March 13, 2003 Docket #: A.02-06-019

Media Contact: PUC Press Office - 415.703.1366 - news@cpuc.ca.gov

PUC DENIES PG&E REQUEST FOR BASE REVENUE INCREASE

The California Public Utilities Commission (PUC) today denied Pacific Gas and Electric Company's (PG&E) request for a base revenue increase of approximately $96 million for its electric and gas systems for 2002.

PG&E has not had a full review of its costs since its 1999 General Rate Case. The Commission determined that the recorded numbers are out of date, and the escalation rates too uncertain to sustain a finding of just and reasonableness for a 2002 base revenue increase. In the 1999 General Rate Case, the base year for recorded costs was primarily 1996.

PG&E shows a recorded rate of return of 12.99 percent for year 2001 as opposed to an authorized rate of return of 9.12 percent. In its comments on the Commission's Draft Decision, PG&E diminished the weight of that finding by stating that it consists of pro forma results. However, when a utility files for a rate increase, it is required to comply with rules that require accurate, recorded, up-to-date information.

Finally, PG&E's estimated rate of return for 2002 (approximately 8.6 percent) does not warrant the extraordinary relief of a base revenue increase.

Had PG&E made a case for a base revenue increase, rates would have been effective as of April 22, 2002, an effective date the Commission adopted in a previous decision (D.02-04-056).

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