6. Residential Nonrefundable Discount Percentage for New Customer Connections

On March 7, 2005, TURN moved to ensure inclusion of an issue in this proceeding. The issue is whether or not the Commission should eliminate the nonrefundable discount option for new customer connections.⁹ The motion was unopposed, and was granted. The ruling was reversed on appeal, however, since elimination of the option would change applicant's revenue requirement, and changes in revenue requirement are outside the scope here. (See Rulings dated March 15, 2005 and March 30, 2005.)

Nonetheless, PG&E is obligated to periodically review the factors used to determine the residential allowance, non-refundable discount option percentage rate, and cost-of-service factor related to line extensions. PG&E must file an advice letter if its review shows a change of more than 5% is warranted. (PG&E Electric Tariff Rule 15.I.2.¹⁰) PG&E states that it is planning to address these periodic review factors after a final decision in this proceeding.

In the March 30, 2005 Ruling, the ALJ proposed including an ordering paragraph in this decision to ensure that the issue is not lost, and a forum is presented for its consideration, even if PG&E determines that the change should be less than 5%. We need not adopt the ALJ's proposal here, however. We have already separately required PG&E to file an application to examine line extension matters. (Resolution E-3921, dated June 16, 2005.) TURN can pursue the issue there.

⁹ The issue involves line extensions and the portion of costs paid by developers (and customers) versus the utility (and ratepayers). Line extension cost recovery rules include an option where the developer may pay an amount upfront as a nonrefundable deposit based on a discount from the estimated total cost. The current discount is 50%. Applicant's experience appears to show that this option leaves a net cost for ratepayers, and TURN sought to include the issue of its elimination. We note that the percentage may change over time based on several factors included in PG&E's tariff. Alternatively, the percentage might be increased to 100% if appropriate (i.e., elimination of the discount option) based on public policy or other considerations.

¹⁰ PG&E's Electric Tariff Rule 15.I.2 states:

"PERIODIC REVIEW. PG&E will periodically review the factors it uses to determine its residential allowances, non-refundable discount option percentage rate, and Cost-of-Service Factor stated in this rule. If such review results in a change of more than five percent (5%), PG&E will submit a tariff revision proposal to the Commission for review and approval. Such proposed changes shall be submitted no sooner than six (6) months after the last revision.

"Additionally, PG&E shall submit by advice letter proposed tariff revisions, which result from other relevant Commission decisions, to the allowance formula for calculating line and service extension allowances."