Comments on Draft Decision

The draft decision of the administrative law judge (ALJ) in this matter was mailed to the parties in accordance with Section 311(g)(1) of the Public Utilities Code and Rule 77.7 of the Rules of Practice and Procedure. Comments were filed on June 28, 2004 from nine parties. Reply comments were filed on July 6, 2004. The comments are summarized in the following areas.

Expanding the Scope of the Rulemaking

Edison, Verizon California Inc. (Verizon) and SDG&E/Southern California Gas Company (SoCalGas) oppose expanding the scope of the rulemaking asserting that no legal or factual data was shown and the record in this proceeding does not support expanding its scope. SDG&E/SoCalGas further questioned whether reporting holding company executive compensation would be an unauthorized extension of Commission jurisdiction. Any legal or factual arguments in these areas, as recognized by PG&E in its reply comments, will be best addressed through the filing of further comments and replies, as outlined in this decision.

Increase Thresholds for Reporting Annual Compensation

SDG&E supports a reporting threshold of $200,000, stating $125,000 is unnecessarily low and requires utilities to report on an overly broad segment of employees, and that other proxy data is available for ratemaking purposes. For 2003, SDG&E showed it had 237 employees at the $125,000 level and 35 employees at the $200,000 level. SDG&E reports that raising the threshold in 1986 from $50,000 to $75,000 similarly lowered the number of reporting employees from 209 to 35.

Citizens et al. (Citizens), Calaveras et al. (Calaveras), and SureWest support raising the thresholds to $150,000 for large utilities and $120,000 for others. These parties provided data showing that annual wages increased approximately 5% per year since 1986 (90% through 2004) and stated that with no automatic adjustments, an increase of 100% is reasonable.

The proposed reporting thresholds of $125,000 and $85,000 are reasonable and necessary to allow all parties access to adequate data for ratemaking process. Increasing the proposed thresholds would lead to fewer and less cumbersome reporting requirements, but would also overly restrict easy access to the data.

Clarify Expanded Scope Issues Only Apply to Tier 1 Utilities

As requested by Citizens, Calaveras and SureWest, the draft decision further clarifies that the two issues in the expanded scope only apply to Tier 1 utilities.

Periodic/Automatic Adjustments to Reporting Thresholds

Citizens, Calaveras and SureWest commented that automatic adjustments of some kind would lessen the need for future formal action by the Commission. However, for the reasons stated in this order, no automatic adjustments to the reporting thresholds are ordered.

GO 77-L to Identify Utilities Exempt from the Reporting Requirements

As requested by the Competitive Carriers, GO 77-L identifies those utilities and utility classes exempt from the provisions of the general order.

Evidentiary Hearings

G/LIF requested evidentiary hearings be held in light of possible opposition to expanding the scope of the rulemaking. PG&E, Citizens, Calaveras and SureWest oppose holding hearings. The scope of the rulemaking is expanded, as described in this order, and the issues in this proceeding can be fully addressed without an evidentiary hearing.

Other nonsubstantive changes were made to the draft decision to clarify positions of the parties. All other comments involve issues that are outside the scope of the rulemaking or have already been decided.