X. Assignment of Proceeding
Susan P. Kennedy is the Assigned Commissioner and Douglas Long is the assigned ALJ in this proceeding.
1. The scope of this proceeding was described in Scoping Memo and Ruling of Assigned Commissioner and Administrative Law Judge, issued on June 24, 1999. That ruling included within the scope of this proceeding whether the costs for which PG&E seeks recovery were reasonably incurred.
2. Section 368(e) provides PG&E incremental revenues for enhanced safety and reliability, not enhanced spending authority.
3. PG&E, although it had ample opportunity to comply with the Scoping Memo and Ruling, chose to not make an affirmative reasonableness showing, but rather, to continue to argue whether such a showing is required.
4. Expenditures that were adequately challenged by other parties are unreasonable in the face of no adequate demonstration by PG&E that the challenged expenditures enhance or improve transmission and distribution system safety and reliability.
5. PG&E admits that it did not determine whether the reclassified A&G amounts recorded in the sub accounts were incremental to the A&G amounts authorized in the 1996 GRC. Under PG&E's A&G reclassification approach, it could recover more A&G costs than actually incurred.
6. PG&E described the challenged advertising expenditures, distinguishing them from Account 909 expenditures, but did not demonstrate that the expenditures enhanced transmission and distribution system safety.
7. While improved outage analysis is possible with AMR, the meters that are part of the AMR program at issue here do not provide such information to PG&E. PG&E has failed to demonstrate that the $499,295 in AMR expenditures it recorded in Account 597 enhanced transmission and distribution system safety and reliability.
8. PG&E acknowledges that the revenues authorized in a GRC do not include the costs and expenses associated with declared disasters. It therefore acknowledges that its CEMA expenditures cannot meet the § 368(e) "incremental" criteria.
9. Straight-time labor costs are included in the 1996 GRC adopted amounts for the subject accounts. PG&E has not demonstrated that these costs enhance system safety and reliability by improving the availability of personnel necessary to respond during storms and other emergencies.
10. It is appropriate to unbundle common plant costs to the extent reasonably feasible to ensure cost recovery of those portions of the common plant costs allocated or assigned to functions that enhance system safety and reliability, consistent with the intent of § 368(e).
11. PG&E's argument that double-counting would occur were the Commission to adopt TURN's common plant unbundling recommendation is not explained and relies on factual assertions that were not made on the record and are not subject to judicial notice or extra-record citation. PG&E did not rebut the testimony TURN submitted, and it waived the opportunity to cross-examine TURN's witness, so there is no underlying record to justify PG&E's "double-counting" argument.
12. It was not demonstrated that the expenses in question, to provide clerical support to the operations, maintenance and construction personnel, are directly providing enhancing safe and reliable system over existing authorized funding.
13. All of the challenged electric industry restructuring activities and the associated costs are implementation costs specific to development and implementation of the ISO.
14. Other parties believed PG&E had identified all restructuring implementation costs in its § 376 application, and the settlement struck in that proceeding among those parties was, at least in part, predicated on that assumption.
15. In D.00-02-046, the Commission stated that cost sharing for the costs of testing and treating jointly owned poles is appropriate.
16. Vehicle expenditures, recorded as common plant costs, were made for the purpose of providing metering services, which are services not generally associated with transmission and distribution system safety and reliability.
17. Y2K activities, are not like tree-trimming, and do not address a potential problem or enhance transmission and distribution system safety and reliability by preventing problems from occurring.
18. ORA's recommendation for crediting unspent revenues directly complies with the statute to credit unspent revenues to subsequent base revenue requirements.
19. PG&E makes no argument in its showing to explain how crediting the distribution component of its TRA, instead of the base revenue requirement, complies with the statute.
1. The Commission, in determining whether the incremental revenues were spent on authorized activities, should consider; (1) whether the costs recorded were incremental to the costs authorized in the 1996 GRC; (2) whether the activities enhanced or improved transmission and distribution system safety and reliability; and (3) whether the costs were reasonably incurred.
2. In D.96-12-077, the Commission established a balancing account to allow the Commission to meet the requirements of § 368(e)(2), specific to disposition of excess revenues.
