2. Background
Much of the electricity that PG&E delivers to its retail electric customers is purchased by PG&E in the wholesale power market. Since June 2000, there has been a huge and sustained increase in the price of wholesale power that PG&E says has far exceeded the revenues that PG&E receives from its retail electric customers pursuant to the rate freeze mandated by § 368(a) and D.96-12-077.3 Under current ratemaking and accounting rules, the excess of PG&E's cost for wholesale power over its revenues is recorded as an "undercollection" in its TRA. This undercollection must be financed by PG&E.
On September 8, 2000, PG&E filed Application (A.) 00-09-020 for authority under § 816 et seq., to issue $1.4 billion of short-term debt to finance its TRA undercollection. The Commission granted the application in D.00-10-065. On October 18, 2000, PG&E filed A.00-10-029 in which PG&E requested, among other things, authority to (i) issue $2 billion of long-term debt to finance its TRA undercollection, including debt secured by a lien on PG&E's property, plant, equipment, and other assets; (ii) exclude from its authorized capital structure any long-term debt used to finance the TRA undercollection; and (iii) enter into interest-rate swaps, caps, and collars with respect to the requested long-term debt. The Commission granted these requests in D.00-12-064.4
On December 29, 2000, PG&E filed one petition to modify D.00-10-065, and another petition to modify D.00-12-064. Each petition requests authority under § 816 et seq., to issue $4 billion of additional debt to finance PG&E's TRA undercollection.5 Granting both petitions would provide PG&E with authority to issue $8 billion of additional debt, for a total of $11.4 billion of debt to finance its TRA undercollection. This decision addresses PG&E's petition to modify D.00-12-064. A companion decision issued today addresses PG&E's petition to modify D.00-10-065.
Notice of PG&E's petition to modify D.00-12-064 (Petition) appeared in the Commission's Daily Calendar on January 3, 2001. There were no responses to the Petition.
On January 22, 2001, PG&E filed an amendment to its Petition in which PG&E requests a waiver of the fee that PG&E is required to pay under § 1904(b). Alternatively, PG&E requests authority to pay the fee, on a pro rata basis, within five days of any debt issuances.6 PG&E states that its request is based on the extraordinary size of the requested debt authorization and the adverse impact that the correspondingly large fee (approximately $2 million) will have on PG&E. Notice of the amendment appeared in the Commission's Daily Calendar on January 24, 2001. Today's decision is being issued prior to parities having an opportunity to file responses to the amendment pursuant to Rule 2.6(a).7
3 70 CPUC 2d 207. 4 PG&E also requested authority in A.00-10-029 to issue $2 billion of additional long-term debt for purposes other than financing its TRA undercollection. In D.00-12-064, the Commission authorized PG&E to issue only $370 million of additional debt for these other purposes. 5 A petition to modify a Commission decision is generally not the appropriate vehicle to request authority to issue additional debt. In the future, PG&E should seek authority to issue additional debt by filing an application. 6 PG&E initially requested a waiver or deferral of the § 1904(b) fee by submitting an e-mail to assigned (ALJ) Administrative Law Kenney. ALJ Kenney directed PG&E to submit its request by filing an amendment at the Commission's Docket Office. 7 The Commission provided notice that it would be acting swiftly on PG&E's Petition when a decision on PG&E's Petition was placed on the Agenda for the Commission's meeting of January 18, 2001. The Agenda was mailed on January 8, 2001.
