STATE OF CALIFORNIA GRAY DAVIS, Governor

PUBLIC UTILITIES COMMISSION

505 VAN NESS AVENUE

SAN FRANCISCO, CA 94102-3298

August 5, 2003 Agenda ID #2562

Ratesetting

TO: PARTIES OF RECORD IN RULEMAKING 92-03-050

This is the draft decision of Administrative Law Judge (ALJ) Patrick. It will not appear on the Commission's agenda for at least 30 days after the date it is mailed. The Commission may act then, or it may postpone action until later.

When the Commission acts on the draft decision, it may adopt all or part of it as written, amend or modify it, or set it aside and prepare its own decision. Only when the Commission acts does the decision become binding on the parties.

Parties to the proceeding may file comments on the draft decision as provided in Article 19 of the Commission's "Rules of Practice and Procedure." These rules are accessible on the Commission's website at http://www.cpuc.ca.gov. Pursuant to Rule 77.3 opening comments shall not exceed 15 pages. Finally, comments must be served separately on the ALJ and the assigned Commissioner, and for that purpose I suggest hand delivery, overnight mail, or other expeditious method of service.

/s/ ANGELA K. MINKIN

Angela K. Minkin, Chief

Administrative Law Judge

ANG:sid

Attachment

ALJ/BDP/sid DRAFT Agenda ID #2562

Ratesetting

Decision DRAFT DECISION OF ALJ PATRICK (Mailed 8/5/2003)

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Order Instituting Rulemaking on the Commission's Own Motion to Consider the Line Extension Rules of Electric and Gas Utilities.

Rulemaking 92-03-050 (Filed March 31, 1992)

OPINION ON PETITION FOR CLARIFICATION

OF DECISION (D.) 03-03-032

I. Summary

In response to Pacific Gas and Electric Company's (PG&E) petition for clarification of D.03-03-032 regarding applicant-installed line extension projects, the Commission concludes as follows:

1. The requirement that utilities book the "lower of" the utility's estimated costs or the applicant's actual costs applies only to the refundable portion of the project costs, not to the applicant's total project costs.

2. When booking the applicant's "actual costs," the utilities should use the costs set forth in applicant's third-party contract at the commencement of the project.

3. For purposes of calculating refunds, inspection costs should be fixed at the outset and not be subject to reconciliation on completion of the project.

This proceeding remains open to address the application for rehearing of D.03-03-032 filed by Utility Services Group.