4. MRTU Cost Recovery
On June 7, 2007, Commission Resolution E-4093 approved the MRTU Memorandum Account (MRTUMA), in which PG&E is authorized to record the revenue requirements associated with incremental MRTU expenditures, less the amount previously approved in PG&E's 2007 general rate case (GRC) for MRTU. Under the MRTUMA, PG&E can recover any revenue requirements recorded in the memorandum account in rates after PG&E has demonstrated the reasonableness of the underlying expenditures in a Commission proceeding. Subsequently, on July 23, 2008, in response to Advice Letter 3281-E-A, PG&E was authorized to create a demand response subaccount in the MRTUMA to track MRTU costs related to demand response effective July 30, 2008.
We also discussed recovery of MRTU expenditures in PG&E's 2010 ERRA forecast proceeding.2 We said that the scope of our review of PG&E's MRTU costs is not necessarily a traditional reasonableness review, stating `[t]he MRTU project is a project mandated by regulatory and reliability requirements of the California Independent System Operator and Federal Energy Regulatory Commission. Therefore, the Commission expects the review of these costs to primarily focus on whether the costs can be verified and are incremental."3
An earlier ruling issued in the 2010 ERRA forecast proceeding had determined that the MRTU issues were outside of the scope of that proceeding, and directed PG&E to include the MRTU costs in "PG&E's next general rate case, ERRA reasonableness review, or other appropriate proceeding."4 Consistent with that direction, PG&E has included its request for MRTU cost recovery in this ERRA compliance proceeding. In this application, PG&E requests a determination that PG&E's actual capital expenditures to implement the initial MRTU market launch on March 31, 2009 (Release 1) , are reasonable; a determination that PG&E's actual capital expenditures related to the Pre-Summer Release of the Markets and Performance (MAP) phase of MRTU (operative August 2009) are reasonable; and a determination that PG&E's actual incremental expenses incurred for MRTU from June 7, 2007,5 when the Commission authorized PG&E's MRTUMA, through December 31, 2009, are reasonable.
PG&E seeks recovery in 2011 rates of $18.3 million in revenue requirement associated with MRTU implementation expenditures. PG&E proposes to recover the non-demand response portion of this revenue requirement through the Utility Generation Balancing Account (UGBA), and the demand response portion of this revenue requirement through the Demand Response Revenue Balancing Account (DRRBA). The approved MRTU cost recovery will be consolidated with other approved electric revenue requirement and rate changes through the Annual Electric True-Up (AET) to become effective in rates on January 1, 2012.
2 Application (A). 09-06-001.
3 D.09-12-021, at 3, fn. 1.
4 August 17, 2009, Scoping Memo and Ruling of Assigned Commissioner at 3. (Emphasis added.)
5 July 30, 2008 for incremental MRTU expenses related to demand response.
