8. What Amount of AMI Pre-Deployment Costs Should be Authorized?
Exhibit 9 provides a table summarizing PG&E's full request for ratepayer funding for this pre-deployment application.
Table 1: PG&E Cost Request
These cost estimates translate into the expected revenue requirements set forth in Table 2.
Table 2: PG&E Revenue Requirements
Line No. |
2005 |
2006 |
2007 | ||
1 |
Electric Revenue Requirement |
$7,570,368 |
$4,074,008 |
$4,023,963 | |
2 |
Gas Revenue Requirement |
$6,186,639 |
$2,220,664 |
$2,238,197 | |
3 |
Total Revenue Requirement |
$13,757,007 |
$6,294,672 |
$6,262,160 | |
Data from Exhibit 5A. |
Given the reduced scope of ratepayer funding that we should authorize, as described above, the Commission should authorize ratepayer funding of $4.0 million for CorDaptix upgrade activities (Exhibit 4, Table A-1, line 15) and $3.0 million for meters and network equipment for testing (Exhibit 4, Table A-1, sum of lines 16 and 17). These activities are estimated to cost a total of $7.0 million, with the CorDaptix upgrades costs treated as an expense and the meters and network elements treated as capital. PG&E should be authorized to record up to $4.0 million in pre-deployment expenses and $3.0 million in pre-deployment capital additions. PG&E has allocated costs between gas and electric ratepayers based on relative number of meters in PG&E's system, although ultimately the costs will be recorded as they are actually incurred. This estimation method results in $3.83 million estimated expenditures for electric and $3.17 for gas.
No party offered an alternative methodology of translating expenses and capital additions to a revenue requirement. PG&E should file, as part of its comments on the proposed decision, the expected 2005 revenue requirement for these activities using its results of operation model, so that we may establish expected revenue requirement for the authorized pre-deployment funding adopted today.
