XI. Assignment of Proceeding
Carl W. Wood is the Assigned Commissioner and Douglas Long is the assigned Administrative Law Judge in this proceeding.
1. As in any ratesetting proceeding, the Commission's primary task is to forecast reasonable revenue requirements for the test period, i.e., the amounts of revenues needed by SoCalGas and SDG&E to provide safe and reliable public utility service and earn a reasonable rate of return for 2004 under conditions of prudent management.
2. On December 19, 2003, after conclusion of evidentiary hearings, SoCalGas, ORA, TURN, UWUA, Local 483, SCGC, and Greenlining filed a joint motion for a Settlement Agreement resolving disputed issues related to SoCalGas' TY 2004 gas revenue requirement request.
3. On December 19, 2003, SDG&E, ORA, Greenlining, Coral, and CUE filed a joint motion for a Settlement Agreement resolving disputed issues related to SDG&E's forecast TY 2004 electric and gas distribution requirements.
4. On January 20, 2004, UCAN and the City of Chula Vista filed comments in opposition to the SDG&E settlement.
5. On January 30, 2004, FEA, a non-signatory, filed late-filed comments supporting the SDG&E settlement.
6. On January 20, EGA, another non-signatory, filed comments supporting the SDG&E settlement.
7. The Settlements resolve all issues with two exceptions: (1) the method of recovery of fumigation related costs and (2) the gas resource plan.
8. These applications were not filed in conformance with the rate case processing plan; they were filed in compliance with D.97-12-041 (77 CPUC 2d, 139) that allowed SoCalGas and SDG&E to file a "cost of service" application.
9. In the settlements, the parties agree that SoCalGas and SDG&E will file a NOI as a part of the next cost of service or GRC application, in a manner and on a schedule consistent with the provisions of the rate case plan adopted in D.89-01-040.
10. ORA, TURN and UCAN did not have an opportunity under the process for these applications to review a NOI of the applications for deficiencies.
11. The conventional rate case processing plan would have provided ORA an opportunity to review the applications for deficiencies and expedite litigation.
12. TURN and UCAN performed significant analysis in these proceedings and their effectiveness would benefit from participating in an NOI process for the next general rate case.
13. TURN and ORA actively litigated the majority of the SoCalGas 2004 Test Year issues and the major portion of the costs recoverable in the revenue requirement.
14. Greenlining, SCGC, UWUA and Local 483 did not actively litigate the majority of the SoCalGas Test Year 2004 issues or the major portion of the costs.
15. UCAN and ORA actively litigated the majority of the SDG&E 2004 Test Year issues and the major portion of the costs recoverable in the revenue requirement.
16. Greenlining, CUE, City of Chula Vista and Coral did not actively litigate the majority of the SDG&E Test Year 2004 issues or the major portion of the costs.
17. Greenlining, SCGC, UWUA, CUE, and Coral did not file opening or reply litigation briefs.
18. The Joint Comparison Exhibits, Ex. 149 and Ex. 150, for both SoCalGas and SDG&E, respectively, adequately summarize the end-of-litigation agreements on estimates between the applicants and the intervenors.
19. The turn-off/turn-on of gas service prior to home fumigation is safety-related as defined in § 328(b).
20. Resolution G-3344, allowed SoCalGas and SDG&E to temporarily apply Z-Factor treatment to recover the cost of fumigation turn-off/turn-on of service.
21. Customers will not decide to fumigate a house simply because there is no separate turn-off/turn-on charge. A separate fee to fumigators or customers could provide an inappropriate incentive for them to perform the turn-off/ turn-on service themselves.
22. There is no fair basis to impose a one-way balancing account for fumigation related work orders to shut-off and restart service.
23. The applicants' forecasts regarding the costs associated with fumigation are reasonable.
24. SDG&E owns 20% minority-interest of the San Onofre Nuclear Generating Station (SONGS) along with two other minority-interest owners, the City of Anaheim and the City of Riverside.
25. Southern California Edison is the majority-owner and the operating agent of SONGS.
26. The O&M and capital expenditures associated with SONGS was litigated in the SCE GRC proceeding A.02-05-004
27. The Commission identified the reasonable SONGS 2004 capital expenditures and O&M expenses for SDG&E in D.04-07-022.
28. The new Nuclear Regulatory Commission requirements are not a known charge that can be updated within the meaning of D.89-01-040.
29. SDG&E's recovery of SONGS incremental revenue requirements for TY 2004 beyond the scope of capital expenditures in A.02-05-004 is reasonable, subject to refund and a clear and complete showing by SDG&E.
