ORA's Reply to SoCalGas'
Balancing Account Proposal

On April 9, 2002, ORA replied to the responses to its motion to suspend. In its Reply, ORA argues that the current level of balancing account protection adequately protects SoCalGas from the risks associated with throughput variation. ORA reasons that since noncore local and distribution costs represent only 10 percent of the total revenue requirement, and 75 percent of that amount is protected by the balancing account, the risk to shareholders is negligible. ORA states that excluding costs unbundled by the GIR, provides current core and noncore balancing accounts revenue protection for 97.5 percent of the base revenue requirement. While ORA agrees that there is tremendous uncertainty associated with forecasting EG throughput, it notes that SoCalGas was not "clamoring" for 100 percent balancing account protection when EG throughput was exceeding the adopted forecast in 2000 and 2001. In summary, ORA states that if the Commission does provide SoCalGas with 100 percent balancing account protection, it should not take effect before June 1, 2003. ORA believes this date is more realistic than January 1, 2003 for a BCAP decision to be approved, if the BCAP were processed under the schedule in effect on April 9, 2002.