COM/GFB/ccv Agenda ID # 3906
Alternate to Agenda ID #3899
Item 26c Ratesetting
Decision REVISED ALTERNATE PROPOSED DECISION OF COMMISSIONER BROWN (E-Mailed 9/23/04)
BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA
Application of Southern California Edison Company (E 338-E) for Authority to Institute a Rate Stabilization Plan with a Rate Increase and End of Rate Freeze Tariffs. |
Application 00-11-038 (Filed November 16, 2000) |
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Emergency Application of Pacific Gas and Electric Company to Adopt a Rate Stabilization Plan. (U 39 E) |
Application 00-11-056 (Filed November 22, 2000) |
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Petition of THE UTILITY REFORM NETWORK for Modification of Resolution E-3527. |
Application 00-10-028 (Filed October 17, 2000) |
OPINION IMPLEMENTING A PERMANENT ALLOCATION
OF THE ANNUAL REVENUE REQUIREMENT DETERMINATION
OF THE CALIFORNIA DEPARTMENT OF WATER RESOURCES
I. Summary
This decision adopts a permanent cost allocation methodology that will be applied to the revenue requirement of the California Department of Water Resources (DWR) for its power purchases in 2004 and subsequent years.1
The permanent methodology we adopt is a compromise between the proposals litigated by the parties. We do not adopt the proposed settlement agreement between PG&E, SCE and TURN.2 Our adopted methodology assigns the total costs of the DWR contracts to the utility to which they were physically allocated in D.02-09-053, but adjusts the resulting allocation by separately pooling and allocating the forecast annual "above-market" costs of the DWR contracts to the ratepayers of each IOU as follows: PG&E ratepayers receive 44.8% of the above-market costs, SCE ratepayers receive 45.3%, and SDG&E ratepayers receive 9.9%. These are the same allocation percentages that are used to allocate the annual DWR bond charge revenue requirement, and the same usage should be used to allocate these above-market costs. This will ensure that the above-market burden of the DWR contracts is shared equally by ratepayers in PG&E, SCE and SDG&E territories. Similarly situated customers will pay identical shares of these costs, regardless of location.3 Consistent with D.04-01-028, this methodology is applied retroactively to January 1, 2004. (D.04-01-028, p. 3.)
1 For more background on DWR's power purchase program and revenue requirement, and on the relevant statutes, see Decision (D.) 02-02-052, pp. 6-12.
2 The settlement agreement was generally supported by the Commission's Office of Ratepayer Advocates (ORA), and strongly opposed by San Diego Gas & Electric Company (SDG&E).
3 In essence, we are adopting SCE's alternative litigation proposal, but improving upon it by using fair allocation percentages that are identified in PG&E's litigation position.