30. SDG&E's recovery of SONGS 2005 O&M costs is beyond the test year for this proceeding.
31. The Otay Mesa Pressure Betterment Project 2466 would modify SDG&E's gas transmission system to allow multi-directional flow through the Otay Mesa Metering Station.
32. The project interconnects SDG&E with an unregulated foreign Sempra affiliate, Transportadora de Gas Natural de Baja California.
33. SDG&E does not have a contract with a gas supplier and does not have approvals from both the Federal Energy Regulatory Commission and the U.S. Department of Energy for gas to flow northward.
34. D.04-09-022 authorized SoCalGas and SDG&E to establish receipt points, as needed, at Otay Mesa, Salt Works Station, Center Road Station, or at other receipt points that may be needed to access regasified LNG.
35. D.04-09-022 allows LNG suppliers to make application to the Commission to roll costs of system enhancements required for LNG transportation into rate base after the project is complete.
36. The Otay Mesa Pressure Betterment Project is not providing service at this time, it is not used and useful, and should not be in the 2004 rate base.
37. Vegetation management is a major expense, subject to significant potential crises: fire, flood, pests and drought.
38. The primary objectives of the Sustainable Communities Project include ensuring environmentally sensitive energy solutions, stimulating the distributed generation industry, supporting and partnering with interested developers, and promoting energy and demand savings.
39. With respect to gas system planning for both companies, the supplemental testimony was insufficient as a part of adopting the projected test year capital expenditures and the operating expenses to support planning and oversight of the gas systems.
40. The Greenlining Settlements with SoCalGas and SDG&E make four commitments on workforce diversity, supplier diversity, philanthropy and annual meetings.
41. Although the Commission supports the goal of workforce diversity, the Commission has no jurisdiction over work force diversity within SoCalGas and SDG&E.
42. The Commission's policy does not allow funding for philanthropic contributions in regulated utility rates.
43. Corporate philanthropy is not a cost recoverable in retail rates.
44. The Side Settlement Agreement between Greenling and SoCalGas and SDG&E does not ask the Commission to link executive compensation with philanthropy.
45. The Commission reviews the SoCalGas and SDG&E Settlements pursuant to Rule 51.1(e) of the Commission's Rules of Practice and Procedure, which provides that the Commission must find a settlement reasonable in light of the whole record, consistent with the law, and in the public interest.
46. The Settlements represent a compromise of the strongly-held views of the sponsoring parties.
47. The Settling Parties fairly reflect the affected interests in this proceeding.
48. No term of the Settlements contravenes statutory provisions or prior Commission decisions.
49. The record supports the Settling Parties agreements.
50. With the exception of two modifications, the Settlements are fair, just and in the public interest.
1. The SoCalGas Settlement is in the public interest, consistent with the law, and should be approved.
2. The SDG&E Settlement is in the public interest, consistent with the law, and should be approved with two modifications.
3. The Otay Mesa Pressure Betterment Project should be removed as part of the capital additions for SDG&E.
4. The SDG&E's portion of the SONGS revenue should be adjusted to reflect the amount adopted in D.04-07-022 in SCE's GRC, the proceeding in which the SONGS issue was litigated.
5. It is reasonable for SDG&E to maintain its one-way balancing account for tree trimming vegetation management costs.
6. SDG&E should pursue the refinement of its Sustainable Communities Project and to present future proposals in greater detail - the projects that will be pursued, detailed criteria that the company would consistently apply in choosing and serving projects - in future cost of service or general rate case proceedings.
7. The legal obligation of the Commission is to establish just and reasonable rates to enable SoCalGas and SDG&E to provide safe and reliable service for the convenience of the public, ratepayers, and employees, while earning for shareholders a fair return on the property the companies employ in providing service.
8. A.02-12-024 and A.02-12-028 are not subject to the rate case processing plan, D.89-01-040.
9. It is reasonable to require SoCalGas and SDG&E to file NOIs of their next rate applications and to file in conformance with the Commission's rate case processing plan.
10. It is reasonable to allow TURN and UCAN, in addition to ORA, to review the NOIs and provide SoCalGas and SDG&E with deficiencies in the applications.
11. We have no basis upon which to address the level of SoCalGas' and SDG&E's philanthropic contributions.
12. The Side Settlement Agreement between Greenlining and SoCalGas and SDG&E should be commended and endorsed.
IT IS ORDERED that:
1. Application (A.) 02-12-027 is granted to the extent set forth in this order. Southern California Gas Company (SoCalGas) is authorized to collect, through rates and through authorized ratemaking accounting mechanisms, the 2004 Test Year Base Margin set forth in Appendix F.
2. A.02-12-028 is granted to the extent set forth in this order. San Diego Gas & Electric Company (SDG&E) is authorized to collect, through rates and through authorized ratemaking accounting mechanisms, the 2004 Test Year Base Margin for Natural Gas Service as set forth in Appendix D.
