ALJ/BDP/avs Mailed 10/23/2006

Decision 06-10-044 October 19, 2006

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Application of Pacific Gas and Electric Company for Recovery of Franchise Fee Remittances Associated with Revenues for Repayment of the Rate Reduction Bonds. (U 39 E)

Application 05-09-009 (Filed September 8, 2005)

OPINION ON RECOVERY OF FRANCHISE FEES

Summary

This decision grants the request of Pacific Gas and Electric Company (PG&E) that it be allowed to recover in rates the cost of franchise fees it pays to cities and counties in conjunction with the revenues it collects to repay Rate Reduction Bonds (RRBs), authorized by Decision (D.) 97-09-055.

Currently, PG&E does not recover the cost of franchise fees paid to local governments in conjunction with RRB revenues it collects and forwards to the bond holders. According to PG&E, it failed to include the necessary ratemaking mechanisms in the tariffs it filed to implement D.97-09-055. PG&E now seeks to correct this oversight and requests recovery, on a prospective basis, of the associated franchise fee costs, about $2 million per year, through an entry in its tariff Preliminary Statement Part CZ - Distribution Revenue Adjustment Mechanism (DRAM). Today's decision authorizes PG&E to modify the Preliminary Statement in its tariffs to allow recovery of these costs on a prospective basis. This proceeding is closed.