5. Agreement on Natural Gas Vehicle Rates

Clean Energy opposed the natural gas vehicle compression rates PG&E proposed in this proceeding, arguing that they are inappropriately based on marginal costs rather than fully allocated costs. Clean Energy provides natural gas vehicle fueling services and alleges it cannot compete with PG&E in this market because it believes PG&E's compression rates are effectively subsidized.

After hearings were completed, Clean Energy and PG&E settled the Natural Gas Vehicle (NGV) compression rate issues and filed a settlement on March 17, 2005. The settlement agreement would increase PG&E's compression rate for compressed natural gas (CNG) vehicles to recognize allocated costs. The rate would increase by $0.15 on the implementation date of this BCAP, and escalate by $0.03 per year beginning January 1, 2006 and each year thereafter until new BCAP rates are put into effect. It also calls for the rate for customer premises compression services to be fully deaveraged from the rates of other customers upon implementation of this BCAP. The settlement also requires PG&E to update its study of the cost to provide compression service for CNG vehicles for review in PG&E's next BCAP. The changes to the compression charges and the deaveraging of core experimental uncompressed NGV1 service will increase costs allocated to other customers of $337,000 - about a 0.01% increase (one one-hundredth of a percent), or about one penny on an average residential customer's bill.

The settlement is a reasonable compromise that accommodates both parties' competing concerns at a small cost to other ratepayers, and provides the means to update the compression cost study and rate in the next BCAP.