III. Responses to Edison's Petition

The Office of Ratepayer Advocates (ORA), The Utility Reform Network (TURN) and San Diego Gas & Electric Company (SDG&E) filed responses to Edison's petition.

A. ORA

ORA supports Edison's proposed modifications with certain caveats and for reasons independent of the MOU. ORA supports a return to cost-of-service ratemaking for SONGS 2&3 as an appropriate step to implement AB1X-6, and Commission policy articulated in D.01-03-081 that the utilities will only be permitted to recover their actual costs of owning and operating plants. However, ORA argues that the Commission should develop its future ratemaking policies regarding utility retained generation in a comprehensive manner, considering the ratemaking for SONGS 2&3 in conjunction with that for Palo Verde, Edison's hydro facilities and Edison's coal plants. ORA recommends Edison's next general rate case may be an appropriate forum to do this.

ORA also points out that Edison's petition proposes cost-of-service ratemaking effective until the end of 2010, but recommends that the Commission articulate that it is not addressing ratemaking after 2010. Finally, ORA urges the Commission to recognize that any cost-of-service regulation will need to include reasonableness reviews, and that Edison has not included such a provision in its petition.

B. TURN

While TURN generally supports the relief Edison seeks in the petition for its ownership share of SONGS 2&3, TURN opposes the petition because it is a piecemeal approach to broader issues. TURN believes that the subject of returning utility-owned generation assets to cost-of-service ratemaking warrants a comprehensive review of the assets presently owned by all three major electric utilities. Even if a SONGS-specific review were appropriate, TURN believes it should include the treatment of costs incurred in 2001 through 2003.

However, if the Commission grants the petition, TURN urges that it do so only if it states that this modification is based on the independent merit of Edison's request, and not as a result of the MOU.

C. SDG&E

SDG&E states that it is a 20% owner of SONGS 2&3 and a signatory to the joint proposal the Commission adopted in D.96-04-059. SDG&E does not oppose Edison's petition provided that the modifications only apply to Edison. SDG&E argues that it has performed its regulatory bargain under the SONGS 2&3 joint proposal and to take away its entitlement to half of the potential future SONGS profits without just compensation would violate the Fifth and Fourteenth Amendments to the United States Constitution.