Advice Letter Format

The ALJ ruling asked parties to comment on the format for any advice letter under Section 399.2.5(c)(1) and (2).

DRA provided useful comments on the question of advice letter format. It proposes that if a utility seeks relief pursuant to Section 399.2.5(c)(2), the Commission should require the utility to file a Tier 2 advice letter to establish a memorandum account to track "costs incurred prior to permitting or certification." When the utility seeks to recover the eligible costs tracked in the memorandum account, DRA proposes the Commission require the filing of a Tier 3 advice letter.

We find DRA's proposals reasonable because they allow due process and an opportunity for comment prior to the Commission acting on the advice letters. We will specify the following formats for advice letter filings under Section 399.2.5(c)(1) and (2):

· Filings under Section 399.2.5(c)(1) that request a finding of eligibility for cost recovery shall be Tier 2 advice letters.

· Filings under Section 399.2.5(c)(2) that request authority to record pre-permitting costs in a memorandum account shall be Tier 3 advice letters.

· Filings under Section 399.2.5(c)(2) that request authority to recover costs incurred prior to permitting or certification that have been recorded in a previously established Commission-approved memorandum account shall be Tier 3 advice letters.

The Director of Energy Division is authorized to develop standardized formats required to be used in all such advice letters, submitted under Sections 399.2.5(c)(1) and (2).

This provides a logical sequence of advice letters under Section 399.2.5(c)(1) and (2). Of course, neither the Commission's approval of an advice letter seeking a determination of eligibility for cost recovery under Section 399.2.5(c)(1 ) nor the Commission's approval of an advice letter seeking permission to set up a memorandum account to record pre-permitting costs under Section 399.2.5(c)(1) will determine whether the Commission approves any subsequent advice letter pursuant to Section 399.2.5(c)(2) in which a utility seeks to recover pre-permitting costs that have been recorded in a previously approved memorandum account.

PG&E comments that only utilities with retail customers subject to rates authorized by the Commission can recover costs under Section 399.2.5. PG&E states that as a prerequisite, the Commission should specify that any entity seeking cost recovery under Section 399.2.5 must be a Commission-jurisdictional entity. We agree with PG&E and specify that entities filing an advice letter seeking cost recovery under Section 399.2.5(c)(1) and (2) must be a utility with retail customers subject to rates authorized by the Commission.