12. Assignment of Proceeding
Michael R. Peevey is the Assigned Commissioner and Michelle Cooke is the assigned ALJ in this proceeding.
Findings of Fact
1. The AMI system selected is sufficiently flexible to accommodate different approaches to rate design and informational tools.
2. PG&E's proposed AMI Project will meet the minimum functionality criteria established by Commissioner Peevey.
3. PG&E's pre-deployment activities do not consist of a significant amount of testing that the AMI system selected physically works or meets minimum functionality criteria.
4. The activities PG&E has defined as pre-deployment consist of preparing its existing legacy systems to accept data from its proposed AMI system, establishing and testing processes for meter and communication system installation and billing.
5. Finding PG&E's proposed pre-deployment costs reasonable requires the Commission to assume that AMI deployment will occur, resulting in prejudgment of the deployment application.
6. PG&E identifies only one component of its proposed pre-deployment activities that it would pursue, independent of the decision to deploy AMI.
7. There has been no record developed through the evidentiary process to test, rebut, or verify PG&E's AMI business case assumptions or results.
8. The fact that we do not pre-approve ratepayer cost recovery for certain activities does not foreclose PG&E from pursuing these activities.
9. PG&E already has authorization to record costs associated with all of its defined pre-deployment activities in a memorandum account, which preserves its ability to seek future cost recovery.
10. The CorDaptix upgrade and meter and network elements for testing are estimated to cost $7.0 million.
11. The authorized pre-deployment funding translates to an expected 2005 revenue requirement of no more than $3.83 million for electric and no more than $3.17 million for gas.
12. PG&E will not install AMI test meters or network elements in Yolo County during the pre-deployment phase.
13. PG&E's proposed deployment plan and schedule is the subject of
A.06-05-028.
Conclusions of Law
1. Because ORA made reasonable efforts to serve its brief as promptly as possible, its motion to accept its late-filed brief should be granted.
2. The finding that PG&E's proposed AMI Project meets the minimum functionality criteria does not establish that the system selected by PG&E is the correct or best system, or provides the best value for ratepayers. These are issues to be decided in A.05-06-028.
3. The fact that TURN and ORA chose not to evaluate the cost-effectiveness of PG&E's proposed expenditures does not preclude the Commission from independently assessing the expenditures that PG&E has proposed for reasonableness.
4. There is no legal impediment to authorizing pre-deployment activities.
5. The investments that PG&E has identified as pre-deployment activities are activities that, for the most part, provide limited value to ratepayers if the Commission ultimately decides AMI should not be funded by ratepayers because these are activities that would be necessitated only if PG&E deploys a new metering and communication infrastructure.
6. It would be unreasonable for the Commission to commit ratepayer funding to the broader set of activities that PG&E has defined as pre-deployment without having a record on the full project.
7. It is only reasonable at this time to authorize ratepayer funding for a narrow set of activities that provide value to ratepayers regardless of whether the Commission ultimately decides that ratepayers should fund the AMI Project and activities designed to test minimum meter functionality given past direction to explore the cost-effectiveness of installing AMI.
8. 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.
9. It is reasonable to authorize PG&E to modify its AMDRA account to provide for recording of costs authorized today and to create a GAMA.
10. Subsequent review of the costs recorded in AMDRA and GAMA should be limited to verification that the costs recorded are consistent with the limitations set forth in this decision.
11. Costs recorded in AMDRA and GAMA should be verified quarterly, upon PG&E filing an Advice Letter, and the verified balances transferred to the DRAM and CFCA for recovery in the Annual Electric True-Up proceeding and gas transportation rate change proceedings, respectively.
12. PG&E's proposed approach of recovering authorized AMI pre-deployment costs through electric distribution rates and gas transportation rates is reasonable.
