VIII. Assignment of Proceeding
Michael R. Peevey is the Assigned Commissioner and Janet A. Econome is the assigned ALJ in this proceeding.
1. On January 20, 2004, PG&E filed a Motion for Approval of the Rate Design Settlement. A number of parties, representing a wide spectrum of interests, have entered into this settlement, and these settling parties join in and support the motion for the settlement's approval.
2. AReM and Modesto filed comments on the Rate Design Settlement, and in their comments, neither entity requests hearings or designates a disputed issue of material fact.
3. The most recent Scoping Memo, issued on July 14, 2003, excluded rate allocation and rate design issues from the proceeding's scope. However, an August 19, 2003 ALJ ruling encouraged settlement of revenue allocation and rate design issues, and welcomed a Rule 51 settlement sponsored by the major parties filed after the hearings regarding the bankruptcy settlement agreement. Those hearings have been held and the Commission issued a decision on this issue, the PG&E Bankruptcy Decision.
4. The OII originally stated that the Commission may hold hearings. Hearings were held in earlier phases of this investigation, but have not been held on the settlement.
5. The Rate Design Settlement finally resolves certain issues that would otherwise be litigated in Phase 2 of PG&E's general rate case or other Commission proceedings, and reaches an interim resolution of other rate design and allocation issues.
6. Expeditious approval of the Rate Design Settlement will avoid the cost and delay of time-consuming litigation over allocation and rate design issues relating to the implementation of approximately $799 million in rate reductions resulting from the PG&E Bankruptcy Decision and simultaneous revenue requirement changes from other proceedings.
7. Because PG&E's rate design testimony, Chapter 11, has been stricken from the record, the record also fails to include detailed responsive or alternative testimony from other parties on rate design issues. However, it is undisputed that the settling parties, who represent a wide spectrum of utility, residential, governmental, commercial, agricultural, industrial, and small customer interests, including bundled, DA, and customer generation departing load, should have diverse litigation positions on rate design issues, and they have chosen to compromise these diverse positions in a mutually acceptable manner. Therefore, the settlement is within the range of the settling parties' various litigation positions.
8. While it is reasonable to approve a decrease in this case on an expedited basis, we are not as comfortable approving an increase in this case on such a basis.
9. Including the Regulatory Asset as an element to be collected from the DA CRS is consistent with the intent of prior Commission decisions.
10. We want as much transparency in billing format as possible, and this desire is reflected in past Commission decisions specifying components to be separately identified on a customer's bill.
11. On January 26, 2004, P&GE filed AL 2465-E. On February 4, 2004, AReM, TURN, and UCM submitted protests on the AL and DWR submitted a memorandum commenting on the AL.
1. The scope of this proceeding is modified to consider the Rate Design Settlement. The determination that hearings are necessary is changed for this phase of the proceeding.
2. The Commission reviews this contested settlement pursuant to Rule 51.1(e) of the Commission's Rules, which provides that the Commission must find a settlement reasonable in light of the whole record, consistent with the law, and in the public interest.
3. The Rate Design Settlement is reasonable, consistent with the law, and in the public interest, provided it is implemented by PG&E in its supplemental AL filing as set forth in today's decision.
4. We reject without prejudice PG&E's proposal in its advice letter to implement an increase to DA customers by virtue of this decision. Rather, we direct PG&E (a) to track the $18 million associated with this proposed increase to these customers as well as any other undercollection necessitated by the deferred increases or forecast decreases resulting from this decision in an appropriate regulatory account or accounts, and (b) to prepare billing changes resulting from this decision, the Modified Settlement Agreement and D.03-12-035, for implementation in an appropriate advice filing or filings to be made subsequent to the Commission's decision in Phase 1 of PG&E's 2003 general rate case.
5. We interpret language in Paragraph 8 of the settlement to mean that while parties cannot use the establishment of the charge imposed on the DA customers for the recovery of the Regulatory Asset as the sole basis to increase or lift the cap, the parties can use this factor in conjunction with other factors set forth in D.03-07-030 as a basis to increase or lift the cap.
6. Paragraph 5 of the settlement and today's decision do not address accruals to the BBA and CABA that may result due to the pending Final Opinion on Phase 2 Issues in R.01-05-047. The treatment of historic BBA and CABA balances also remains an open issue to resolve in a subsequent proceeding (such as Phase 2 of PG&E's general rate case).
7. AReM's proposed modification to the Rate Design Settlement concerning crediting the DA CRS undercollection with revenues from the 1-cent surcharge and residual CTC collected from DA customers by PG&E through December 2002 is denied. Modesto's proposed modifications to the Rate Design Settlement are denied.
8. Modesto's proposed modifications to the Rate Design Settlement are denied except as follows. To ensure that the settlement is consistent with Commission decisions, the tariffs for municipal departing load's cost responsibility for the Regulatory Asset should be set subject to adjustment. Municipal utilities may file a petition for modification of the instant decision concerning certain new municipal load's cost responsibility for the Regulatory Asset, once the Commission decides the pending rehearing pursuant to
D.03-08-076 on the exceptions of certain new municipal load's payment of the CRS.
