STATE OF CALIFORNIA ARNOLD SCHWARZENEGGER, Governor



PUBLIC UTILITIES COMMISSION

505 VAN NESS AVENUE

SAN FRANCISCO, CA 94102-3298

 

 

December 4, 2003 Alternate to Agenda ID #2983

Ratesetting

 

TO: PARTIES OF RECORD IN INVESTIGATION 02-04-026

 

Consistent with Rule 2.3(b) of the Commission's Rules of Practice and Procedure, I am issuing this Notice of Availability of the above-referenced proposed decision. The proposed alternate decision was issued by Commissioner Carl W. Wood on December 4, 2003. An Internet link to this document was sent via e-mail to all the parties on the service list who provided an e-mail address to the Commission. An electronic copy of this document can be viewed and downloaded at the Commission's Website ( www.cpuc.ca.gov). A hard copy of this document can be obtained by contacting the Commission's Central Files Office [(415) 703-2045].

This is a proposed alternate decision to Administrative Law Judge (ALJ) Barnett previously served to you. It will be on the Commission's agenda on December 18, 2003, along with the proposed decision of ALJ Barnett. The Commission may act then, or it may postpone action until later.

 

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

 

As set forth in Rule 77.6, parties to the proceeding may file comments on the enclosed alternate order no later than 5pm on December 11, 2003. An original and four copies of the comments with a certificate of service shall be filed with the Commission's Docket Office and copies shall be served on all parties on the same day of filing. Anyone filing comments shall electronically serve those on the service list who have provided electronic addresses. Parties shall also ensure that they electronically serve their comments on Commissioner Wood's energy advisor, Manuel Ramirez, at mzr@cpuc.ca.gov and assigned ALJ Barnett, at rab@cpuc.ca.gov. For those who have not provided electronic addresses, printed copies of the comments shall be served by first class mail or another expeditious mode of delivery. Reply comments will be due no later than 12 noon on December 16, 2003.

 

 /s/ ANGELA K. MINKIN

Angela K. Minkin, Chief

Administrative Law Judge

 

ANG:mnt

COM/CXW/mnt ALTERNATE DRAFT

Agenda ID ____

(Alternate to Agenda ID #2983)

Ratesetting

Decision PROPOSED ALTERNATE DECISION OF COMMISSIONER WOOD

(Mailed 12/4/03)

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Order Instituting Investigation into the ratemaking implications for Pacific Gas and Electric Company (PG&E) pursuant to the Commission's Alternative Plan of Reorganization under Chapter 11 of the Bankruptcy Code for PG&E, in the United States Bankruptcy Court, Northern District of California, San Francisco Division, In re Pacific Gas and Electric Company, Case No. 01-30923 DM. (U 39 M)

Investigation 02-04-026 (Filed April 22, 2002)

OPINION MODIFYING THE PROPOSED SETTLEMENT
AGREEMENT OF PACIFIC GAS & ELECTRIC COMPANY, PG&E CORPORATION AND THE COMMISSION STAFF AND APPROVING THE SETTLEMENT AGREEMENT AS MODIFIED

Summary 22

Introduction 22

A. Background - PG&E Bankruptcy 44

1. PG&E Plan of Reorganization 55

2. Joint Plan (CPUC and Official Committee of Unsecured Creditors) 77

B. Background - The SCE Settlement and High Rates 1010

C. Background - Basic Concerns 1212

Procedural History 1313

Description of the Settlement Terms and Conditions 1414

D. Structure of the Settlement Plan of Reorganization 1515

E. Financial Elements 1616

1. Regulatory Asset 1717

2. Headroom 2121

3. Ratemaking Matters 2121

4. Dividends and Stock Repurchases 2222

F. Dismissal of Energy Crisis-Related Disputes 2323

G. Environmental Provisions 2323

H. Conditions Precedent to Effectiveness of Settlement Plan 2525

I. Other Provisions 2525

1. Assignability of DWR contracts 2525

2. Interest Rate Hedging 2626

3. Financing 2626

4. Fees and Expenses 2626

5. Releases 2727

6. Bankruptcy Court Supervision 2727

Standard of Review 2828

Lawfulness of the Settlement Agreeement 3131

J. The Purpose of the Commission v. The Purpose of the Bankruptcy Court 3131

K. The Commission's Ability to Bind Future Commissions 3434

L. Jurisdiction of the Bankruptcy Court 4343

M. Consistency with Assembly Bill 1890 and § 368(a) 4545

Whether the Proposed Settlement Agreement Is in the Public Interest 4747

N. Adequacy of a Settlement Proposal in Achieving Feasible Plan of Reorganization 4747

1. The MSA Will Allow PG&E to Emerge Promptly From Bankruptcy 4848

2. The Rating Agencies (S&P and Moody's) 4949

O. Fairness and Reasonableness 5252

1. Relationship of Settlement to Parties' Risks of Achieving Desired Results 5252

2. The Risk, Expense, Complexity, and Likely Duration of Further Bankruptcy Litigation 5353

3. Reasonableness of Settlement of Other Claims and Litigation 5555

4. Reasonableness of Rates 5959

5. Adequacy of Representation In the Settlement Process 6060

6. Release of PG&E Corporation 6262

P. Public Interest 6262

1. The Regulatory Asset 6262

2. Headroom 6565

3. Dividends 6666

4. Credit Rating 6868

5. Assignability of DWR Contracts 7272

6. Environmental Matters 7272

The TURN Dedicated Rate Component Proposal 7878

Rulings of the Administrative Law Judge (ALJ) 8383

Comments on the Alternate Proposed Decision 8484

Assignment of Proceeding 8484

OPINION MODIFYING THE PROPOSED SETTLEMENT
AGREEMENT OF PACIFIC GAS & ELECTRIC COMPANY, PG&E CORPORATION AND THE COMMISSION STAFF, AND APPROVING A MODIFIED SETTLEMENT AGREEMENT

Summary

This decision modifies and clarifies the Proposed Settlement Agreement (PSA) offered by Pacific Gas & Electric Company (PG&E), PG&E Corporation, and the Commission staff. We find that the settlement agreement, with these modifications and clarifications, is fair, just and reasonable and in the public interest. Therefore, we enter into the Modified Settlement Agreement (MSA).