13. PG&E should not install AMI test meters or network elements in Yolo County during the pre-deployment phase.
ORDER
IT IS ORDERED that:
1. Exhibits 5A and 302 are received into evidence as of August 1, 2005.
2. The motion of the Office of Ratepayer Advocates to accept its late-filed brief is granted.
3. Pacific Gas and Electric Company (PG&E) is authorized to spend ratepayer funding on activities that provide value to ratepayers regardless of whether the Commission ultimately decides that ratepayers should fund the AMI Project and activities designed to test minimum meter functionality given past direction to explore the cost-effectiveness of installing AMI, specifically its identified CorDaptix upgrade and meter and network elements for testing activities.
4. PG&E shall file an Advice Letter within 5 days of the effective date of this decision to update its Advanced Metering and Demand Response Account (AMDRA) tariff sheets and to establish a Gas Advanced Metering Account (GAMA) consistent with the limitations on activities described in this decision.
5. PG&E may record up to $4.0 million in pre-deployment expenses and $3.0 million in pre-deployment capital additions in its AMDRA and GAMA for activities consistent with those approved in this decision.
6. Subsequent review of the costs recorded in AMDRA and GAMA shall be limited to quarterly verification, upon PG&E filing an Advice Letter, that the costs recorded are consistent with the limitations set forth in this decision and the verified balances transferred to the Distribution Revenue Adjustment Mechanism and Core Fixed Cost Account for recovery in the Annual Electric True-Up proceeding and gas transportation rate change proceedings, respectively.
7. PG&E may file an Advice Letter to transfer any recorded costs that are consistent with the activities and funding level authorized in this decision from its Advanced Metering Infrastructure Memorandum Accounts (AMIMA) to its AMDRA and GAMA.
8. PG&E may continue to utilize the existing AMIMA accounts approved by Resolution E-3937 to record costs of activities described in those accounts that did not receive pre-approved ratepayer funding in this decision.
9. PG&E shall not install AMI test meters or network elements in Yolo County during the pre-deployment phase.
10. Application 05-03-016 is closed.
This order is effective today.
Dated , at San Francisco, California.
Appendix A
List of Appearances
SCOTT H. DEBROFF SCOTT H. DEBROFF
ATTORNEY AT LAW ATTORNEY AT LAW
LEBOEUF, LAMB, GREENE & MACRAE, LLP LEBOEUF, LAMB, GREENE & MACRAE, LLP
200 NORTH THIRD STREET, SUITE 300 200 NORTH THIRD STREET, SUITE 300
HARRISBURG, PA 17108-2105 HARRISBURG, PA 17108-2105
KELLY M. MORTON MARC D. JOSEPH
ATTORNEY AT LAW ATTORNEY AT LAW
SEMPRA ENERGY ADAMS, BROADWELL, JOSEPH & CARDOZO
101 ASH STREET, HQ13D 601 GATEWAY BLVD., STE. 1000
SAN DIEGO, CA 92101-3017 SOUTH SAN FRANCISCO, CA 94080
NINA SUETAKE KAREN P PAULL
ATTORNEY AT LAW CALIF PUBLIC UTILITIES COMMISSION
THE UTILITY REFORM NETWORK LEGAL DIVISION
711 VAN NESS AVE., STE 350 ROOM 4300
SAN FRANCISCO, CA 94102 505 VAN NESS AVENUE
SAN FRANCISCO, CA 94102-3214
EDWARD W. O'NEILL J. MICHAEL REIDENBACH
ATTORNEY AT LAW ATTORNEY AT LAW
DAVIS WRIGHT TREMAINE LLP PACIFIC GAS AND ELECTRIC COMPANY
ONE EMBARCADERO CENTER, SUITE 600 PO BOX 7442, MAIL CODE B30A
SAN FRANCISCO, CA 94111 SAN FRANCISCO, CA 94120
WILLIAM B. MARCUS
JBS ENERGY, INC.
311 D STREET, SUITE A
WEST SACRAMENTO, CA 95605
(END OF APPENDIX A)
