5. Framework for the D.04-12-048 NBC

The IOUs propose that D.04-12-048 NBC recovery should be implemented in the form of a surcharge based on the extent that certain generation resources are uneconomic and the costs may be stranded. To make that determination, the costs of the appropriate generation resources would be compared to a market benchmark. If the resource costs are greater than the market costs, the resources are considered uneconomic and a surcharge based on that difference would be imposed. Having a customer, who chooses an alternative energy supply, pay a surcharge that covers the uneconomic portion of the resource costs associated with that customer's departure will leave the bundled customer indifferent to the departure. This general framework is reasonable, and we will adopt it for the purpose of implementing the D.04-12-048 NBC, subject to our previous determinations regarding the applicability of the charges.