COM/SK1/bb1

MAILED 11/07/03

Decision 03-10-086 October 30, 2003

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

In the Matter of the Joint Application of Southern California Gas Company (U 904 G) and San Diego Gas & Electric Company (U 902 M) for Authority to Continue Funding of LEV Programs.

Application 02-03-047

(Filed March 25, 2002)

Application of Southern California Edison Company (U 338-E) to Extend the Operation of its Electric Vehicle Adjustment Clause Mechanism and Related Accounts Until the Date of the Commission's Final Decision in SCE's Test Year 2003 General Rate Case Proceeding.

Application 02-03-048

(Filed March 25, 2002)

Application of Pacific Gas and Electric Company for Review of and Authorization for Recovery of Costs Relating to Its Low Emission Vehicle (LEV) Program for 2002 through 2005.

(U 39 E)

Application 02-03-049

(Filed March 25, 2002)

DECISION APPROVING FUNDING FOR LOW EMISSION VEHICLES

TABLE OF CONTENTS

Title Page

DECISION APPROVING FUNDING FOR LOW EMISSION VEHICLES 1 1

1. Summary 2 2

2. Background 4 4

A. Market for LEVs 4 4

B. History of IOU LEV Funding 5 5

C. The IOUs' Applications 9 9

1 SoCalGas/SDG&E's Applications 11 11

2 PG&E's Application 11 11

3 SCE's Application 14 14

D. Other Parties' Responses to the Applications 15 15

E. IOUs' Current Staffs and Fueling Stations 18 18

3. Discussion 20 20

A. Introduction 20 20

B Activities Allowed 22 22

1. RD&D Projects and the INEEL Project 22 22

2. Programs That Provide Information and Training to Customers and Enhance Safety 24 24

3. Programs That Enhance Reliability 24 24

C. Summary of Allowed Funding 26 26

D. Other Issues 33 33

1. Change in Funding Source 33 33

2. Utility Proposals to Incorporate LEV Programs into Other Proceedings 34 34

3 Reporting Requirements 35 35

4 Future Consideration of Discretionary LEV Programs 35 35

5. One-Way Balancing Accounts 37 37

Comments on Alternate Decision 37 37

Assignment of Proceeding 38 38

Findings of Fact 38 38

Conclusions of Law 40 40

ORDER 42 42

DECISION ON FUNDING FOR LOW EMISSION VEHICLES

1. Summary

This decision acts on applications by Southern California Gas Company (SoCalGas), San Diego Gas & Electric Company (SDG&E), Southern California Edison Company (SCE), and Pacific Gas and Electric Company (PG&E) (collectively, utilities or IOUs) for funding for the discretionary aspects of their Low Emission Vehicle (LEV) programs.

We continue to support the environmental benefits of programs designed to develop and support motor vehicles powered by electricity and natural gas. PU Code §§ 740.8, 740.3 and previous Commission decisions require that utility discretionary LEV programs should be in the ratepayers' interest, have a reasonable probability for success, avoid duplication with existing research, and maintain safety and reliability of utility services. In addition, PU Code § 451 in general, requires utilities to maintain adequate service to promote the safety, health, and comfort of the public. The ratepayer-funded LEV activities fall into three key areas. First, the IOUs share information they have gained as operators of their own LEV fleets with other actual or potential fleet owners. This information sharing is the key focus of the IOUs' "customer education" activities. Second, they evaluate new LEV products to determine their impact on the energy grids they operate. This appears to be their principal activity aimed at enhancing system reliability. Third, they provide information on safe fueling and charging techniques to third parties who use IOU-owned fueling stations and charge electric vehicles.

We approve all projects until the end of 2005. We also provide guidance as to future filings for these programs and establish procedures by which more comprehensive standards for these programs may be created. This decision allows¹:

· $2,035,000 for SoCalGas' proposed programs (annual spending);

· $5,026,000 for PG&E's proposed programs (annual spending);

· $182,179 for SCE's proposed program (annual spending); and

· $889,000 for SDG&E's proposed programs (annual spending).

We note that SCE has requested only interim funding pending the effective date of our decision in its General Rate Case (GRC). SoCalGas and SDG&E (together, the Sempra Utilities) have similarly requested only interim funding pending our decision in their next base margin proceedings. However, PG&E has requested funding of approximately 5.026 million dollars (in 2002 dollars) for its proposed 2003-2005 LEV program.

We also note that several other public agencies, including California Energy Commission (CEC) and the California Air Resources Board (CARB) support funding of IOU LEV programs in order to reduce air pollution and related health problems and to reduce our economy's dependence on petroleum and foreign oil. The Commission and the CEC have also recently adopted the Energy Action Plan, which calls for coordination by governmental agencies in their efforts to address the state's energy needs, including the use of natural gas. We therefore commit to discuss our future LEV policies with the CEC as part of the implementation of the Energy Action Plan.

¹ Tables describing allowed projects are provided in Section C, titled: "Allowed Funding."