Monitoring and Evaluation Stipulation

SDG&E and UCAN each submitted recommendations concerning measurement and evaluation of the proposed distribution PBR mechanism. Because the cost of service settlement adopted in D.98-12-038 includes a cost of service review in 2002, these parties were able to reach stipulation on measurement and evaluation issues.

The stipulation proposes that by February 15 of each year, SDG&E will file an annual electric distribution report that addresses the performance indicators and earnings sharing results for the previous calendar year. This report will be filed by advice letter with the Commission's Energy Division. Within 45 days after the end of each calendar quarter, SDG&E will submit quarterly reports to the Energy Division and interested parties that address the 12 months-to-date sharing and year-to-date performance indicator results. SDG&E and UCAN believe that a cost of service review in 2002 precludes the necessity for a comprehensive review. Future evaluative reports will be determined in those cost of service proceedings.

SDG&E and UCAN recommend that performance over the 1999-2001 time frame be reviewed in a timely fashion so that this analysis can be incorporated into the 2002 cost of service proceeding. These parties suggest that the evaluation process begin early in 2001 with a workshop facilitated by the Energy Division. The goals of this workshop would be to develop appropriate evaluative criteria for the review, establish whether an independent review is necessary, and, if so, how it should be conducted.

SDG&E and UCAN suggest that an independent evaluation may be necessary if the Energy Division and ORA indicate that they cannot conduct a timely and comprehensive evaluation of the PBR mechanism. According to the stipulation, the parties would select the independent consultant using a Request for Proposal (RFP) process not to exceed $400,000. SDG&E and UCAN suggest that the cost of this consultant be shared equally between the ratepayers and shareholders. If parties can't agree on a consultant, the Energy Division would select the consultant based on nominations from the parties. The consultant would enter into a contract with SDG&E, approved by the Energy Division. SDG&E would be able to submit its own evaluative report at the same time other parties or the independent consultant submit their reports.

SDG&E and UCAN suggest that the goals of this PBR mechanism should be articulated in this decision and evaluation of the mechanism should be based on these goals.