ALJ/DUG/avs Date of Issuance 1/11/2008

Decision 08-01-021 January 10, 2008

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Application of PACIFIC GAS AND ELECTRIC COMPANY to Recover Incremental Costs Related to the 2005-2006 New Year's Storms and July 2006 Heat Storm Recorded in the Catastrophic Event Memorandum Account (CEMA) Pursuant to Public Utility Code Section 454.9. (U39E)

Application 06-11-005
(Filed November 13, 2006)

FINAL OPINION ON RECOVERY BY PACIFIC GAS AND ELECTRIC COMPANY FOR A CATASTROPHIC EVENT MEMORANDUM ACCOUNT RELATED TO THE 2005-2006 NEW YEAR'S STORMS

TABLE OF CONTENTS

Title Page

FINAL OPINION ON RECOVERY BY PACIFIC GAS AND ELECTRIC COMPANY FOR A CATASTROPHIC EVENT MEMORANDUM ACCOUNT RELATED TO THE 2005-2006 NEW YEAR'S STORMS 2 2

1. Summary 2 2

2. Background 2 2

3. Procedural History 3 3

4. Standard of Review 3 3

4.1 Overview 3 3

4.2. Standard for Approval of a Settlement 4 4

4.2.1. Uncontested Settlement 5 5

5. Settlement 5 5

5.1. Eligibility for CEMA Recovery 7 7

5.2. The Settlement is Reasonable 9 9

5.2.1. Reasonable in Light of the Whole Record 9 9

5.2.2. Consistent With Law 9 9

5.2.3. In The Public Interest 9 9

6. Ex Parte Violations 11 11

6.1. Background 11 11

6.2. Discussion 13 13

7. Comments on Proposed Decision 15 15

8. Assignment of Proceeding 16 16

Findings of Fact 16 16

Conclusions of Law 17 17

FINAL ORDER 19 19

The Catastrophic Event Memorandum Account Proceeding 1 1

The Settlement 2 2

Reservations 4 4

APPENDIX A

FINAL OPINION ON RECOVERY BY PACIFIC GAS AND ELECTRIC COMPANY FOR A CATASTROPHIC EVENT MEMORANDUM ACCOUNT RELATED TO THE 2005-2006 NEW YEAR'S STORMS

1. Summary

This opinion allows Pacific Gas and Electric Company (PG&E) to recover the settlement amount for 2005-2006 New Year's Storms' costs recorded in a Catastrophic Event Memorandum Account (CEMA). The adopted electric revenue requirement is $12,138,000, including interest through December 31, 2010, franchise fees, and uncollectibles, to be collected in rates beginning January 1, 2008, with $9,333,000 collected in rates in 2008, $1,431,000 in 2009, and $1,374,000 in 2010. PG&E will record the CEMA revenue requirement in its Distribution Revenue Adjustment Mechanism ($11,460,000) and to the Utility Generation Balancing Account ($503,000) for rate recovery through the Annual Electric True-up advice letter. (Settlement, p. 3.) This decision also resolves PG&E's ex parte violations. This proceeding is closed.