8 How Should Pre-Deployment Costs Be Collected?
Exhibit 9 provides a table summarizing PG&E's full request for ratepayer funding, which we approve, in this pre-deployment application.
Table 1: PG&E Cost Request
These cost estimates translate into the expected revenue requirements set forth in Table 2.
Table 2: PG&E Revenue Requirements
Line No. |
2005 |
2006 |
2007 | ||
1 |
Electric Revenue Requirement |
$7,570,368 |
$4,074,008 |
$4,023,963 | |
2 |
Gas Revenue Requirement |
$6,186,639 |
$2,220,664 |
$2,238,197 | |
3 |
Total Revenue Requirement |
$13,757,007 |
$6,294,672 |
$6,262,160 | |
Data from Exhibit 5A. |
Given that we find all of the activities in PG&E's request to constitute appropriate activities, we must assess whether the costs associated with the activities are reasonable. Neither TURN nor ORA presented us with independent analysis to provide us with an independent perspective on these cost estimates. We have reviewed PG&E's testimony on how the costs were developed, what they consist of, and PG&E witness testimony under cross-examination about ways that costs might be affected due to timing changes or scope changes. Based on this review, we find that PG&E's cost estimates are reasonable and appropriate to the activities we find to constitute AMI
pre-deployment activities. PG&E should be authorized to record up to $11.7 million in pre-deployment expenses and $37.4 million in pre-deployment capital additions.
PG&E has allocated costs between gas and electric ratepayers based on relative number of meters in PG&E's system, although ultimately the costs will be recorded as they are actually incurred. No party offered an alternative methodology of translating expenses and capital additions to a revenue requirement. Using PG&E's results of operation model, the authorized
pre-deployment funding translates to an expected 2005 revenue requirement of $7.6 million for electric and $6.2 million for gas.