3. The establishment of a tracking account does not eliminate the restriction on the use of the incremental revenues to activities that "enhance" (as stated in § 368(e)) or "improve" (as stated in D.98-12-094) the safety and reliability of PG&E's transmission and distribution system.
4. The Commission should accord little weight to PG&E's rebuttal testimony used in lieu of an initial filing of adequate detail.
5. PG&E had the burden of proof in its initial filing.
6. Section 368(e) contemplates that revenues may not be used, or may be used improperly, and provides for an accounting of revenues that are not expended for the stated purpose.
7. The Commission should not adopt TURN's "time saving proxy" approach to allow recovery of revenues, as contemplated in § 368(e).
8. PG&E should remove from its 1997 recorded expenditures the $15.1 million ORA recommends for removal relating to A&G reclassification and chargebacks. PG&E should remove from its 1998 recorded expenditures the $11.9 million ORA recommends for removal relating to A&G chargebacks.
9. PG&E should not be allowed to recover advertising expenses under § 368(e).
10. PG&E should not be allowed to recover $499,295 in 1998 AMR costs as § 368(e) expenditures.
11. It is appropriate for PG&E to seek recovery of the storm-related costs at issue here in an application filed pursuant to § 454.9.
12. The Commission should remove from § 368(e) recovery $8.371 million in 1998 storm-related expenses without prejudice to PG&E including that amount in any new CEMA application it may choose to file.
13. PG&E should remove from § 368(e) recovery $4.3 million in 1997 storm-related expenses and $19.6 million in 1997 storm-related capital expenditures without prejudice to PG&E including those amounts in any new CEMA application it may choose to file.
14. PG&E's recovery of unbundled common plant capital spending should be reduced by $5.6 million in 1997 and by $13.9 million in 1998.
15. For the Commission to allow recovery of electric restructuring implementation costs unmentioned in PG&E's § 376 application now would reward PG&E for its obfuscation (whether intentional or accidental), undermine the basis for D.99-05-031, and undermine the Commission's settlement process generally. PG&E should not be allowed to recover the remaining $2.06 million from 1997 funds in contested electric industry restructuring costs under § 368(e).
16. PG&E should remove from 1998 § 368(e) recovery the $2 million identified as costs incurred for its pole test and treat program.
17. The $929,000 of common plant capital costs incurred to purchase vehicles used for metering should be excluded from recovery through 1997 § 368(e) funds.
18. The Commission cannot, on the basis of this record, find that any Y2K expenditures in this application were intended to enhance system reliability.
19. Crediting the 1999 revenue requirement with unspent § 368(e) revenues would have been in compliance with the explicit directive of § 368(e) in 1999.
20. Closing the SSREFBA is reasonable in light of the impossibility of transferring the unspent revenues to be spent on 1999 activities.
21. PG&E should close its SSERFBA and transfer the balance to its DRAM.
22. This order should be effective immediately to allow recovery without further delay.
23. Consistent with the conclusion that recovery of the storm-related expenditures should be brought before the Commission in a CEMA, or § 454.9 application, storm-related insurance proceeds should be recorded in the appropriate CEMA accounts.
24. PG&E should not be allowed to keep funds that are reimbursement of costs for the testing and treating of jointly owned poles and recover amounts for the program from ratepayers.
25. The 1996 GRC adopted revenues for tree-trimming were based on cash accounting, and it is appropriate to calculate the § 368(e) revenue requirement "increment" using spending figures that are accounted for using that same accounting method.
IT IS ORDERED that:
1. Pacific Gas and Electric Company (PG&E) shall remove from Pub. Util. Code § 368(e) recovery storm-related expenses of $4.3 million and $12.92 million recorded in 1997 and 1998, respectively, and storm-related capital expenditures of $19.6 million and $15.31 million recorded in 1997 and 1998, respectively. PG&E may include these amounts in a new Catastrophic Event Memorandum Account application.
