II. Background

Application (A.) 02-03-039 is the application of Southern California Edison Company (SCE) and San Diego Gas and Electric Company (SDG&E) for their 2002 NDCTP. Combined hearings were held for both the instant application and A.03-03-039, although the proceedings were not consolidated. The purpose of the combined hearings was to address issues common to both proceedings in a single set of hearings. In this way, a record was developed that allows the Commission to treat common issues consistently. Therefore, the testimony and exhibits of PG&E, SCE, SDG&E, and the Commission's Office of Ratepayer Advocates (ORA) regarding common issues are included in the record for both applications. The testimony and exhibits regarding utility specific issues are included only in the application to which they pertain.

SCE and SDG&E are not parties to this application. However, they participated in the development of the record. The Surfrider Foundation, and The Utility Reform Network are parties to this proceeding. However, they did not provide testimony or exhibits, cross-examine witnesses, or file briefs in this proceeding. Therefore, the term "parties," as used in the balance of this proceeding, refers to the active parties, PG&E and ORA. In addition, the term "participants" refers to PG&E, SCE, SDG&E, and ORA.

Trust fund contribution levels and the resulting revenue requirements are calculated using complex computer models. The models are first used to estimate the decommissioning costs in current dollars. The decommissioning costs are then escalated to the future years in which they will occur. The models then use the current trust fund balances, and estimated future earnings, to estimate the trust fund contributions necessary to pay the decommissioning costs when they occur. The models then determine the revenue requirement needed to provide the contributions. The disputed issues in this proceeding concern model inputs and assumptions as addressed below.