10. Proposed Decision

The ALJ's proposed decision was issued on August 27, 2001. In matters that have gone to hearing, § 311(d) generally requires that the Commission issue its decision not sooner than 30 days after the proposed decision is filed and served. The 30-day period may be reduced or waived by the Commission in an unforeseen emergency situation or by stipulation of all parties to the proceeding.

The schedule adopted by the April 30, 2001 ACR in this proceeding provided for issuance of a proposed decision on June 21, 2001 and issuance of a Commission decision seven days later, on June 28, 2001. No objections to this shortened schedule for issuance of the Commission decision were raised at the May 10, 2001 prehearing conference or on any other occasion. While the scope and the schedule of this phase of the proceeding have been revised since the April 30 ACR was issued, parties have been on notice that we would take expeditious action to decide this matter shortly after the proposed decision is issued. Having received no notice of an objection to the contrary, we will assume that all parties have stipulated to a reduction of the statutory 30-day period pursuant to § 311(d).

In addition, we find that an unforeseen emergency situation exists, and that a reduction of the 30-day period is therefore independently justified on these grounds. As described earlier herein, DWR notified this Commission on July 23, 2001 that it had determined a revised revenue requirement that supersedes and replaces the May 2 DWR revenue requirement determination upon which the record of this proceeding was based. DWR further updated the revenue requirement by communication dated August 7, 2001. Following review of comments on the August 7 DWR update which were submitted on August 14, 2001, the ALJ determined in a ruling issued on August 15, 2001 that it was necessary to reopen the record for the purpose of taking evidence on updated calculations reflecting the latest DWR revenue requirement. SDG&E furnished the calculations in response to the ruling on August 17, 2001.

In this decision we are acting to implement rate increases that will provide necessary funding to DWR for its procurement of electricity. Notwithstanding the fact that DWR furnished us with its revenue requirement determination on August 7, 2001, and the fact that this submittal required the additional procedural steps described above, we must act expeditiously so as not to jeopardize the ability of DWR to continue in fulfilling this vital procurement role. We are also acting to implement a portion of ABX1 43, which was designated as an urgency statute "to safeguard economic viability of the communities in the San Diego region." (ABX1 43, Section 4.) Also, we act today to implement rate design principles that are intended to promote demand reduction in order to mitigate the supply and demand imbalance that could otherwise lead to greater frequency and duration of rolling blackouts throughout California. These actions are an integral part of the state's response to the electric energy crisis, and on January 17, 2001 Governor Gray Davis declared a state of emergency in connection with the crisis. These circumstances constitute an unforeseen emergency, justifying a reduction of the review and comment period with respect to the proposed decision.

Comments on the proposed decision were filed by SDG&E, FEA, City of San Diego, AreM, ORA, CFBF, PG&E, and by DWR as a non-party. Where appropriate, comments are discussed elsewhere in this opinion.