9. We direct PG&E to show the specific charges for the CTC, Regulatory Asset, the DWR bond charge, and the DWR power charge separately on DA customers' bills, and the CTC, Regulatory Asset, and the DWR bond charge separately on bundled customers' bills. PG&E shall implement this directive no later than August 1, 2004.
10. To the extent that PG&E's AL implementing the settlement does not comply with existing law, PG&E is directed in its supplemental AL filing to revise the settlement's implementation in a manner consistent with existing statutes and Commission decisions.
11. PG&E shall return to customers electric revenue requirement overcollections between January 1, and March 1, 2004 through a one-time bill credit or refund no later than May 1, 2004. PG&E shall amend AL 2465-E by submitting a supplemental advice letter filing on or before March 1 to effectuate this order.
12. With respect to AReM's protest to AL 2465-E, AReM's protest on (1) reductions for DA customers is denied; (2) increases for DA customers is denied as moot; (3) bill presentation is granted insofar as PG&E shall show CTC and the Regulatory Asset charge as separate line items on bundled customers' bills (as well as the other items delineated in the Bill Format section of this decision); and (4) setting a procedural schedule for Phase 1 of the ERRA proceeding to provide for a resolution of the CTC benchmark issue is denied without prejudice as being beyond the scope of this AL.
13. PG&E shall not supplement AL 2465-E to reflect a new CTC market benchmark unless the Commission adopts a new benchmark prior to March 1, 2004 in its ERRA proceeding, A.03-08-004.
14. DWR's memorandum advocating that PG&E withdraw its proposal to reduce DWR's 2004 revenue requirements by $79 million is granted. PG&E shall amend AL 2465-E and submit revised tariffs to reflect this change, namely, increasing the DWR power charge revenue requirement by $79 million, from $1.694 billion to $1.773 billion.
15. DWR's memorandum regarding the classification of the PCBA rate component is also granted. PG&E shall revise its tariffs to clarify the function of the PCBA and that amounts collected for DWR are not PG&E's generation costs.
16. TURN's limited protest to AL 2465-E is granted. PG&E filed revised tariffs in AL 2475-E to present rates for departing load customers who are not exempt from the Regulatory Asset charge to be assessed that charge. We will consider the tariffs in that AL.
17. UCM's protest to AL 2465-E is denied without prejudice as moot. The issue UCM raises is being addressed in a petition for modification of D.03-07-029, and we will take appropriate action, as required, after we resolve the petition for modification.
18. In the interim, PG&E shall modify AL 2465-E to the extent necessary to ensure that all CARE-eligible customers do not receive any rate increases at this time. PG&E may track undercollected revenues, if any, associated with this revision in an appropriate regulatory account for disposition pending the outcome of our decision on Visalia's petition for modification of D.03-07-029. PG&E shall also modify AL 2465-E to correct the CARE rate it has discovered is in error.
19. Because we have consolidated our decision on the Rate Design Settlement with AL 2465-E, and PG&E was directed to serve its AL on the service list for this proceeding, as well as for A.02-11-017 et al. and R.02-01-011, this decision will be served on the service list of this proceeding, as well as on the service lists for A.02-11-017 et al. and R.02-01-011.
20. CMUA's motion to intervene to file comments to the draft decision should be granted.
21. This decision should be effective immediately in order that PG&E customers receive a rate decrease as soon as possible.
IT IS ORDERED that:
1. The Settlement Agreement with Respect to Allocation and Rate Design Issues Associated with the Decrease in 2004 Revenue Requirement Arising from Approval of the Modified Settlement Agreement in Commission
Decision 03-12-035 (Rate Design Settlement), filed on January 20, 2004, together with a motion for its approval and attached as Attachment A hereto, is approved, provided Pacific Gas and Electric Company (PG&E) implements the Rate Design Settlement in its supplemental advice letter filing as set forth in today's decision.
2. No later than March 1, 2004, PG&E shall amend Advice Letter 2465-E with a supplemental advice letter to conform with the requirements of the discussion, findings and the conclusions of this decision. The advice letter, as supplemented, shall be effective on March 1, 2004 subject to the Commission's Energy Division determining that it is in compliance with this decision. In addition, subject to the Energy Division's review, PG&E may revise Advice Letter 2510-G/2460-E, filed December 31, 2003, to support the ratemaking mechanisms necessitated by this decision to ensure overcollections and undercollections in PG&E's authorized 2004 revenue requirements are "trued up" in future rates, and to provide clarifying language, consistent with this decision.
3. The California Municipal Utilities Association's motion to intervene to file comments to the draft decision is granted.
4. This decision will be served on the service list of this proceeding, as well as on the service lists for Application 02-11-017 et al. and Rulemaking 02-01-011.
This order is effective today.
Dated , at San Francisco, California.
Appendix 1
