2. Background

During the hot weather of July 2006, certain equipment of PG&E failed. In part of this application, PG&E characterized this event as catastrophic and sought to have its expenses and investments in repairing the damage recovered through its CEMA. In Decision (D.) 07-07-041, dated July 26, 2007, the Commission found that PG&E had not satisfied the applicable eligibility standards for CEMA ratemaking treatment. We therefore denied that portion of the application.

This decision addresses the balance of the application, the 2005-2006 New Year's Storms. During the latter part of 2005 and early 2006 there was a series of winter storms which caused damage to PG&E's distribution system from Humboldt to Bakersfield. Governor Schwarzenegger issued emergency proclamations on January 2, 3, and 12, 2006 covering 34 counties. (Ex. PG&E-1. pp. 1-7, and Ex. PG&E-2, pp. 1-6 - 1-8.)