3. Discussion

Resolution G-3322, adopted on January 23, 2002, extended interim funding for utility LEV programs in anticipation of a Commission decision on the utilities' applications by no later December 31, 2002. However, our decision on the pending applications is necessarily delayed.

Without continued interim funding, the utilities may no longer be able to conduct certain LEV program activities. The utilities must comply with federal mandates, which require that a portion of their fleets consist of alternative fuel vehicles. Continued funding is needed to ensure that adequate facilities and equipment are in place to support an increased number of LEVs in utility fleets. The utilities also claim that they provide an important public service, by serving as a primary source of information on product safety and LEV performance and training on safe refueling practices and proper equipment use. These activities, along with continued RD&D by the utilities, may benefit the public by promoting the development and usage of LEVs, thereby contributing to improved air quality, lower fuel costs and increased energy efficiency for the operation of vehicles, and an overall reduction in energy consumption for transportation purposes.

In addition, we believe that in Section 740.3, the Legislature expressed a strong public policy in favor of the development of infrastructure and equipment to support LEV usage, through the efforts of the Commission in cooperation with the utilities, other applicable public agencies, and the motor vehicle industry.

Under these circumstances, we find it reasonable to extend the current funding for LEV programs conducted by PG&E, SoCal Gas, SDG&E, and SCE, at the levels previously approved in Resolution G-3322, pending our final decision on the applications. The use of this funding is limited to existing utility LEV programs previously approved in D.95-11-035 that otherwise would not be funded. We do not prejudge the utilities' applications for any additional funding or new program activities, or whether continued funding of existing LEV program activities pursuant to our final decision is appropriate.

While the applications are pending, the utilities shall conduct their LEV activities as described in their advice letters approved as modified by Resolution G-3322, as well as prior Commission decisions regarding utility LEV programs. The utilities shall continue to record their expenses in one-way balancing accounts, as required by D.95-11-035 and Resolution G-3322. If we later determine that some aspects of the utility LEV programs conducted pursuant to the advice letters should not be funded with ratepayer money, we shall exclude those amounts from future rates.