2. Introduction

Pacific Gas and Electric Company (PG&E) submits this application for Energy Resource Recovery Account (ERRA) compliance review for the record period January 1 through December 31, 2009. PG&E requests the Commission to find that during the record period PG&E made appropriate entries to its ERRA as well as to its Renewables Portfolio Standard Cost Memorandum Account (RPSCMA), and complied with its Conformed 2006 Long-Term Procurement Plan in the areas of fuel procurement for utility retained generation, administration of power purchase contracts, and least cost dispatch of electric generation resources. Also, PG&E proposes recovery of the actual, incremental costs it has incurred to implement the California Independent System Operator's (CAISO) Market Redesign and Technology Upgrade (MRTU) initiative. PG&E requests authorization of $18.3 million MRTU-related electric revenue requirement to be effective in rates on January 1, 2012.

The Division of Ratepayer Advocates (DRA) performed an examination which covered PG&E's administration of power purchase agreements, least cost dispatch, utility retained generation fuel expenses and operations, an audit of the ERRA and RPSCMA balancing account entries, as well as the revenue requirements and rates associated with PG&E's MRTU implementation costs. Other than MRTU issues, DRA recommended no adjustments. In regard to MRTU, DRA recommended that all implementation expenses and associated revenue requirement be deferred to an investigation which included the MRTU expenses of all three major electric utilities: PG&E, Southern California Edison Company (SCE), and San Diego & Electric Company (SDG&E). If the MRTU issues are not deferred, DRA would limit the revenue requirement to $932,012.