DRA's motion to set aside submission and reopen the record for the taking of additional evidence in this proceeding is denied, as explained below
That the deployment of electric and gas meters might vary, not only from what was originally planned but from updated deployment plans as time goes by, is not unexpected. The manner in which the final deployment of meters evolves will reflect how PG&E is able to manage the effects of factors such as the availability of materials and equipment, the regulatory process, and changes in technology as the deployment of meters is progressing. We must authorize a reasonable projected meter deployment cost based on information known and analysis conducted at a certain point in time. From that point on, we expect PG&E to manage its plans and costs in a manner that results in successful implementation of the Upgrade at or near the authorized funding levels while maximizing ratepayer value.
DRA's Motion to Reopen the Record raises the issue of determining the appropriate point in time to cut off the use of more recent information and related analyses in deciding what costs to authorize for the Upgrade. Normally that cut off point would be when prepared testimony and rebuttal testimony have been issued. That evidence can be tested through the evidentiary hearing process and critiqued in post hearing briefs.119 While under certain circumstances, it may well be appropriate to reopen the evidentiary record to consider more recent information and changed circumstances, this is not the case with respect to the more recent information contained in Attachment A.
As indicated by DRA, Exhibit 2 in Attachment A shows that during the second half of 2008 there was a significant reduction in the deployment of meters that will require a HAN retrofit when compared to the 288,000 such meters that were forecasted to be deployed during that timeframe in PG&E's May 14, 2008 testimony. However, there is additional information in Exhibit 2 in Attachment A that indicates, among other things, that (1) the total number of gas and electric meters that were actually deployed by the end of 2008 was greater than the total number of gas and electric meters forecasted to be deployed by the end of 2008 in PG&E's testimony; (2) the related benefits for the 2008 through 2010 time period were now forecasted to be larger based on the actual deployment, as opposed to the magnitude of benefits reflected in PG&E's testimony for that timeframe; and (3) the cost to maintain the benefit stream associated with the actual deployment of meters through February 10, 2009 is expected to be greater than the $32,032,000 in HAN retrofit costs reflected in PG&E's testimony.
It appears that PG&E has modified its meter deployment plan in response to changed circumstances. As explained above, such changes can be expected and may be reasonable. In this instance, it appears that there is a slight increase in benefits with the change. It also appears that the costs related to the changed plan, which includes costs to retrofit a reduced number of meters with HAN gateway devices and costs to accelerate the meter deployment schedule, among other things, will exceed the forecasted amount for the HAN retrofit that was contained in PG&E's testimony. That is, while the number of meters requiring a HAN retrofit has decreased, the revised deployment plan that reflects that reduction will actually cost more than the originally forecasted HAN retrofit.
At this point, we do not feel it is necessary to reopen the record for the taking of additional evidence. While there may be an indication that costs are being incurred in a different manner than anticipated in the process of deciding this matter, that indication in itself is not sufficient reason to reopen the record for this proceeding. For a project of this magnitude, we do not expect that any amount of evidence record will result in a forecast of costs that will be replicated by what is actually spent on a detailed cost category basis. As mentioned previously, the manner in which the final deployment of meters evolves will reflect how PG&E is able to manage the effects of changed circumstances. Also, when looked at in total, the Attachment A information does not support a significant cost decrease as requested by DRA. It, in fact, shows overall increased costs. However, if total projects costs were to go up as indicated in Attachment A, it would be appropriate to assume that the additional costs would be covered by the risk based allowance authorized by this decision. Under these circumstances, it would not be an efficient use of Commission resources to reopen the record to consider all aspects of the information contained in Attachment A, a process that might require additional evidentiary hearing and briefs.
118 According to PG&E, in a case addressing a request to reopen a proceeding under Public Utilities Code Section 1708, the Commission explained:
"The burden of demonstrating that reopening is justified is substantial. The showing required in any given case will necessarily depend on an assessment of the financial and other costs to the parties and the ratepayers should authority be suspended and a case reopened, as well as an evaluation of the information submitted in support of the request." (Re Pacific Gas and Electric Co., 4 CPUC2d 139, 150 (1980).)
119 In certain instances, such as in GRCs, update testimony and associated evidentiary hearings are provided for.
