3. Procedural History
Under the tariff PG&E is required to inform the Executive Director of the CPUC by letter within 30 days of a catastrophic event that PG&E has started booking costs in the CEMA. On August 21, 2006, the utility notified the Commission's Executive Director that it was recording costs in its CEMA in response to the hot weather experienced starting in mid-July 2006. (Ex. PG&E-2, pp. 1-3 - 1-5.) On September 12, 2006, the Executive Director responded to PG&E's letter and stated that according to PG&E's current CEMA tariff "the purpose of the CEMA is to recover the costs associated with the restoration of service and PG&E facilities affected by a catastrophic event declared a disaster or emergency by competent federal or state authorities." (Emphasis added in the letter.) (Ex. PG&E-5, p. 1, footnote 1.)
The Executive Director's letter also said that "PG&E's current tariff does not authorize recovery of such costs unless there has been a formal disaster declaration by the Governor or a competent federal authority."7, 8 (Ex. PG&E-5, p. 1.) While this interpretation of the tariff is technically inaccurate, the Executive Director was correct that previous CEMA claims had been accompanied by a declaration by the Governor or a competent federal authority. PG&E's claim related to the July 2006 heat was the first case in which a utility requested CEMA treatment for an event that was not declared an emergency by the Governor or President.
PG&E filed this application on November 13, 2006 requesting recovery of costs recorded in the CEMA for two events-the 2005-2006 New Year's Storm and the July 2006 Heat Storm. At the January 4, 2007 prehearing conference, the Administrative Law Judge (ALJ) indicated that he found the application was unclear on the basis for PG&E's request to recover costs for the hot weather in July 2006 as a catastrophic event, pursuant to PG&E's tariff (Ex. PG&E-2, pp. 1-2) and Resolution E-3238 (Ex. 4). PG&E provided an explanation of its justification.9 After consultation with the assigned Commissioner, an ALJ ruling was issued on January 17, 2007 finding that based upon the preliminary review of the application, supporting exhibits, and the prehearing conference statements and transcript, PG&E had not proven its case and did not appear likely to demonstrate that the hot weather in July 2006 was an eligible catastrophic event.10 Nevertheless, the ruling provided for a further round of argument. Pursuant to the ruling, PG&E filed further argument on January 31, 2007 and on February 9, 2007, the Division of Ratepayer Advocates (DRA), The Utility Reform Network (TURN), and Southern California Edison Company (Edison) filed replies.11
7 The tariff language actually refers to a declaration "by competent federal or state authorities."
8 Subsequent to PG&E sending its notification letter to the Executive Director, the U.S. Department of Agriculture (USDA) and the U.S. Small Business Association (SBA) issued disaster declarations related to unusual heat in July 2006.
9 TR. pp. 8 - 11.
10 See Cal. Evid. Code § 500: Except as otherwise provided by law, a party has the burden of proof as to each fact the existence or nonexistence of which is essential to the claim for relief or defense that he is asserting.
11 Notice of the application appeared in the Commission's Daily Calendar on November 16, 2006. The Commission preliminarily categorized it as ratesetting in Resolution ALJ 176-3183, dated November 30, 2006 and also determined that hearings were necessary. DRA and TURN filed timely protests on December 18, 2006. PG&E replied timely on January 2, 2007. By a ruling dated December 1, 2006, PG&E was directed to serve copies of any and all documentation that support the assertion of government-declared disasters relating to the 2005-2006 New Year's Storms and the July 2006 Heat Storm. In response to the ALJ's telephone request, PG&E served the relevant volume of workpapers on November 30, 2006 before service of the ruling. (Ex. PG&E-2.)
