Discussion

The last BCAP decision, D.00-04-060 adopted a Joint Recommendation of settling parties which provides SoCalGas with 75/25 (ratepayer/shareholder) balancing account protection for noncore throughput revenue risk. D.00-04-060 was to be in effect through the end of the BCAP period December 2002, Finding of Fact #10. On April 23, 2002, the ALJ's Ruling Granting the Motion of the ORA to Defer the BCAP Proceedings for 12 Months was issued. In this ALJ Ruling, SoCalGas was instructed to refile its BCAP Application on March 7, 2003. With this deferred filing date, it is realistic to anticipate that a final decision may not be rendered until late 2004.

The CSA, adopted in the GIR, D.01-12-018, places SoCalGas 100 percent at-risk for recovery of unbundled backbone transmission and storage costs, and specifies that the Commission will review SoCalGas' risk for local transmission revenues in the next BCAP case. ORA's argument that excluding the costs unbundled by the CSA, the current balancing accounts provide revenue protection for 97.5% of the base revenue, presents difficulty at this time, since the GIR decision has yet to be implemented. Watson's comments on the impact of the GIR decision on unbundled backbone transmission and storage costs present the same dilemma. Watson's argument that guaranteeing SoCalGas recovery of its revenues in the noncore market, removes any incentive for the utility to reduce its costs in order to keep its service to electric generators competitive with comparable costs of generators located elsewhere, is better advanced in the BCAP where all parties have an opportunity to respond.

Parties agree that during 2001, actual noncore throughput transcended the BCAP adopted forecast greatly. SoCalGas' forecast for the years 2003 and 2004 may be low or high. SoCalGas did not support the delay of the BCAP proceeding. Granting SoCalGas the 100 percent balancing account protection does not require any change in revenue requirements and will not require a change in rates except if required to amortize an over or undercollection in a regulatory balancing account.

For these reasons, we shall allow SoCalGas 100 percent balancing account protection for noncore throughput revenue risk during the period of BCAP delay, from January 1, 2003 until the new BCAP rates go into effect. This 100 percent balancing treatment shall not set a precedent for or against whatever the Commission shall adopt in the next BCAP.

EGA questions why balancing accounts are undercollected at this time and asks the Commission to keep this proceeding open for the purpose of allowing parties to conduct discovery on the basis for any proposed rate changes related to the balancing accounts. We find this request to be impractical. The BCAP proceeding was deferred because of staffing constraints of ORA. Continuing discovery now on a proceeding which will require a new Application in March, 2003 and which will undoubtedly incorporate many changes between now and then defeats the purpose of delaying the BCAP. A balancing account is just that. It protects ratepayers and/or shareholders at the adopted formula. Any over-recovery or under-recovery of revenue is amortized back into rates. SoCalGas files an Advice Letter each October, which updates the balancing accounts to be amortized into rates on January 1, of the following year. EGA will have ample opportunity to examine that advice letter and protest balancing account amounts at that time should they deem it necessary.