5. Discussion

The application asks that the Commission waive collection of the entire amount of the DA CRS for SierraPine's Rocklin facility. Pursuant to Section 367.3(b), the Commission may do so for a qualifying direct transaction customer if it finds that such a waiver is in the public interest and there is no feasible alternative. The Commission is authorized to waive collection to the extent necessary to mitigate the threat of imminent and certain closure of the facility.

5.1 Public Interest Consideration

We conclude on this record that waiving collection of the DA surcharge for the Rocklin facility is in the public interest. The Rocklin facility employs more than 200 individuals. Absent relief, the facility will be forced to close, resulting in the loss of those 200 jobs and the loss of $60 million that the facility adds to the local and state economy.

Additionally, if the facility shuts down, PG&E will receive no distribution, transmission, generation or other revenues from Sierra Pine. Included in PG&E's rates is a Commission-determined reasonable rate of return. Sierra Pine (like any other customer) contributes to PG&E's return. If Sierra Pine shuts down, the contribution to margin provided by Sierra Pine will be spread to all other PG&E customers. This decision does not discount any portion of Sierra Pine's bill other than the DA CRS . Therefore, it is in the public interest to maintain Sierra Pine as a viable entity in order to avoid cost-shifting.

Moreover, closure of the facility would have environmental repercussions. The Rocklin facility recycles 200,000 tons of wood waste per year. The California Integrated Waste Management Board has honored the Rocklin facility with a Waste Reduction Awards Program award for the past two years. Closure of the plant would result in the loss of this recycling effort.

5.2 Avoiding Imminent Closure

The record shows that absent waiver of the DA CRS, there is no other feasible alternative that will allow the Rocklin facility to stay in operation. The application notes that the facility is now operating on a reduced schedule due to the high cost of electricity. Waiver of the surcharge may permit the facility to return to full operation.

5.3 Shifting of Costs

We conclude that the waiver of the DA CRS will not result in any shifting of costs to bundled service customers or delay full and timely recovery of costs from direct access customers as a group. Any reduction in the amount of DA CRS collected will be no different than the reduction that would occur were the Rocklin facility to close, an inevitable result should the Commission decline to grant the waiver. The waiver will not shift any cost responsibility to bundled customers, since direct access customers as a group will remain responsible for the same costs whether or not a waiver is granted. Finally, deferral of the DA CRS collection would not afford SierraPine the necessary relief, since the historically thin margins in the MDF business would not allow SierraPine to pay DA CRS amounts in the future.

Accordingly, for the reasons set forth in this decision and pursuant to the direction given to us in Pub. Util. Code § 367.3, the Commission waives collection of the DA CRS for SierraPine's Rocklin facility.