ALJ/RAB/avs Date of Issuance 8/4/2011
Decision 11-07-039 July 28, 2011
BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA
Application of Pacific Gas and Electric Company (U39E) for Review of Entries to the Energy Resource Recovery Account (ERRA) and Renewables Portfolio Standard Cost Memorandum Account (RPSMA), and Compliance Review of Fuel Procurement for Utility Retained Generation, Administration of Power Purchase Contracts, and Least Cost Dispatch of Electric Generation Resources for the Record Period of January 1, through December 31, 2009 and for Adoption of Electric Revenue Requirements and Rates Associated with the Market Redesign and Technology Upgrade (MRTU) Initiative (U39E). |
Application 10-02-012 (Filed February 12, 2010) |
Gail Slocum, Attorney at Law, for
Pacific Gas and Electric Company, Applicant.
Mitchell Shapson, Attorney at Law, for
The Division of Ratepayer Advocates, Protestant.
DECISION FINDING A REVENUE REQUIREMENT OF
$18.3 MILLION FOR PACIFIC GAS AND ELECTRIC COMPANY
AND APPROVING VARIOUS ACCOUNTS
Table of Contents
Title Page
DECISION FINDING A REVENUE REQUIREMENT OF $18.3 MILLION FOR PACIFIC GAS AND ELECTRIC COMPANY AND APPROVING VARIOUS ACCOUNTS 22
6.1. ERRA Compliance Issues 77
6.1.1. PG&E's Fuel Expenses for Utility Retained Generation 88
6.1.2. PG&E's Contract Administration Complied with Standard of Conduct 4 99
6.1.2.1. PG&E's Agreement to Provide Additional Information on Compliance with the Commission's Gas Hedging Plan in CDWR Contract Gas Procurement 99
6.1.2.2. PG&E's Agreement with DRA on Future Provision of Additional Information on PG&E's Internal Audit Plan 1010
6.1.2.3. PG&E's Least Cost Dispatch Activities in Electric Procurement During 2009 1111
6.1.2.4. PG&E's ERRA and RPSCMA Balancing Account Entries During 2009 1111
7. Background on MRTU and Its Implementation Timeline 1111
8. The MRTU Memorandum Account (MRTUMA) 1616
9. The Review of PG&E's MRTU Implementation Costs Should Not Be Deferred 1717
9.1. The Projects for Which PG&E is Seeking Review are Complete 1717
9.2. No Further Proceeding to Develop Review Standards is Necessary 1818
9.3. Review of PG&E's MRTU Implementation Costs Should not be Deferred to a Three-Utility Consolidated Proceeding 1919
10. The Costs to be Recovered Via the MRTU Memorandum Account are Incremental 2020
10.1. PG&E Established Specific Orders to Track MRTU Implementation Costs 2121
10.2. There is no Overlap Between MRTUMA Cost Recovery and Cost Recovery in Demand Response Proceedings 2121
10.3. There is no Overlap Between MRTUMA Cost Recovery, and Cost Recovery in PG&E's General Rate Case 2222
11. The Costs to be Recovered by the MRTU Memorandum Account are Verifiable 2323
11.1. Overview of PG&E Departments Incurring MRTU Implementation Costs 2323
12. PG&E's MRTU Capital Expenditures 2525
12.1. Overview of the IT Process for Developing Capital Projects 2626
12.2. Initial MRTU Implementation Capital Expenditures are Verifiable 2626
12.2.1. The Complexity of the Initial MRTU Implementation 2626
12.2.2. ISTS and the MRTU Program 2828
12.2.3. Purchased Software Costs 2929
12.3. 2009 Pre-Summer Release Expenditures 3030
13. Comments on Proposed Decision 4141
14. Assignment of Proceeding 4141
DECISION FINDING A REVENUE REQUIREMENT OF
$18.3 MILLION FOR PACIFIC GAS AND ELECTRIC COMPANY
AND APPROVING VARIOUS ACCOUNTS
1. Summary
This decision finds that Pacific Gas and Electric Company's (PG&E) administration of its Energy Resource Recovery Account (ERRA) power purchase agreements, its utility retained generation administration relative to fuel costs, its procurement least-cost dispatch activities, and its procurement-related revenue and expenses recorded in its ERRA for the 2009 Record Period were prudent. PG&E's administration of its allocated California Department of Water Resources contracts, conventional generation contracts, renewable energy contracts, Average Market Price demand response contracts, and non-QF contracts were prudent. PG&E should be authorized to recover in 2012 rates the $18.3 million revenue requirement applicable to Market Redesign and Technology Upgrade (MRTU) capital costs, subject to an audit.
