II. Summary

This decision addresses the application of Pacific Gas and Electric Company (PG&E) for the adoption of a 1-day-in-10-year peak day planning standard, and to add reasonably priced incremental storage capacity sufficient to meet the planning standard, for its core natural gas customers. In Decision (D.) 04-09-022, the Commission directed PG&E to file the application to address how third-party storage providers can be used to assist PG&E in providing core storage services.

We adopt PG&E's proposal for a 1-day-in-10-year planning standard for PG&E's core customers. Given the growth in core load, and the need to reduce our reliance on diverting noncore gas as a result of the changes that have occurred with respect to electric generation, this new planning standard is appropriate.

As a result of this new planning standard, PG&E is authorized to acquire the additional storage capacity that it needs to meet this standard from third-party storage providers. PG&E shall follow the procedures set forth in Exhibit 20, attached to this decision as Appendix A, for soliciting and evaluating the bids to provide the incremental storage capacity. As a result of the adoption of the planning standard, and the acquisition of the additional storage capacity, we anticipate that the average residential customer's monthly bill will increase about 8 to 40 cents, depending on the cost of the final incremental storage inventory level that is acquired.

We do not adopt PG&E's proposed credit policies for use in evaluating the creditworthiness of the independent storage providers who may bid on the incremental storage capacity. Instead, PG&E shall take the necessary steps to have third parties evaluate the financial ability and insurance coverage of the independent storage providers, and to use the criteria discussed in this decision to assess the storage providers' ability to provide storage services.