ALJ/TJS/tcg * DRAFT 5
8/8/2002
Agenda ID #864
Decision PROPOSED DECISION OF ALJ SULLIVAN (Mailed 7/9/02)
(revised August 6, 2002)
BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA
Application of Pacific Gas and Electric Company in the 2000/2001 Revenue Adjustment Proceeding. |
Application 01-06-003 (Filed June 1, 2001) |
Christine Costa Rosskopf, Attorney at Law, for Southern California Edison Company and Jennifer Post, Attorney at Law, for Pacific Gas and Electric Company, applicants.
SkJerven, Morrill, MacPherson, by Robert B. Gex, Attorney at Law, for BART, intervenor.
Sutherland, Asbill & Brennan, LLP, by Keith R. McCrea, for CA Manufacturers & Technology Assoc.; Morrison & Foerster, LLP, by Peter Hanschen, Attorney at Law, for Agricultural Energy Consumers Association; and Michael Peter Florio, Attorney at Law, for The Utility Reform Network, interested parties.
Jason Zeller, for Legal Division and Christopher J. Blunt, for Office of Ratepayer Advocates.
TABLE OF CONTENTS
Title Page
DECISION RESOLVING OUTSTANDING ISSUES IN PG&E'S 2000/2001 REVENUE ADJUSTMENT PROCEEDING AND VERIFYING ENTRIES IN
THE TRANSITION REVENUE ACCOUNT 2
1. Summary 2
2. Background 3
3. Procedural History 3
4. Issues in Proceeding 4
5. Reasonableness of PG&E's Special Electric Contracts 6
Background 6
PG&E: A Commission-set Methodology for Contract Assessment
Shows that a $33,166 Shareholder Credit is Warranted 9
ORA: A Shareholder Credit of $40 Million is Warranted 10
Discussion: PG&E Follows Commission-set Methodology 11
6. Other RAP Issues 17
Eliminate Balancing and Memorandum Accounts 18
PG&E's Ratemaking and Revenue Adjustments are Reasonable 20
PG&E's Sales and Billings Forecasts for 2002 are Reasonable 21
PG&E's Revenue Allocation and Rate Design are Reasonable 22
PG&E's Schedule PX Price Calculations are Reasonable 24
Amounts in Electric Vehicle Balancing Account are Reasonable 24
Entries to the Schedule E-BID Memorandum Account and Power Exchange Block Forward Market Memorandum Account 25
E-BIDMA Balances are Reasonable 25
PX BFMMA Costs are Reasonable 26
PG&E's Entries to the TRA During the Record Period July 1, 1999
through April 30, 2001 are Reasonable 27
7. Comments on Proposed Decision 30
Findings of Fact 31
Conclusions of Law 35
ORDER 35
DECISION RESOLVING OUTSTANDING ISSUES IN
PG&E'S 2000/2001 REVENUE ADJUSTMENT PROCEEDING
AND VERIFYING ENTRIES IN THE
TRANSITION REVENUE ACCOUNT
1. Summary
This Revenue Adjustment Proceeding (RAP) decision determines that Pacific Gas and Electric Company (PG&E) followed Commission directives in Decision (D.) 90-12-128 and D.97-03-017 to assess the reasonableness of its special contracts and rate design window contracts. These calculations determine that during the period under our review - July 1, 1999 through April 30, 2001 - two contracts fell $33,166 short of covering the Commission-adopted marginal costs. In making this determination, we reject the Office of Ratepayer Advocates' (ORA) argument that we should change the marginal cost methodology and disallow approximately $40.2 million in contract costs. The decision notes that adopting a new marginal cost methodology is beyond the scope of this proceeding. We also find that PG&E's contracts offered discounts below tariff rates of only $1.7 million, far below the requested $40.2 disallowance.
We also take a series of actions concerning undisputed matters that constitute the heart of a RAP proceeding. We verify all undisputed entries into the Transition Revenue Account (TRA) for the period from July 1, 1999 through April 30, 2001, including over $14.6 billion in power purchases. We eliminate one balancing and 11 memorandum accounts as unneeded. We authorize undisputed ratemaking, revenue allocation and rate design proposals that are not controversial and have no impact on PG&E's consumers at this time. We verify PG&E's undisputed calculation of the PX price, which is used both to inform customers and to determine CTC balances. We also verify the undisputed amounts in specific balancing accounts subject to our review in this proceeding: the Electric Vehicle Balancing Account (EVBA), the E-BID Memorandum Account (E-BIDMA), and the Power Exchange Block Forward Market Memorandum Account (PX BFMMA).
