XIII. Ongoing DWR Operating and Portfolio Costs

A. Overview

In addition to the bond charge which covers DA cost responsibility for DWR costs through September 20, 2001, we must provide a DA CRS component for the ongoing costs that DWR has already incurred and will continue to incur subsequent to September 20, 2001. The DA CRS component to cover DWR costs subsequent to DA suspension on September 20, 2001 can be logically divided into two categories. First, a separate CRS component must be computed to cover the appropriate DA share of DWR power purchase costs for the period from September 21, 2001 through December 31, 2002. Second, another CRS component must be determined for the DA share of the prospective DWR annual costs that will be incurred beginning January 1, 2003. We must also adopt to provide for subsequent updating of costs applicable to the CRS for 2004, and annually thereafter.

The CRS component for DWR costs covering September 21, 2001 through December 31, 2002 represents the period subsequent to DA suspension but prior to institution of CRS pursuant to the instant proceeding. During this period, DWR has been collecting its revenue requirement entirely through bundled ratepayer proceeds based on power charges that were implemented in D. 02-02-052. DA customers have not been charged anything to date to cover their share of the historic costs incurred by DWR during this period. Accordingly, a separate charge must be determined to assess the requisite share of costs on DA customers covering their responsibility for this period. Because DA customers' share of costs for this historic period have already been billed and collected from bundled customers and remitted to DWR, the charges to be assessed and collected from DA customers covering this period should be credited to bundled customers as a reduction in their bills representing a rebate for amounts they have already paid. In order to achieve bundled ratepayer indifference, the charges to be collected from DA customers should be allocated among the three IOU service territories in which the DA customers reside based upon the same DWR allocation percentages that were previously adopted for this period in D.02-02-052, as modified by D.02-03-062. Likewise, the DA charges so collected should be credited to bundled ratepayers of each utility based on the same allocation percentages. The amounts credited to bundled ratepayers should also include an interest component to recognize the time value of money covering the period from September 21, 2001 until the requisite offsetting funds are collected from DA customers and credited to bundled customers.

Because the DWR costs and operations for the September 21, 2001 through December 31, 2002 period are by now essentially a matter of history, it is not necessary to deliberate over parties' various disputes over modeling forecasts of resource assumptions to compute the applicable DA cost responsibility for this period. Recorded data reflecting actual DWR operations from September 21, 2001 through December 31, 2002 can be used to calculate the applicable share of DA cost responsibility for this period. These recorded data items should be available in the DWR 2003 Revenue Requirement proceeding.

In addition to determination of the historic charge for the period between September 21, 2001 and December 31, 2002, DA customers must also be assessed an applicable power charge representing their share of DWR costs for the 12 months beginning January 1, 2003. For this purpose, we shall direct that Navigant re-run its PROSYM model consistent with the resource assumptions underlying the DWR revenue requirement and inter-utility allocations that are being implemented in A.00-11-038. Consistent with our adoption of a total portfolio approach to calculating bundled ratepayer indifference, the Navigant model should be run consistent with the methodologies we adopt in this order, as discussed below and in conjunction with any updating of URG assumptions adopted in the Procurement OIR. (R.01-10-024.)