V. Assignment of Proceeding

Geoffrey F. Brown is the Assigned Commissioner and Thomas R. Pulsifer is the assigned ALJ in this proceeding.

Findings of Fact

1. DWR began buying electricity on behalf of the retail end-use customers in the service territories of the California utilities: for PG&E and SCE on January 17, 2001, and SDG&E on February 7, 2001.

2. AB 1X, together with AB 117, provides for DWR to collect revenues by applying charges to the electricity that it purchased on behalf of all retail end customers that took bundled utility service on or after February 1, 2001, in the service territories of the three major utilities.

3. Consistent with AB 1X and AB 117, retail customers that took bundled service on or after February 1, 2001, are responsible for paying a fair share of the DWR revenue requirements.

4. Certain members of the CVP preference power customers received only a portion of their power through WAPA, with the remaining power needs met through bundled PG&E utility service during periods on or after February 1, 2001, on a split-wheeling basis pursuant to contract.

5. In D.03-09-052, the Commission found that DWR did not procure power to serve the wholesale power needs of WAPA Preference Power Customers, but did bear responsibility to meet the power supply needs of PG&E's retail end users, including bundled utility service provided to split-wheeling load.

6. In D.96-11-041, the Commission previously determined 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.

7. PG&E filed the instant Petition for Modification on July 18, 2005. In its Petition for Modification, to seek confirmation that the categories of customers subject to CRS and other nobypassable charges covered in D.03-09-052 included WAPA "new allottees."

8. PG&E's definition of "new allottees," as applied in its Petition for Modification of D.03-09-052, includes (1) "Qualifying New Delivery Points" first energized after January 1, 2005, for a Contract 2948A customer that qualifies for new service under Section 10.4 of the WDT Agreement; (2) "Dual-Supply" customer load that was not under Contract 2948A, but received WAPA-supplied power for the first time on or about January 1, 2005 as part of WAPA's 2004 Power Marketing Plan; and (3) "Additional Customer Load" of a Contract 2948A customer, which was not served under Contract 2948A, but was served entirely by PG&E until January 1, 2005 (at which point the load was served under the WDT Agreement).

9. 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 requirements through Base Resource and supplemental energy transactions.

10. PG&E was aware of the Base Resource allocations given to Dual-Supply customer load well before it submitted 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.

11. Generally, the delivery points identified in Appendix C of the WDT Agreement were served by PG&E's prior January 1, 2005, because they did not qualify for service under the prior WAPA-PG&E contract (Contract 2938A). Because load at these accounts was served by PG&E prior to January 1, 2005, these customers constitute departing load responsible for CRS.

Conclusions of Law

1. As concluded in D.03-09-052, preference power customers are not subject to CRS if they took no bundled utility service from PG&E on or after February 1, 2001, and met their full contract needs through WAPA deliveries.

2. 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.

3. No CRS should apply to the "Dual-Supply" category of WAPA "new allottee" load based on the conclusion that DWR load forecasts did not include a provision for this category of load.

4. There is reasonable basis 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 to Dual-Supply customers.

5. The Commission concluded in D.03-09-052 that the provisions for imposing CRS-related costs on departing load customers as adopted in D.03-04-030 and D.03-07-030 forms a basis for applying corresponding CRS-related costs to the departing load component of preference power customers' split-wheeling load.

6. The applicability of CRS-related costs on departing load customers as adopted in D.03-04-030 and D.03-07-030 form a basis for applying corresponding CRS-related costs to the departing load component of preference power customers' "Additional Customer Load," as defined in Ordering Paragraph 3 below.

ORDER

IT IS ORDERED that:

1. The Petition for Modification of Decision 03-09-052, filed by Pacific Gas and Electric Company, is hereby granted in part and denied in part, as ordered below. The Petition is granted to the extent that it seeks authorization to collect the "Cost Responsibility Surcharge" (CRS) from "Additional New Load" as defined in Ordering Paragraph 2 below. The Petition is denied to the extent that it seeks authorization to collect a CRS from the Western Area Power Administration (WAPA) "new allottee" categories defined as "Additional Points of Delivery" and "Dual-Supply Load."

2. The following Finding of Fact 13 is added: "To the extent that preference power customers categorized as `Additional New Load' that took bundled power from PG&E on or after February 1, 2001, subsequently terminate or reduce bundled service to take electric service from WAPA or a similarly situated entity, such terminations or reductions constitutes `departing load' under the provisions of PG&E's tariff."

3. The following modification (highlighted in italics) is adopted in Conclusion of Law 2 to read: "The provisions for imposing CRS-related costs on departing load customers as adopted in D.03-04-030 and D.03-07-030 form a basis for applying corresponding CRS-related costs to the departing load component of preference power customers' split-wheeling load and Additional Customer Load" relating to the specific list of delivery points listed in Appendix C of the WDT Agreement."

4. The following modification (highlighted in italics) is adopted in Conclusion of Law 5 to read: "In order to prevent cost shifting and to impose cost responsibility in accordance with AB 1X and AB 117, split-wheeling preference power customers and `Additional Customer Load' relating to the specific list of delivery points listed in Appendix C of the WDT Agreement. must bear cost responsibility for the portion of their load that is met by bundled utility service and that subsequently is terminated after December 31, 2004.

5. The following new Ordering Paragraph (OP) 8 is added (reordering current OPs 8 and 9): "PG&E is directed to promptly file an advice letter with the appropriate amendments to its tariff to bill and collect CRS and other applicable nonbypassable charges from preference power customers consisting of `Additional Customer Load' relating to the specific list of delivery points listed in Appendix C of the WDT Agreement, that have taken bundled service from PG&E on or after February 1, 2001, and subsequently reduced or terminated such service to take electric service from WAPA or another similarly situated entity."

This order is effective today.

Dated May 11, 2006, at San Francisco, California.

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