III. Discussion

A. Summary

We conclude that with the submission the rounds of pleadings summarized above, the record is complete as a basis to issue a decision on PG&E's Petition.

We are not persuaded that D.03-09-052 should be amended based merely on PG&E's belief that the Commission unintentionally omitted a reference to "new allottees" from ordering paragraphs of D.03-09-052. The status of "new allottees" was not sufficiently developed in D.03-09-052 as a basis to make definitive findings and orders concerning the applicability of CRS to them. Moreover, it was not clear even when PG&E filed its Petition as to what customer categories PG&E specifically intended to cover under the term "new allottee." Based upon the further development of the record through pleadings filed relating to PG&E's Petition for Modification, we now have a sufficient record to define specific customer categories covered under the term WAPA "new allottees," and to determine the extent, if any, that such customers are subject to CRS.

As discussed below, we conclude that CRS should apply only to the limited category of "Additional Customer Load," as defined below, but should not apply to other categories of WAPA "new allottee" load. We decline to adopt PG&E's compromise proposal limiting the CRS exclusion only to 10 MW.

To the extent that the Commission grants an exemption for "new allottees," PG&E asks that the exemption only apply to the DWR power charge, but not to other CRS components. In D.03-09-052, however, we ordered that split-wheeling preference power customers bear no responsibility for any component of the CRS for electric loads that fall within the customer's contract rate of delivery (CRD) in the manner contemplated under the existing provisions of Contract 2948A. Consistent with that determination, we conclude that "new allottees" exempt from the DWR power charge should bear no responsibility for any component of the CRS.

We set forth our conclusions as to the applicability of CRS for each of the categories of "new allottees" as discussed below.

B. Qualifying New Delivery Points

We conclude that "new allottee" load categorized as Qualifying New Delivery Points should not be subject to a CRS, consistent with the principles in D.03-09-052. We stated in D.03-09-052 that customers receiving increased allocations of federal preference power under Contract 2948 would not be classified as departing load under PG&E's tariff to the extent such increased power was allocated in a manner contemplated under that existing contract. Accordingly, categorical exemption from the CRS was extended to those preference power "full requirements" customers.

Contract 2948A expressly authorized WAPA to have the exclusive right and obligation to serve Qualifying New Delivery Points. The WDT Agreement expressly carried forward the preexisting provision of Contract 2948A regarding service to Qualifying New Delivery Points. Under the WDT Agreement, Qualifying New Delivery Points will receive full power requirement through Base Resource and supplemental energy transactions. Therefore, we conclude that no CRS should apply to Qualifying New Delivery Points since this load's eligibility for full preference power service was expressly authorized under Contract 2948A, and continues to be provided pursuant to the current WDT Agreement. Exclusion of Qualifying New Delivery Points from the CRS under the current WDT Agreement is consistent with the prior exclusion under the provisions of Contract 2948A.

In his Declaration, Robertson claims that although the parties to the WDT Agreement set forth various reservations anticipating PG&E's action to apply for Commission determination of CRS applicability for Dual Supply and Additional Customer Load categories, the parties expressed no intent nor reserved any rights regarding New Points of Delivery. Robertson argues that excluding New Points of Delivery from CRS is therefore consistent with the terms of parties' settlement of litigation before FERC that resulted in the WDT Agreement.

PG&E disagrees with this claim that there was no express reservation of rights to CRS for "Qualifying New Delivery Points." PG&E references Section 11, pp. 6-7 of the WDT SA which expressly reserves PG&E's right to seek CRS from New Allottees. This section states: "By agreeing to provide Distribution Service under this Distribution Tariff...the Distribution Provider reserves the right to collect Departing Load Charges from Western customers that may be required to pay such charges. Departing Load Charges shall be collected in the event that a competent regulatory agency or legislative body determines that it is appropriate to promulgate regulations or legislation which entitle the Distribution Provider to collect such charges from the Western customers and similarly situated customers."

Our disposition of this issue does not conflict with any express reservation of rights under the WDT Agreement with respect to the applicability of CRS to Qualifying New Delivery Points. The language cited by PG&E concerning its reservation of rights merely entitles PG&E to collect CRS if the governing regulatory body were to decide in PG&E's favor on this issue. We have concluded, however, that CRS does not apply to this component, and therefore, PG&E is not entitled to collect CRS for Qualifying New Delivery Points.

