13. Backbone-Only Electric Main Line Extensions

PG&E describes its proposal for backbone-only electric main line extensions as follows:

For backbone-only electric main line extension jobs, where no services are added by the developer, PG&E would not apply any allowance but rather, calculate a project-specific new load incentive. Under this situation, the developer would be required to sign an agreement ensuring that new services in the development would be connected to PG&E's distribution system for the period of years required to justify the new load incentive. In no case would the period of years to justify the new load incentive exceed five years. The project-specific backbone new load incentive would be adjusted, as necessary, to ensure that the revenue to be gained from the development exceeds the marginal cost of providing service to the development.¹⁹

13.1. Discussion

The backbone-only services would have no specific new load associated with them. Instead, the developer would have to sign an agreement that new services would have to be connected within five years and would have to justify the incentive within the same five years. Since the developer in this instance would not be adding new services, it is unclear how PG&E could determine whether the developer would be able to meet its commitment or how the reasonableness of the incentive could be evaluated. It is also unclear whether the applicant's commitment means that the new load would have to be sufficient to pay for the incentives within the first five years or that sufficient new load would be connected within five years to provide a positive CTM over a 30-year period. Overall, PG&E has not explained how this incentive would work in sufficient detail for us to evaluate. Therefore, PG&E has not demonstrated that provision of incentives for backbone-only services is reasonable.

¹⁹ Exhibit PG&E-1, pages 1-16 and 1-17.