9. Ratemaking Treatment of Sale Proceeds

PG&E states that it will fully amortize the Pipeline Assets and Pump Station Assets by the end of 2005, in accordance with D.97-11-074 issued during the deregulation of California's electric industry. Because ratepayers bore the cost recovery burden resulting from the accelerated amortization of these assets, PG&E concludes there is no basis for allocating any of the gain on sale to shareholders. The Office of Ratepayer Advocates (ORA) agrees with PG&E's proposal to allocate to ratepayers the entire gain on sale through a credit to the depreciation reserve.¹⁴ Accordingly, we will allocate the entire gain on sale to ratepayers. However, today's decision is based on the specific facts of this case and should not be viewed as setting a precedent for the future treatment of gain on sale that is being considered in Order Instituting Rulemaking (R.) 04-09-003.