II. Background
This Commission has previously established allocations for the DWR revenue requirement for 2001-2002 (see, D.02-02-052), and for 2003 (see, D.02-12-045). For 2004, on an interim basis, we have continued to use the 2003 allocation methodology. (D.04-01-028, as modified by D.04-02-028, and D.04-08-050.) In this proceeding, we are adopting an allocation methodology applicable to the remaining term of the DWR power purchase contracts.
Based upon DWR's original 2004 revenue requirement determination, the parties litigated the methodology to be used for the permanent allocation. Opening and reply testimony was submitted by PG&E, SCE, SDG&E, ORA, and DWR, evidentiary hearings were held, and opening and reply briefs were filed by the three utilities.3 Subsequent to the submission of briefs, DWR submitted a supplemental determination, modifying its revenue requirement for 2004. 4 Pursuant to an ALJ Ruling, the parties submitted comments addressing the supplemental determination. D.04-08-050 allocated the 2004 revenue requirement of DWR as modified by the supplemental determination.5
On April 22, 2004, PG&E, SCE and TURN (collectively, the "settling parties") submitted a motion for leave to submit their proposed settlement agreement. Parties submitted comments and reply comments on the proposed settlement, along with related procedural motions. SDG&E consistently and vociferously opposed the proposed settlement, while ORA generally supported it. The assigned ALJ allowed for submission of the proposed settlement, granted SDG&E's request for evidentiary hearings, and ordered the settling parties to present witnesses for cross-examination. Evidentiary hearings on the proposed settlement were held on June 14 and 15, 2004, with parties submitting opening briefs on the proposed settlement on June 25, 2004, and reply briefs on July 2, 2004.
In December, 2004, the Commission adopted D.04-12-014 which purported to adopt a permanent allocation methodology. However, SDG&E filed for rehearing of that decision, and by D.05-01-036, partial rehearing was granted on a limited set of issues. In addition to its application for rehearing, SDG&E also filed a petition for modification of D.04-12-014.
3 ORA submitted only an opening brief, and DWR submitted a memo concurrently with the parties' reply briefs.
4 The effective submission date of the supplemental determination was April 22, 2004. (See, DWR Letter Memorandum dated May 17, 2004.)
5 One difference between the two is that they are based on different modeling runs. The original revenue requirement determination was based on Prosym Run 43, while the supplemental determination is based on Prosym Run 45. The allocation adopted today is based on Prosym Run 45, as reflected in Appendix A.
