XIII. Ongoing DWR Operating and Portfolio Costs

A. Overview

In addition to the bond charge which covers DA cost responsibility for DWR costs through September 20, 2001, we must provide a DA CRS component for the ongoing costs that DWR has already incurred and will continue to incur subsequent to September 20, 2001. The DA CRS component to cover DWR costs subsequent to DA suspension effective on September 21, 2001 can be logically divided into two categories. First, a separate DA CRS component must be computed to cover the appropriate DA share of DWR power purchase costs for the period from September 21, 2001 through December 31, 2002, inclusive. Second, another DA CRS component must be determined for the DA share of the prospective DWR annual costs that will be incurred beginning January 1, 2003. We must also adopt to provide for subsequent updating of costs applicable to the DA CRS for 2004, and annually thereafter.

The DA CRS component for DWR costs covering September 21, 2001 through December 31, 2002, inclusive, represents the period subsequent to DA suspension but prior to institution of DA CRS pursuant to the instant proceeding. During this period, DWR has been collecting its revenue requirement entirely through bundled customer proceeds based on power charges that were implemented in D. 02-02-052. DA customers have not been charged anything to date to cover their share of the historic costs incurred by DWR during this period. Accordingly, a separate charge must be determined to assess the requisite share of costs on DA customers covering their responsibility for this period. Because DA customers' share of costs for this historic period have already been billed and collected from bundled customers and remitted to DWR, the charges to be assessed and collected from DA customers covering this period should be credited to bundled customers as a reduction in their bills representing a rebate for amounts they have already paid. The amounts credited to bundled customers should also include an interest component to recognize the time value of money covering the period from September 21, 2001 until the requisite offsetting funds are collected from DA customers and credited to bundled customers.

Because the DWR costs and operations for the period from September 21, 2001 through December 31, 2002 are by now essentially a matter of history, it is not necessary to deliberate over parties' various disputes over modeling forecasts of resource assumptions to compute the applicable DA cost responsibility for this period. Recorded data reflecting actual DWR operations from September 21, 2001 through December 31, 2002 can be used to calculate the applicable share of DA cost responsibility for this period. These recorded data items should be available in the DWR 2003 Revenue Requirement proceeding.

In addition to determination of the historic charge for the period beginning September 21, 2001 and through December 31, 2002, DA customers must also be assessed a DWR power charge representing their share of DWR costs for the 12 months beginning January 1, 2003. For this purpose, we shall direct that Navigant re-run its PROSYM model consistent with the resource assumptions underlying the DWR revenue requirement and inter-utility allocations that are being implemented in A.00-11-038 et al. Consistent with our adoption of a total portfolio approach to calculating bundled customer indifference, the Navigant model should be run consistent with the methodologies we adopt in today's decision, as discussed below.

Data in the record of A.00-11-038 et al., concerning the true up of prior period forecasts of DWR revenue requirements to reflect updated recorded data can be used to compute the applicable DA cost responsibility for the DWR power charge covering this period. DWR indicates that actual cost data through December 31, 2002 will not become available until the end of the first quarter of 2003. As part of our order in the DWR revenue requirement proceeding (A.00-11-038 et al.), we expect to address the issue of the manner and timing of the true up of the difference between estimated to actual DWR costs through December 31, 2002.

We direct that once we make these determinations in the A.00-11-038 et al. proceeding concerning the true up, the timing can then be determined more specifically as to the implementation of the calculations for the pre-2003 DWR power charge to be assigned to DA customers. Consistent with the methodologies we adopt in this order, the DA cost responsibility for the DWR power charge for the period September 21, 2001 through December 31, 2002 shall be determined by having Navigant perform a run of the PROSYM model utilizing the DA in/DA out approach outlined herein. The DA-out case will be based on the actual recorded data that covers that period. The DA-in case will require a back cast which simulates how costs would have changed if incremental DA load had been included in bundled load. The ALJ shall issue a procedural ruling in coordination with A.00-11-038 et al. to schedule further implementation of these calculations, including workshops, as needed.