II. Background
This Commission has previously established allocations for the DWR revenue requirement for 2001-2002 (see, D.02-02-052), and for 2003 (see, D.02-12-045). For 2004, on an interim basis, we have continued to use the 2003 allocation methodology. (D.04-01-028, as modified by D.04-02-028.) In this proceeding, we are adopting an allocation methodology applicable to 2004, but also applicable for the remaining terms of the DWR power purchase contracts.
On September 19, 2003, DWR submitted its original Determination of Revenue Requirements for 2004 to the Commission. Based upon this revenue requirement determination, the parties litigated the methodology to be used for the permanent allocation. Opening testimony was submitted by PG&E, SCE, SDG&E and ORA on December 17, 2003, and those parties and DWR submitted reply testimony on January 9, 2004. Evidentiary hearings were held on January 20 and 21, 2004, and opening and reply briefs were filed by the three utilities on February 10 and 18, 2004, respectively.4
Subsequent to the submission of briefs, on April 19, 2004, DWR submitted a supplemental determination, modifying its revenue requirement for 2004 and reducing the amount required from ratepayers by $245 million. 5 Pursuant to an ALJ Ruling, the parties submitted comments addressing the supplemental determination. This decision allocates the 2004 revenue requirement of DWR as modified by the supplemental determination.6
On April 22, 2004, the settling parties submitted a motion for leave to submit their proposed settlement agreement. Parties submitted comments and reply comments on the proposed settlement, along with related procedural motions. SDG&E consistently and vociferously opposed the proposed settlement, while ORA generally supported it. The assigned ALJ allowed for submission of the proposed settlement, granted SDG&E's request for evidentiary hearings, and ordered the settling parties to present witnesses for cross-examination. Evidentiary hearings on the proposed settlement were held on June 14 and 15, 2004, with parties submitting opening briefs on the proposed settlement on June 25, 2004, and reply briefs on July 2, 2004.
4 ORA submitted only an opening brief, and DWR submitted a memo concurrently with the parties' reply briefs.
5 The effective submission date of the supplemental determination was April 22, 2004. (See, DWR Letter Memorandum dated May 17, 2004.)
6 One difference between the two is that they are based on different modeling runs. The original revenue requirement determination was based on Prosym Run 43, while the supplemental determination is based on Prosym Run 45. The allocation adopted today is based on Prosym Run 45, as reflected in Appendix A.