3. A.02-12-028 is granted to the extent set forth in this order. SDG&E is authorized to collect, through rates and through authorized ratemaking accounting mechanisms, the 2004 Test Year Base Margin for Electric Service as set forth in Appendix E.
4. Within 40 days of the effective date of this order, SoCalGas and SDG&E shall file revised tariff sheets to implement the electric and gas revenue requirements set forth in Appendices D, E and F. Tariffs shall become effective on the first day of the month following the advice letter filing.
5. SDG&E shall continue to maintain its one-way balancing account for tree trimming vegetation management costs.
6. SDG&E shall establish a balancing account, subject to refund, for new incremental security costs at the San Onofre Nuclear Generating Station (SONGS) as imposed by Nuclear Regulatory Commission and discussed in this decision.
7. SoCalGas and SDG&E shall refine and enhance the ratemaking model spreadsheets before the next rate proceeding and eliminate all instances of manual data transfers within the models and for the tables and reports generated by the models to support the results of operations, rate base and other ratemaking tools.
8. We direct the interested parties to plan, schedule and conduct workshops in the first quarter of 2005 to develop a better format for presenting Shared Services in SoCalGas and SDG&E's next base revenue ratemaking proceeding.
9. SoCalGas and SDG&E shall comply with the Commission's rate case processing plan, as modified herein, when they next file for any change in authorized base electric and gas revenue requirements.
10. Phase One of A.02-12-027 and A.02-12-028 is concluded. These consolidated proceedings and Investigation 03-03-016 remain open for Phase Two.
This order is effective today.
Dated , at San Francisco, California.
APPENDIX A
List of Appearances
The current service lists for these proceedings are available on the Commission's web site, at the following links:
1. http://www.cpuc.ca.gov/published/service_lists/A0212027_50027.htm
2. http://www.cpuc.ca.gov/published/service_lists/A0212028_50027.htm
Further assistance is available by contacting the Process Office at (415) 703-2021.
(END OF APPENDIX A)
APPENDIX B
List of Acronyms and Abbreviations
A. - Application
ACR - Assigned Commissioner's Ruling
AHE49NS - Average Hourly Earnings for workers in the Electric, Gas and Sanitary Sectors of the U.S. economy
ALJ - Administrative Law Judge
BCAP - Biennial Cost Allocation Proceeding
CAD - Computer Aided Drafting
CalTrans - California Department of Transportation
Coral - Coral Energy Resources, LP
COS - Cost of Service
CPS - Capital Project Summary
CSA - Comprehensive Settlement Agreement
CUE - California Utility Employees
D. - Decision
DOT - Department of Transportation
DRID - Defense Reform Initiated Directive
Edison - Southern California Edison Company
ERISA - Employee Retirement Income Security Act (of 1974)
FEA - Federal Executive Agency
GCSF - Gas Consumption Surcharge Fund
GEMS - Gas Energy Measurement Systems
GO - General Order
GRC - General Rate Case
Greenlining - Greenlining Institute
I. - Investigation
ICIP - Incremental Cost Incentive Proceeding
IRS - Internal Revenue Service
JCE - Joint Comparison Exhibit
JGTOTALMS - UCIS constructed Index
Local 483 - Local 483 UWUA
MPC - Margin Per Customer
NEIL - Nuclear Electric Insurance Ltd.
NGVA - Natural Gas Vehicle Account
NOI - Notice of Intent
NorthStar - NorthStar Consulting Group
NRC - Nuclear Regulatory Commission
O&M - Operating and Maintenance
OP - Ordering Paragraph
ORA - Office of Ratepayer Advocates
Otay Mesa - Otay Mesa Metering Station
PHC - Prehearing Conference
PG&E - Pacific Gas and Electric Company
PBR - Performance Based Ratemaking
R. - Rulemaking
RO - Results of Operations
Rules - Rules of Practice and Procedure
SANDAG - San Diego Association of Governments
SCGC - Southern California Generation Coalition
Sempra - Sempra Energy
SoCalGas - Southern California Gas Company
SONGS - San Onofre Nuclear Generating Station
SDG&E - San Diego Gas & Electric Company
SDG&E Settling Parties - Collectively are the following: SDG&E, ORA
Greenlining, Coral and CUE
Sustainable Community - Sustainable Community Energy Systems
TGN - Transportadora de Gas Natural
TLCBA - True Labor Cost Balancing Account
TURN - The Utility Reform Network
UCAN - Utility Consumers' Action Network
UWUA - Utility Workers Union of America
(END OF APPENDIX B)
Brown Comment Alternate Dec. Appendixes C-F
