Offramps
SDG&E proposes to retain the offramps existing in its base rate PBR mechanism. There is a voluntary offramp at 150 basis points below the authorized rate of return and a mandatory review of the mechanism if SDG&E's actual rate of return varies by 300 basis points from the authorized rate of return.
SDG&E does not propose a new mechanism to update for changes in the cost of capital. SDG&E's current cost of capital mechanism, the MICAM, is proposed to continue unless changed by the cost of capital proceeding which is to be filed in May 1998.10 The results of that proceeding will be incorporated into the 1999 starting point rates. Changes resulting from the MICAM or any subsequent mechanism will be incorporated in future annual indexing changes.
10 SDG&E's cost of capital application was filed in May 1998. A decision in that proceeding is expected in the Spring of 1999.
