16. Comments on Proposed Decision

The proposed decision of ALJ Bruce DeBerry in this matter was mailed to the parties in accordance with Pub. Util. Code Section 311(g) and Rule 77.1 of the Rules of Practice and Procedure. Comments were received from Southwest, ORA and San Bernardino.⁸⁷

We have carefully considered the comments on the issues addressed in today's decision. In response to comments, we have modified the draft decision to spread the pipeline replacement program over five-years, rather than four-years, in Southern California. We have also adopted an attrition year pipeline adjustment mechanism recommended by San Bernardino. We believe the five-year period for pipeline replacement provides for an adequate accelerated replacement program, while mitigating rate effects on customers. We have also adopted a pipeline replacement attrition year mechanism based on actual pipeline replacement. Although the draft decision proposed pipeline attrition allowance reductions at an absolute level, we will adopt a mechanism that reflects actual installed pipeline in the year proceeding the attrition year. This mechanism, recommended by San Bernardino, will not unreasonably penalize Southwest as a result of minor deficiencies in its pipeline replacement program, and reflects actual pipeline replacement progress.

In response to San Bernardino, although we did not adopt a disallowance for 2000-2001 gas procurement contracts, we have offered Southwest an opportunity to establish a GCIM. The GCIM is intended to provide Southwest an incentive to reduce gas costs to the benefit of both ratepayers and shareholders.

In response to ORA we have modified the decision to exclude only the revenue shortfall from special contracts in the revenue balancing account, and modified our requirement for a PBOPs audit in the next GRC.

In response to Southwest, we will not phase-in the adopted 2003 revenue requirement for Southern California, a position also supported by ORA in its opening brief.

Finally, we note that although all of the contributions of San Bernardino to this decision may not be expressly stated, we have significantly benefited from San Bernardino's participation, particularly in our adoption of recommendations for a pipeline replacement program, a pipeline attrition mechanism, and the GCIM. We thank San Bernardino for its participation in this proceeding, and its contributions to our adopted decision.