9. Assignment of Proceeding

Michael R. Peevey is the assigned Commissioner and Seaneen M. Wilson is the assigned ALJ in this proceeding.

Findings of Fact

1. On September 17, 2010, the Joint Parties filed an All-Party Motion requesting the Commission to adopt a settlement agreement entitled Settlement Agreement Between and Among Pacific Gas and Electric Company, the Division of Ratepayer Advocates, and The Utility Reform Network.

2. On January 14, 2011, the Joint Parties filed two motions - one requesting modification of the Proposed Decision and another requesting modification of their previously filed Settlement Agreement. Joint Parties also requested a shortened response time to both motions, which the assigned ALJ granted. No responses were received.

3. All issues in this proceeding are encompassed by, and resolved in, the Settlement Agreement.

4. The parties to the Revised Settlement Agreement are all of the active parties in this proceeding.

5. The parties are fairly reflective of the affected interests.

6. No term of the Revised Settlement Agreement contravenes statutory provisions or prior Commission decisions.

7. The Revised Settlement Agreement conveys to the Commission sufficient information to permit it to discharge its future regulatory obligations with respect to the parties and their interests.

8. The Settlement Agreement is reasonable in light of the record, is consistent with law, and is in the public interest.

Conclusions of Law

1. Pursuant to the motions filed on January 14, 2011, the Joint Parties requested revisions should be made to the decision herein, and the Revised Settlement Agreement should be adopted.

2. The settlement agreement as revised by the Joint Parties' January 14, 2011 motion, is reasonable in light of the whole record, consistent with law, in the public interest, and should be approved.

3. In the next regularly scheduled rate change following approval of the Revised Settlement Agreement, PG&E should return to customers the difference between what has been already included in rates through 2010 ($148.69 million) and the total budget included in the Revised Settlement Agreement adopted herein ($112.22 million), which is approximately $36.47 million.

4. After all authorized program costs have been recorded in the ACEBA for this program cycle (ending December 31, 2011), including any program costs committed and expected to be incurred or paid after 2011, PG&E should return to customers any remaining unspent program funds through its AET advice letter filing.

5. PG&E should provide to the Energy Division and the Parties of this proceeding annual reports on the SmartAC^TM Program for program years 2010 and 2011. These reports should be submitted no more than six weeks after the annual Ex Ante Load Impact Evaluation Reports, which are due April 1 of the following year.

6. PG&E Schedules E-RSAC, E-CSAC, and electric rate schedules for the SmartAC^TM Program, should be revised as shown in Exhibits A and B to the Settlement Agreement, in order to add clarifying language similar to that approved by the Commission for the Base Interruptible Program rate schedule.

7. PG&E should seek Commission approval by advice letter, of future requests to revise Schedules E-RSAC, E-CSAC, and electric rate schedules for the SmartAC^TM Program. Revisions should be consistent with the Settlement Agreement authorized herein.

8. PG&E should seek Commission approval by advice letter, of future revisions to the Schedule E-RSAC, Schedule E-CSAC, and rate schedules regarding implementation of a price trigger as described in the Revised Settlement Agreement and authorized herein.

9. This decision should be effective today so that the Revised Settlement Agreement may be implemented expeditiously.

10. The testimony and exhibits served by PG&E, DRA, and TURN in A.09-08-018 should be admitted into the record (see Attachment A).

11. The Joint Parties' motion to seal portions of the evidentiary record, including PG&E's Exhibits PGE-1C and PGE-2C, DRA's Exhibit DRA-1C, and TURN's Exhibit TURN-1C should be granted for 2 years.

12. A.09-08-018 should be closed.

ORDER

IT IS ORDERED that:

1. The Settlement Agreement Between and Among Pacific Gas and Electric Company, the Division of Ratepayer Advocates and The Utility Reform Network filed on January 14, 2011, is approved.

2. Pursuant to the motions filed on January 14, 2011, the Joint Parties requested revisions have been made to the decision herein.

3. In the next regularly scheduled rate change following approval of The Settlement Agreement Between and Among Pacific Gas and Electric Company, The Division of Ratepayer Advocates, and The Utility Reform Network, filed on January 14, 2011, Pacific Gas and Electric Company must return to customers the difference between what has already been included in rates through 2010 ($148.69 million) and the total budget included in the Settlement Agreement adopted herein ($112.22 million), which is approximately $36.47 million.

4. After all authorized program costs have been recorded in the Air-Conditioning Expense Balancing Account for this program cycle (ending December 31, 2011), including any program costs committed and expected to be incurred or paid after 2011, Pacific Gas and Electric Company must return to customers any remaining unspent program funds through its Annual Electric True-up advice letter filing.

5. Pacific Gas and Electric Company must provide to the Energy Division and the Parties of this proceeding, annual reports on the SmartAC^TM Program for program years 2010 and 2011. These reports must be submitted no more than six weeks after the annual Ex Ante Load Impact Evaluation Reports, which are due April 1 of each year.

6. Pacific Gas and Electric Company Schedules E-RSAC, E-CSAC, and electric rate schedules for the SmartAC^TM Program, must be revised as shown in Exhibits A and B to the Settlement Agreement approved in Ordering Paragraph 1, in order to add clarifying language similar to that approved by the Commission for the Base Interruptible Program rate schedule.

7. Pacific Gas and Electric Company must seek Commission approval by advice letter, of future requests to revise Schedules E-RSAC, E-CSAC, and electric rate schedules for the SmartAC^TM Program. Revisions must be consistent with the Settlement Agreement approved in Ordering Paragraph 1.

8. Pacific Gas and Electric Company must seek Commission approval by advice letter of future revisions to the Schedule E-RSAC, Schedule E-CSAC, and rate schedules regarding implementation of a price trigger as described in the Settlement Agreement and approved in Ordering Paragraph 1.

9. The testimony and exhibits served by Pacific Gas and Electric Company, the Division of Ratepayer Advocates, and The Utility Reform Network in Application 09-08-018 are admitted into the record (see Attachment A for list of documents entered into the record).

10. The Joint Parties' motion to seal portions of the evidentiary record, including Exhibits PGE-1C, PGE-2C, Exhibit DRA-1C, and TURN-1C is granted. The information will remain under seal for a period of two years after the date of this order. During this two-year period, this information may not be viewed by any person other than the assigned Commissioner, the assigned Administrative Law Judge, the Assistant Chief Administrative Law Judge, or the Chief Administrative Law Judge, except as agreed to in writing by Pacific Gas and Electric Company, the Division of Ratepayer Advocates, and The Utility Reform Network, or as ordered by a court of competent jurisdiction. If Pacific Gas and Electric Company, the Division of Ratepayer Advocates, or The Utility Reform Network believes that it is necessary for this information to remain under seal for longer than two years, Pacific Gas and Electric Company, the Division of Ratepayer Advocates, or The Utility Reform Network may file a new motion at least 30 days before the expiration of this limited protective order.

11. The preliminary determination regarding the need for hearing is changed from yes to no. Hearings are not necessary.

12. Application 09-08-018 is closed.

Dated January 27, 2011, at San Francisco, California.

MICHAEL R. PEEVEY

President

MICHEL PETER FLORIO

CATHERINE J.K. SANDOVAL

Commissioners

Commissioner Timothy Alan Simon, being necessarily absent, did not participate.

Attachment A

List of Testimony and Exhibits

Entered into Record in A.09-08-018

(End of Attachment A)