4. PG&E's Application

On January 7, 1999, PG&E filed its application in accordance with the provisions of Section 454.9 and Resolution E-3238. PG&E's showing includes the costs recorded on or before May 31, 1999, from seven declared disasters: (1) the February 1998 Storms, (2) the 1997 New Year's Flood, (3) the March 1995 Storms, (4) the January 1995 Storms, (5) the Northridge Earthquake, (6) the Calaveras and Shasta County Fires, and (7) the Oakland/Berkeley Hills Fire.

PG&E requests recovery of revenue requirements of $75.9 million in the year 2000, plus $2.2 million in gas transmission revenues in the years 2001 and 2002, plus $7.0 million for correction of a calculation error relating to depreciation expense in its revenue requirements model. (Exhibits 1, 2, and 3.) Adding the revenue requirements together, PG&E's total request amounts to $85.1 million.

PG&E states that in compliance with Resolution E-3238, PG&E adjusted its CEMA request to reflect insurance reimbursement received for the 1997 New Year's flood, which is the only one of the seven disasters for which PG&E received insurance recovery. PG&E also adjusted its CEMA request to remove any costs recovered in previous and current General Rate Case (GRC) proceedings, Non-Nuclear Capital Addition Proceedings and Section 368(e) System Safety and Reliability Enhancement Funds.

PG&E submits that it is impossible to go back and re-create some "assumed" level of straight-time labor costs embedded in its revenue requirement over the past several years. As a result, PG&E took a conservative approach and is not requesting recovery of any straight-time labor costs associated with CEMA event expenses. The excluded costs include benefits associated with straight-time labor, and other costs that do not change as a result of a disaster. PG&E contends that even though there are certainly some straight-time labor costs that would not have occurred absent the catastrophic event, PG&E's conservative approach eliminates any possibility that ratepayers will pay twice for straight-time labor costs.