9. What Ratemaking Accounts Need to be Modified or Created?

In order to record the costs authorized in this decision, PG&E will need to modify the definition of pre-deployment costs currently set forth in its Advanced Metering and Demand Response Account (AMDRA) and create a comparable account for the gas side. It is reasonable to authorize PG&E to make modifications to the language of its AMDRA account to provide for recording of the costs authorized today. In addition, it is reasonable to create a Gas Advanced Metering Account (GAMA). PG&E shall file an Advice Letter with the Energy Division within 5 days of the effective date of this decision that updates its AMDRA tariff sheets consistent with the limitations on costs described in this decision, and establishes a GAMA consistent with the limitations on costs described herein. Because we have reviewed these categories of costs in this application and found them reasonable, subsequent review of these costs should be limited to verification that the costs recorded are consistent with the limitations set forth in this decision.

PG&E proposes that the costs recorded in AMDRA and GAMA be verified quarterly, upon PG&E filing an Advice Letter, and that the verified recorded balances be transferred to the Distribution Revenue Adjustment Mechanism (DRAM) and the Core Fixed Cost Account (CFCA) for recovery. Verified costs transferred to the DRAM would then be recovered in distribution rates in PG&E's Annual Electric True-Up proceeding in the same manner as other distribution revenues. Recorded costs transferred to the CFCA would then be recovered from ratepayers in PG&E's next gas transportation rate change. PG&E would allocate recorded costs only to core gas customers.

SSJID suggests that the Commission should state that future departing load should not be responsible to pay any costs associated with AMI pre-deployment activities. PG&E argues that "it is speculative, at best, to assume that certain customers in PG&E's service territory will leave PG&E's service. ... There is no basis in the record to exempt certain PG&E customers from cost responsibility ..." (PG&E Reply Brief, p. 11.) Because we cannot speculate as to when or if current PG&E customers will leave the system, we find it impractical to establish any exemption of customers from cost responsibility. We find PG&E's proposed approach of recovering approved AMI pre-deployment costs through electric distribution rates and gas transportation rates to be reasonable. To the extent that the Commission does not adopt an alternative ratemaking approach to recovering the 2006 revenue requirements associated with the AMI pre-deployment activities authorized in today's decision, the quarterly Advice Letter process described herein should continue.

In Resolution E-3937, the Commission authorized PG&E to record certain types of costs in gas and electric Advanced Metering Infrastructure Memorandum Accounts (AMIMA) while this application was pending. PG&E may transfer any recorded costs that are consistent with the activities and dollars authorized in this decision from the AMIMA accounts to its AMDRA and GAMA. PG&E should file an Advice Letter to effect the transfer. PG&E may continue to utilize the existing AMIMA accounts approved by Resolution E-3937 to record the costs of activities described in those accounts that do not receive pre-approved ratepayer funding in this decision.