8. Ratemaking Treatment

At the request of the Office of Ratepayer Advocates (ORA), PG&E provided further details regarding the proposed accounting treatment in its May 29, 2000 supplement to the application. ORA does not oppose PG&E's proposed accounting treatment or the proposal to sell the property.

PG&E proposes to credit the TCBA with the net proceeds after accounting for transaction costs, taxes and net book value. Since sales proceeds will not yield a credit, the uneconomic costs will be amortized over the remaining months of the transition period. (D.97-11-074.)

Given that the property will sell at a loss, a tax benefit would accrue to PG&E. Exhibit B to the Application estimates this tax credit to be $40,990. ORA has confirmed that PG&E's proposed treatment of the loss and its tax effects is proper and conforms with tax treatment used in association with the sale of the Sonoma County Geysers Units approved in D.99-04-026.

We agree with PG&E's proposed accounting and ratemaking treatment.