C. Dual-Supply Customer Load

We conclude that WAPA "new allottees" under the category of Dual-Supply Customer Load should also be excluded from the CRS based on evidence that the forecasts relied upon by DWR excluded this source of load. PG&E admits that it was aware of the Base Resource allocations given to Dual-Supply customer load well before submitting its forecast to DWR in February 2001. Even earlier, numerous WAPA-sponsored meetings occurred that were attended by PG&E representatives, and various public announcements were made on the 2004 Power Marketing Plan. The existence of the Base Resource allocations (including allocations related to Dual-Supply customers) was public knowledge as early as the year 2000. As noted in D.03-09-052: "Prior to December 31, 2000, all preference power customers had committed to the WAPA Post-2004 Plan by executing individual base resource contracts." (D.03-09-052 at 12.)

As support for its claim that the forecast relied upon by DWR incorporated Dual-Supply customer load, PG&E provided the Declaration of Mr. Masters, in which he states that he is "not aware of any evidence that PG&E adjusted its sales forecast provide to [DWR] to reflect the loss of New Allottee load." Yet, even though PG&E did not make an explicit adjustment in this manner, the evidence cited by PWRPA indicates that the overall WAPA end-use load adjustments attributable to serving its preference power customers under Contract 2948A were already embedded within the forecast provided to DWR. Because PG&E's load forecasting methodology employs regression analysis, the effects of such regression analysis would automatically exclude load that was served at the time by WAPA. In its forecast covering the period 2004 through 2010, DWR performed a calculation to extend PG&E's sales forecast information using FERC Form 714 data. PG&E acknowledges, however, that WAPA's sales to preference power customers were not included in PG&E's FERC 714 filing in February 2001. Accordingly, sales forecasts relied upon by DWR in its power purchases excluded WAPA's overall sales to end-use preference power customers under Contract 2948A.⁸

WAPA's sales to preference power customers under the post-2004 arrangements are significantly less than overall sales to preference power customers under Contract 2948A. In addition, WAPA's allocations of Base Resource to Dual-Supply customers came from a "Resource Pool" created by withholding a percentage of the renewal allocations made to pre-2005 WAPA customers (i.e., all WAPA customers who received power under Contract 2948A). Based on these facts, we find it reasonable to conclude that the DWR forecast excluded an overall estimate of WAPA-served end-use preference power load that is sufficient to accommodate all post-2004 end-use preference power deliveries, including those to Dual-Supply customers.

D. Additional Customer Load

We conclude that the CRS should apply to the category of "new allottees" identified by PG&E as "Additional Customer Load." This category of load encompasses the specific list of delivery points of Pooling Authority participants listed in Appendix C of the WDT Agreement. In Appendix C (Paragraph 6), the Pooling Authority agreed to "abide by any determination" of the Commission for departing load charges, cost responsibility surcharges, and other forms of stranded costs attributable to service to Additional Customer Load. PG&E states that generally, the delivery points identified in Appendix C were served by PG&E prior January 1, 2005, because they did not qualify for service under the prior WAPA-PG&E contract (Contract 2948A). Because load at these accounts was served by PG&E prior to January 1, 2005, PG&E argues that these customers constitute departing load that should pay CRS.

PWRPA does not argue that all Additional Customer Load can necessarily qualify for exemption from CRS, but does argue that Additional Customer Load be granted eligibility to apply for any unused CRS exemptions attributable to PG&E's exclusion from its forecasts of WAPA's overall sales to end-use preference power customers. PWRPA is unclear as to whether WAPA may be defined as a "publicly owned utility" for purposes of qualifying for CRS exemptions available to Municipal Departing Load pursuant to D.04-11-014 and D.04-12-059. To the extent that WAPA is so defined, however, PWRPA argues that Additional Customer Load should be eligible to apply for any unused exemptions available under those decisions.

We conclude that PG&E has made a reasonable argument to support charging CRS to "Additional Customer Load," defined by the specific list of delivery points of Pooling Authority participants identified in Appendix C of the WDT Agreement. We shall therefore require that such customers be held responsible for CRS and that no CRS exemptions be applied to them. Based on the fact that these load accounts were served by PG&E prior January 1, 2005, it is reasonable to conclude that this load was included within the DWR forecast that provided the basis for its contractual procurements.

PWRPA has not provided evidence to indicate that the "Additional Customer Load" category was excluded from DWR forecasts. Accordingly, we shall grant PG&E's request to apply a CRS to the "Additional Customer Load" component of WAPA "new allottees," as defined above.

⁸ See Stuart Robertson Declaration, pp. 10-12, dated December 22, 2005, particularly footnotes 30-37.