Background
Pursuant to Ordering Paragraph 152 of D.00-02-046, PG&E's 1999 general rate case (GRC) decision, PG&E filed this 2001 ARA application requesting a total electric revenue requirement increase of $186.126 million. Approximately two-thirds of this proposed increase is asserted to be capital-related, caused by the continued growth in PG&E's electric distribution rate base. The remaining one-third is asserted to reflect inflation in PG&E's electric distribution operating expenses.
On October 18, 2000, Commissioner Wood issued his Assigned Commissioner's Ruling (ACR), which, among other things, determined that (1) "[i]n no event will the Commission's final decision be issued later than January 2002"; (2) "a final order will not be issued before the end of 2000"; and (3) "[w]e will consider an interim order that would allow the final decision in this proceeding to be effective as of the date of the interim order."
On December 21, 2000, the Commission issued an interim order "that the final decision in this proceeding shall be effective as of the effective date of this Interim Order." (D.00-12-061, p. 5.) The Interim Order was effective December 21, 2000.
On January 10, 2001, Administrative Law Judge (ALJ) Barnett established a two-phase schedule for this application and specified the following issues for Phase 1 and Phase 2:
Phase 1:
· Review of PG&E's Attrition Rate Adjustment mechanism and calculations. PG&E's request, made in Advice Letter 2040-E, for implementation of the 2001 electric attrition rate adjustment will be considered in this proceeding.
· If an attrition increase is approved, whether it should be based on two years (2000 and 2001) or one year (2001) of cost increase.
· Energy Division's financial audit.
· Review of vegetation management expenditures (for 1999 and 2000) as ordered in Ordering Paragraph 15 of Decision 00-02-046. PG&E's request made in Advice Letter 2016-E, for approval to transfer the year-end balance of the Vegetation Management Balance Account (VMBA) to the Transition Revenue Account will be considered here.
Phase 2:
· Consultant's engineering audit on 1999 capital spending.
Hearings were held in Phase 1, starting June 6, 2001. Phase 1 was submitted on August 1, 2001, upon receipt of briefs.
2 Ordering Paragraph 15 states: "PG&E's request for authority to implement Attrition Rate Adjustments is granted, subject to modification to take into account the results of the 1999 capital spending audit and to recognize amounts recorded in the VMBA." (D.00-02-046, mimeo., p. 545.)
