III. Protests

The Merced Irrigation District and Modesto Irrigation District (collectively, MID) question whether the PPAs are consistent with PG&E's long term procurement plans, and ask the Commission to examine carefully whether the costs attributable to the PPAs are reasonable since those costs are borne in part by departing load (customers choosing to leave PG&E and take power from publicly owned utilities like MID). MID asked that at the very least, the issue of whether certain charges are recoverable be deferred to the Commission's procurement proceeding.

At the prehearing conference (PHC), the ALJ asked MID to furnish further information on the non-bypassable charge issue. On December 15, 2006, MID submitted information regarding three resolutions signed by the Commission at its December 14, 2006 business meeting. In those resolutions, E-4046, E-4047 and E-4055, the Commission approved power purchase and resource adequacy agreements, but found (with minor wording variations) that "PG&E's request for approval of a non-bypassable charge as a mechanism to recover stranded costs is not addressed in this resolution. However, PG&E may seek this approval in the Long Term Procurement Plan proceeding, R.06-02-013."

PG&E's counsel agreed at the PHC that it is appropriate to defer cost allocation issues to a more generic proceeding: "I don't think you need to decide the cost allocation issue here. I think your order simply says you may recover these in rates and we'll decide how that recovery takes place in another proceeding."⁴ Thus, we include the language from the foregoing resolutions in this decision.

⁴ PHC Transcript 16:19-22 (PG&E/Kurz).