Background
SDG&E filed this application in conformance with Assembly Bill (AB) 265 (Public Utilities Code Section 332.1(g))1 and Decision (D.) 00-09-040. The application contained, among other things, prepared direct testimony supporting the reasonableness of SDG&E's electricity procurement operations and expenses during the period July 1, 1999 through August 31, 2000. ORA initiated and participated in discovery. ORA staff members propounded, and SDG&E responded to, voluminous and substantial data requests. ORA's discovery occurred over a period exceeding four months. ORA issued its report dated April 5, 2001, which was supported by five witnesses.
On February 7, 2001, approximately two months prior to the submittal of ORA's report, the California Department of Water Resources (DWR) initiated procurement of SDG&E's "net short"2 electric power requirements thereby obviating the need for SDG&E, after that date, to procure energy for its bundled customers in excess of its utility-retained generation. During the course of ORA's discovery, ORA requested and received information on SDG&E's electric procurement activities for the period September 1, 2000 to February 7, 2001. ORA also reviewed various filings SDG&E made with the Commission providing updates on SDG&E's procurement activities during that period.
On March 26 and 27, 2001, two days of hearings were conducted before Administrative Law Judge (ALJ) Barnett. During those hearings, SDG&E's witnesses presented SDG&E's direct testimony and responded to cross-examination. Hearings on ORA's report and SDG&E's rebuttal to that report were continued until late April 2001. In preparation for its rebuttal testimony, in mid-April, 2001, SDG&E took the depositions of ORA's witnesses. Shortly thereafter settlement discussions commenced between SDG&E and ORA pertaining to the disallowances and penalties ORA recommended in its report. No other party was active in this proceeding; therefore, no other parties were included in the settlement discussions.
SDG&E and ORA, on June 15, 2001, entered into a Memorandum of Understanding (the "ORA MOU") which proposed a tentative agreement on a stipulation and settlement of SDG&E's electric procurement practices for the period July 1, 1999 through February 7, 2001. Subsequently, on July 26, 2001, SDG&E and ORA convened a settlement conference to discuss the terms of the ORA MOU and the proposed settlement agreement with all interested parties. Pursuant to Rule 51.1(b) prior notice with an opportunity to participate in the settlement conference was provided to all parties. On August 30, 2001, SDG&E and ORA executed the Settlement Agreement. The Settlement Agreement was filed with the Commission and served on all parties August 31, 2001. Pursuant to Rule 51.4 parties have 30 days in which to file comments contesting all or part of the Settlement. No party has filed comments.
1 Public Utilities Code Section 332.1(g) states: "The commission shall institute a proceeding to examine the prudence and reasonableness of the San Diego Gas and Electric Company in the procurement of wholesale energy on behalf of its customers, for a period beginning at the latest on June 1, 2000. If the commission finds that San Diego Gas and Electric Company acted imprudently or unreasonably, the commission shall issue orders that it determines to be appropriate affecting the retail rates of San Diego Gas and Electric Company customers including, but not limited to, refunds. 2 The "net short" is the amount of power that the ISO must purchase on the spot market to make up the difference between the demand scheduled and procured in the day-ahead market (either through trades, from the utility's own retained generation, or from Qualifying Facilities contract capacity).
