Discussion of Settlement on Performance Indicators

This is an "uncontested settlement" as defined in Rule 51(f), i.e., a settlement that "...is not contested by any party to the proceeding within the comment period after service of the stipulation or settlement on all parties to the proceeding." Rule 51.1(e) requires that settlement agreements must be reasonable in light of the whole record, consistent with the law, and in the public interest.

D.92-12-019 considered a settlement of the SDG&E 1993 General Rate Case. In that decision, the Commission outlined four criteria that must be satisfied in order for the Commission to approve an all-party settlement. The proposed settlement must specify:

"a. that it commands the unanimous sponsorship of all active parties to the instant proceeding;


"b. that the sponsoring parties are fairly reflective of the affected interests;


"c. that no term of the settlement contravenes statutory provisions or prior commission decisions; ...and


"d. that the settlement conveys to the commission sufficient information to discharge our future regulatory obligations with respect to the parties and their interests." (D.92-12-019, 46 CPUC2d 538, 500-551 (1992).)

We are satisfied that the proposed settlement commands the sponsorship of all active parties sponsoring testimony on performance indicators. The sponsoring parties reflect a broad spectrum of affected interests. ORA represents ratepayers in general, while UCAN represents residential and small commercial ratepayers in particular. Large customers, governmental interests, and agricultural customers are represented by FEA, City of San Diego, and Farm Bureau. CCUE represents the interests of utility employees in reliability and safety issues. NRDC considers the effects of such determinations upon the environment and SDG&E obviously considers the impact of the settlement on its shareholders. Considering the thorough review of SDG&E's proposals and the broad spectrum of interests supporting the proposed settlement, we are satisfied that sponsoring parties fairly reflect the affected interests.

The settlement is reasonable in light of the whole record and does not contravene any statute or prior Commission decision. SDG&E submitted extensive testimony and workpapers supporting its recommended revenue requirement increases. Similarly, ORA and UCAN conducted thorough investigations and analysis of SDG&E's request and developed their own recommendations. FEA, CCUE, and NRDC also submitted testimony addressing performance indicators.

Thus, the extensive testimony served by the settling parties provides sufficient information to the Commission to properly judge the reasonableness of the settlement and to discharge its future regulatory responsibilities. Parties have included a comparison exhibit, pursuant to Rule 51.1(c), which allows us to compare original positions to the proposed settlement amounts. The settlement is the result of the parties compromising and reaching agreement on their widely divergent positions, resulting in agreement on performance indicators related to safety, reliability, customer satisfaction, call center responsiveness, and service guarantees related to missed appointments and new installations.

SDG&E can earn or lose a maximum of $14.5 million from the rewards and penalties associated with performance indicators. We are satisfied that this settlement is in the public interest and avoids costly litigation on these issues. We will make specific findings related to the proposed reporting requirements, which we discuss in the section addressing timing of reports, term of the PBR mechanism, and comprehensive reviews.