7. Assignment of Proceeding
Loretta M. Lynch is the Assigned Commissioner and Julie M. Halligan is the assigned Administrative Law Judge in this proceeding.
1. The utilities are subject to the Commission's jurisdiction and are entering into these Agreements at the Commission's direction. It is not reasonable to allow the utilities to terminate the Agreements without Commission approval.
2. The provisions in Section 5.01(f) of the Agreements, allowing the utilities to delegate least cost decision making responsibility to DWR are not reasonable and should be rejected.
3. DWR's role in providing electricity should cause the least possible increase in the total cost that electric end-use customers pay for generation procurement.
4. The option concerning Utility Fees and Charges should be rejected because it is too costly and is inconsistent with D.02-09-053 and D.02-12-074.
5. The DWR reimbursement option of recovery of utility fees and charges is neither more cost effective, nor more efficient and should be rejected.
6. It is not reasonable for the Commission to cede its authority to approve or modify the Agreement to an arbitrator.
7. Utility Gas Supply Plans should be filed by compliance Advice Letter.
8. The initial Utility Gas Supply Plans should be subject to expedited Commission review and approval.
9. PG&E's "economic stacking" protocol is inconsistent with the pro rata sharing policy adopted in D.02-09-053.
10. As modified, the Operating Agreements filed by PG&E and SDG&E are in the public interest and should be approved.
1. The proposed modifications to the Agreements and related attachments are reasonable, consistent with the law and Commission policy, and should be adopted.
2. The Commission should retain the provision adopted in D.02-12-069 requiring the utilities to apply to the Commission for approval to terminate the Operating Agreements.
3. The Commission should reject the requirement that the Utilities submit to binding arbitration in the event of disputes or disagreements. In the event of disputes or disagreements, the utilities should request Commission adjudication of the issue.
4. Consistent with D.02-09-053 and D.02-12-074, administrative costs associated with the DWR contracts should be recovered through base rates in the general rate case proceedings. PG&E and SDG&E should modify their
Operating Agreements to exclude the option concerning Utility Fees and Charges.
5. As discussed in this decision, it is not reasonable to delegate least cost decision making responsibility to DWR.
6. PG&E's economic stacking protocol should be rejected because it is incomplete, inconsistent with D.02-09-053, and does not reflect least cost dispatch principles.
7. The Commission should permit PG&E and SDG&E to file the executed Operating Agreements, modified as directed herein, as compliance Advice Letters within seven days of the effective date.
8. Public necessity requires that the 30-day comment period of Pub. Util. Code § 311(g) be reduced so that PG&E and SDG&E can begin operating under the Agreements as soon as possible. We have balanced the public interest in avoiding harm to the public welfare resulting from delay in considering this decision against the public interest in having the full 30-day the period for review and comment required by Section 311(g). We conclude that the public interest in adopting operating Agreement outweighs the latter. Accordingly, we should reduce the comment period.
IT IS ORDERED that:
1. The clean version of the Operating Agreement between the State of California Department of Water Resources (DWR) and Pacific Gas and Electric Company (PG&E), attached hereto as Appendix A, is approved.
2. The clean version of the Operating Agreement between the DWR and San Diego Gas and Electric Company (SDG&E), attached hereto as Appendix B, is approved.
3. As discussed in this decision, PG&E and SDG&E may file executed Operating Agreements as compliance advice letters within seven days.
4. If PG&E or SDG&E choose not to file executed Operating Agreements, they shall remain subject to the Operating Order adopted in D.02-12-069.
5. As discussed in this decision, PG&E, SDG&E and SCE shall file their Gas Supply Plans by compliance Advice Letters for expedited Commission review and approval.
6. PG&E, SDG&E, and SCE are directed to file the initial Gas Supply Plans on April 17, 2003 and subsequent gas supply plans every six months thereafter for the term of the Operating Agreements/Order.
This order is effective today.
Dated April 3, 2003, at San Francisco, California.
MICHAEL R. PEEVEY
President
CARL W. WOOD
LORETTA M. LYNCH
GEOFFREY F. BROWN
SUSAN P. KENNEDY
Commissioners
