ALJ/BDP/sid DRAFT Item 1

1/4/2001

Decision PROPOSED DECISION OF ALJ PATRICK (Mailed 11/29/2000)

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Application of PACIFIC GAS AND ELECTRIC COMPANY in the 1999 Annual Transition Cost Proceeding.

Application 99-09-006 (Filed September 1, 1999)

(See Appendix A for a list of appearances.)

TABLE OF CONTENTS

Title Page

INTERIM OPINION ON 1999 ANNUAL TRANSITION

COST PROCEEDING 2

I. Summary 2

II. Procedural Summary 2

III. Hunters Point Power Plant 3

IV. PG&E's Application 3

A. Motion to Strike 5

V. The Stipulation 5

VI. Employee-Related Transition Costs 9

A. Position of ORA 9

B. Position of PG&E 11

C. Position of CUE 11

D. Discussion 15

VII. Workforce Reduction Rate Mechanism (WRRM) Account 16

A. Background 16

B. Position of PG&E 18

C. Position of ORA 19

D. Response of PG&E 21

E. Discussion 24

VII. Comments on Proposed Decision 26

Findings of Fact 26

Conclusions of Law 32

INTERIM ORDER 33

APPENDIX A List of Appearances

APPENDIX B Stipulation Agreement

INTERIM OPINION ON 1999 ANNUAL

TRANSITION COST PROCEEDING

I. Summary

The Commission approves an all-party settlement in Pacific Gas and Electric Company's (PG&E) 1999 Annual Transition Cost Proceeding (ATCP). The settlement resolves all but two issues: (1) generation-related employee transition costs, and (2) the Workforce Reduction Rate Mechanism (WRRM) account. With regard to these contested issues, the Commission concludes that PG&E should be authorized to: recover $500,000 for payments made to 11 employees under the Bargaining Unit Severance and Displacement Program; and close the WRRM memorandum account and recover an undercollection of approximately $2 million. These amounts would be recovered through the Transition Cost Balancing Account (TCBA).