2. PG&E shall credit the System Safety and Reliability Enhancement Fund Balancing Account (SSREFBA), before interest, for the following amounts and shall not recover from ratepayers the following contested amounts through increases in base revenues authorized pursuant to Pub. Util. Code § 368 (e):
Dollars in Millions |
||||||
1997 1998 |
` | |||||
Expenses |
Capital |
Expenses |
Capital |
Total |
||
1. Administrative and General |
15.100 |
$11.900 |
$27.000 | |||
2. Advertising |
0.450 |
0.450 | ||||
3. Automatic Meter Reading |
0.499 |
0.499 | ||||
4. Common Plant "Unbundling" |
5.600 |
13.900 |
19.500 | |||
5. Distribution & Customer |
7.010 |
6.300 |
13.310 | |||
6. Electric Industry Restructuring |
2.060 |
2.060 | ||||
7. Pole Test and Treat Costs |
2.000 |
2.000 | ||||
8. Vehicles Used for Metering |
0.930 |
0.930 | ||||
9. Year 2000 Compliance |
0.940 |
1.460 |
2.400 | |||
Expenditure Totals |
$22.110 |
$8.590 |
$22.089 |
$15.360 |
$ 68.149 | |
3. PG&E shall file an advice letter within 45 days of mailing in compliance with this decision work papers sufficient for Energy Division to determine that the SSREFBA disallowances and interest are correctly calculated.
4. PG&E shall transfer the adjusted balance of the System Safety and Reliability Account to its Distribution Revenue Adjustment Mechanism balancing account.
5. This proceeding is closed.
This order is effective today.
Dated , at San Francisco, California.
APPENDIX A
Service List
Appearance
REGINA COSTA JONATHAN BROMSON
ATTORNEY AT LAW CALIF PUBLIC UTILITIES COMMISSION
THE UTILITY REFORM NETWORK LEGAL DIVISION
711 VAN NESS AVENUE, SUITE 350 ROOM 4107
SAN FRANCISCO, CA 94102 505 VAN NESS AVENUE
SAN FRANCISCO, CA 94102-3214
CATHERINE GEORGE ANN H. KIM
ATTORNEY AT LAW ATTORNEY AT LAW
GOODIN MACBRIDE SQUERI RITCHIE & DAY LLP PACIFIC GAS AND ELECTRIC COMPANY
505 SANSOME STREET, SUITE 900 PO BOX 7442
SAN FRANCISCO, CA 94111 SAN FRANCISCO, CA 94120
GAYATRI SCHILBERG JAMES WEIL
JBS ENERGY AGLET CONSUMER ALLIANCE
311 D STREET, SUITE A PO BOX 1599
WEST SACRAMENTO, CA 95605 FORESTHILL, CA 95631
LYNN M. HAUG
ATTORNEY AT LAW
ELLISON, SCHNEIDER & HARRIS, LLP
2015 H STREET
SACRAMENTO, CA 95814
Information Only
BETH A. FOX BRUCE FOSTER
ATTORNEY AT LAW REGULATORY AFFAIRS
SOUTHERN CALIFORNIA EDISON COMPANY SOUTHERN CALIFORNIA EDISON COMPANY
2244 WALNUT GROVE AVENUE 601 VAN NESS AVENUE, STE. 2040
ROSEMEAD, CA 91770 SAN FRANCISCO, CA 94102
DIAN GRUENEICH DERK PIPPIN
GRUENEICH RESOURCE ADVOCATES CALIFORNIA ENERGY MARKETS
582 MARKET STREET, SUITE 1020 9 ROSCOE STREET
SAN FRANCISCO, CA 94104 SAN FRANCISCO, CA 94110-5921
ROBERT B. WEISENMILLER
MRW & ASSOCIATES, INC.
1999 HARRISON STREET, STE 1440
OAKLAND, CA 94612
State Service
MARIA E. STEVENS ANGELA K. MINKIN
CALIF PUBLIC UTILITIES COMMISSION CALIF PUBLIC UTILITIES COMMISSION
EXECUTIVE DIVISION DIVISION OF ADMINISTRATIVE LAW
320 WEST 4TH STREET, SUITE 500 JUDGES
LOS ANGELES, CA 90013 ROOM 5118
505 VAN NESS AVENUE
SAN FRANCISCO, CA 94102-3214
BERNARD AYANRUOH
CALIF PUBLIC UTILITIES COMMISSION
ENERGY COST OF SERVICE BRANCH
ROOM 4205
505 VAN NESS AVENUE
SAN FRANCISCO, CA 94102-3214
(END OF APPENDIX A)
