The July 18, 2001 Prehearing Conference and
Submission of the Case Without Hearings
A prehearing conference (PHC) was held in this matter on July 18, 2001. After answering some questions by the assigned ALJ, Edison's counsel insisted once again that hearings were unnecessary, and that testimony by Edison personnel would add little to what was already in the application. (PHC Transcript, pp. 9, 14-15.) ORA's counsel, on the other hand, felt that testimony was necessary to demonstrate, among other things, the rate impacts of allowing TRRRMA balances to be recovered in distribution rates. (Id. at 15.) After further discussion, the parties agreed that ORA would serve direct testimony on September 7, 2001, and that based on Edison's review of this testimony, it would advise ORA and the ALJ whether it considered rebuttal testimony or a hearing to be necessary. (Id. at 23-24.)
In addition to the arguments in its protest, ORA's testimony set forth four additional reasons why Edison should not be allowed to recover the TRRRMA costs in distribution rates. First, ORA emphasized that the multi-factor allocation methodology was developed jointly by Edison and ORA in workshops, and that Edison's witnesses testified at FERC strongly in support of the multi-factor approach. Thus, ORA concluded, Edison has "a significant degree of ownership of this methodology," and should not now be heard to urge a de facto abandonment of it. (ORA Testimony, pp. 6-9.)
Second, ORA argued that Resolution E-3544 imposes a clear burden of proof on Edison before it may recover the TRRRMA balances in rates, and Edison has failed to meet that burden. Edison's counsel effectively admitted the company could not prove the amounts booked in TRRRMA are distribution-related, ORA contended, and the company had also failed to offer any proof that FERC's labor ratio allocation methodology is superior to the multi-factor approach, proof without which the CPUC should not abandon the multi-factor methodology. (Id. at 10-11, 13-16.)
Third, relying upon a statement made by Edison's counsel during the PHC, ORA argued that the filing of this application really constitutes an attempt by Edison to exhaust its administrative remedies at the CPUC before returning to FERC to pursue seriously the Conditional Request for Rehearing of Opinion 445. (Id. at 17-18.)
Finally, ORA pointed out that if Edison's application were to be granted, the Domestic rate group (i.e., residential customers) would pay about $870,000 more of the distribution revenue requirement, while the Large Power rate group (i.e., large commercial and industrial customers) would pay approximately $1.53 million less. (Id. at 19.)
After reviewing ORA's testimony, Edison advised the ALJ and ORA that it saw no need either for rebuttal testimony or hearings, and that the matter could be submitted on briefs. Pursuant to a ruling by the ALJ, Edison and ORA submitted concurrent briefs on September 28, 2001.
ORA's brief merely summarizes the points made at greater length in its testimony. Edison's brief relies principally on the application, but also addresses specifically a few of the points in the ORA testimony. First, Edison reiterates that it is not urging this Commission to cede its authority over distribution rates to FERC, as ORA contends. Rather, Edison states:
"Authorizing recovery of the TRRRMA costs is not based on a FERC proceeding alone. The Commission authorized the total revenue requirement in the first place and classified the costs that have been recorded in the TRRRMA as nongeneration. Just as important, this Commission did not unbundle the nongeneration revenue requirement into distribution and transmission components. Instead, the Commission arithmetically subtracted the proposed transmission revenue requirement from the total nongeneration revenue requirement authorized by the Commission. Thus, authorizing recovery of the amounts in the TRRRMA would not contradict previous Commission determinations, but would be consistent with them." (Edison Brief, p. 4; footnote omitted, emphasis in original.)
Second, Edison argues that ORA is "disingenuous" in arguing that Edison should be given an opportunity to return to FERC to prove that the costs booked in TRRRMA are transmission-related, because in Opinion 445, "FERC relied on the statements made by this Commission . . . which suggested that the recovery of the TRRRMA costs would not be denied simply because of different allocation methodologies used by the two regulatory authorities." (Id. at 5.)
Finally, Edison argues that the Commission should give little weight to ORA's concern about domestic customers having to pay more of the distribution revenue requirement if the application is granted, because the increase would amount to less than two cents per month for a typical residential customer, and is thus de minimis. (Id. at 6-7.)
