ALJ/XJV/tcg DRAFT Agenda ID #4863

Ratesetting

Decision DRAFT DECISION OF ALJ VIETH (Mailed 8/9/2005)

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Application of Pacific Gas and Electric Company for an Ex Parte Order Granting Limited Exemptions from the Affiliate Transaction Rules Adopted in D.97-12-088, as Subsequently Modified. (U 39 E)

Application 04-11-013 (Filed November 15, 2004)

OPINION APPROVING SETTLEMENT, WITH CONDITIONS

Summary

We approve the settlement between Pacific Gas and Electric Company (PG&E) and the Office of Ratepayer Advocates (ORA) regarding the application of certain Affiliates Transaction Rules to PG&E's affiliate, Fuelco LLC (Fuelco), after requiring two conditions in addition to the three that underlie the parties' agreement. Fuelco, jointly owned by PG&E and two other utilities, was expressly formed to assist in transactions to secure nuclear products and services, including nuclear fuel, for use at the member utilities' nuclear power generators. Under the parties' settlement, PG&E agrees to report to the Commission annually on the activities and operating costs associated with its interactions with Fuelco; to apportion to ratepayers all net nuclear fuel cost savings generated by Fuelco for PG&E; and to apportion to ratepayers PG&E's share of any net proceeds on the sale or dissolution of Fuelco. We require in addition, that upon issuance by the United States Department of Justice, PG&E shall provide the Commission with a copy of the anti-trust safe harbor ruling for Fuelco. Also, PG&E shall expand its annual report on interactions with Fuelco to include any activities undertaken outside the scope of Fuelco's general purposes, so that the Commission may monitor the full impact on ratepayers of PG&E participation in Fuelco.