STATE OF CALIFORNIA Arnold Schwarzenegger, Governor
PUBLIC UTILITIES COMMISSION
505 VAN NESS AVENUE
SAN FRANCISCO, CA 94102-3298
February 15, 2005 Agenda ID #4312
Alternate Proposed Decision - Agenda ID #4320
Ratesetting
TO: PARTIES OF RECORD IN APPLICATION 02-12-027 ET AL.
RE: NOTICE OF AVAILABILITY OF PROPOSED DECISION OF ALJ DOUG LONG AND ALTERNATE PROPOSED DECISION OF COMMISSIONER BROWN FOR PHASE TWO COST OF SERVICE TEST YEAR 2004 FOR SOUTHERN CALIFORNIA GAS COMPANY AND SAN DIEGO GAS & ELECTRIC COMPANY.
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 of Administrative Law Judge (ALJ) Doug Long and the alternate proposed decision by Commissioner Geoffrey F. Brown that was issued on February 15, 2005. Internet links to these documents 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 decision can be viewed and downloaded at the Commission's Website ( www.cpuc.ca.gov).
Any recipient of this Notice of Availability who is not receiving service by electronic mail in this proceeding may request a paper copy of this document from the Commission's Central Files Office, at (415) 703-2045; e-mail cen@cpuc.ca.gov.
These are the proposed decisions of ALJ Long (previously designated as the principal hearing officer) and an alternate proposed decision of Commissioner Brown. They will not appear on the Commission's agenda for at least 30 days after the date they are mailed. This matter was categorized as ratesetting and is subject to Pub. Util. Code § 1701.3(c). Pursuant to Resolution ALJ-180, a Ratesetting Deliberative Meeting to consider this matter may be held upon the request of any Commissioner. If that occurs, the Commission will prepare and mail an agenda 10 days beforehand. When a Ratesetting Deliberative Meeting is held, there is a related ex parte communications prohibition period.
When the Commission acts on one of these proposed decisions, it may adopt all or part of it as written, amend or modify it, or set 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 separate comments on both proposed decisions 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, separate opening comments on ALJ Long's proposed decision shall not exceed 15 pages and pursuant to Rule 87, separate opening comments on Commissioner Brown's alternate proposed decision shall not exceed 35 pages. In the alternative, parties may file opening comments addressing both documents, not to exceed 50 pages in length.
Consistent with the service procedures in this proceeding, parties should send comments in electronic form to those appearances and the state service list that provided an electronic mail address to the Commission, including ALJ Long at dug@cpuc.ca.gov, and Belinda Gatti at beg@cpuc.ca.gov. Service by U.S. mail is optional, except that hard copies should be served separately on ALJ Long and Ms. Gatti, and for that purpose I suggest hand delivery, overnight mail or other expeditious methods of service. In addition, if there is no electronic address available, the electronic mail is returned to the sender, or the recipient informs the sender of an inability to open the document, the sender shall immediately arrange for alternate service (regular U.S. mail shall be the default, unless another means - such as overnight delivery is mutually agreed upon). The current service list for this proceeding is available on the Commission's Web page, www.cpuc.ca.gov.
/s/ ANGELA K. MINKIN by KH
Angela K. Minkin, Chief
Administrative Law Judge
AKM:eam
Attachment
ALJ/DUG/hl2 DRAFT Agenda ID #4312
Ratesetting
Decision PROPOSED DECISION OF ALJ LONG (Mailed 2/15/2005)
BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA
Application of Southern California Gas Company for Authority to Update its Gas Revenue Requirement and Base Rates. (U 904 G) |
Application 02-12-027 |
Application of San Diego Gas & Electric Company for Authority to Update its Gas and Electric Revenue Requirement and Base Rates. (U 902-M) |
Application 02-12-028 |
Investigation on the Commission's Own Motion into the Rates, Operations, Practices, Service and Facilities of Southern California Gas Company and San Diego Gas & Electric Company. |
Investigation 03-03-016 |
(See Appendix B for a list of appearances)
DECISION ON SOUTHERN CALIFORNIA GAS COMPANY AND
SAN DIEGO GAS & ELECTRIC COMPANY'S PHASE 2
POST-TEST YEAR 2004 RATEMAKING, EARNINGS SHARING,
INCENTIVE PROPOSALS, AND 2004 INCENTIVE PROPOSALS
Table of Contents
Title Page
DECISION ON SOUTHERN CALIFORNIA GAS COMPANY AND
SAN DIEGO GAS & ELECTRIC COMPANY'S PHASE 2 POST-TEST
YEAR 2004 RATEMAKING, EARNINGS SHARING, INCENTIVE
PROPOSALS, AND 2004 INCENTIVE PROPOSALS 22
3. Overview of the Litigated Issues 88
4. Starting Conditions for Indexing 1010
a. Option to Decline Sharing 2828
b. Sharing in the Base Margin Settlement 2929
11. Electric Reliability Incentives for SDG&E 4040
a. System Average Interruption Duration Index (SAIDI) 4242
b. System Average Interruption Frequency Index (SAIFI) 4343
c. Momentary Average Interruption Frequency Index (MAIFI) 4343
13. Service Quality indicators 5757
16. Comments on the Proposed Decision 6464
17. Assignment of Proceeding 6464
DECISION ON SOUTHERN CALIFORNIA GAS COMPANY AND
SAN DIEGO GAS & ELECTRIC COMPANY'S PHASE 2
POST-TEST YEAR 2004 RATEMAKING, EARNINGS SHARING,
INCENTIVE PROPOSALS, AND 2004 INCENTIVE PROPOSALS
1. Summary
a. Adopted Post-Test Year Ratemaking and Other Incentives
In this decision, we approve post-test year ratemaking mechanisms for Southern California Gas Company (SoCalGas) and San Diego Gas & Electric Company (SDG&E) that will remain in effect until their next general rate case (GRC) for Test Year (TY) 2008.
We adopt a modified version of the requests for a Margin Per Customer (MPC) and an indexing method that relies on specific inflation measuring indices and includes an X-factor adjustment for productivity and a stretch factor to adjust for the average-effect in the X-factor study population. We adopt a sharing mechanism substantially as requested, with a wider deadband, and we allow sharing in both directions, above and below the authorized return.
We reject the automatic cost of capital mechanism proposed by SoCalGas and SDG&E and instead order them to file annual cost of capital applications. We include in post-test year ratemaking a provision for the exogenous unforeseen events, known as Z-factors, but we include a $5 million deductible for all Z-factors, and we reiterate that SoCalGas and SDG&E bear the full obligation to carry the burden of proof for any recovery of Z-factors.
We reject the lesser standard of review proposed by applicants. We adopt modified electric reliability incentives for SDG&E that set reasonable targets and include appropriate rewards and penalties. We adopt a modified safety incentive for both companies that sets reasonable targets and includes appropriate rewards and penalties. Finally, we adopt monitor-only customer satisfaction measurements in addition to four specific customer satisfaction incentives that set reasonable targets and include appropriate rewards and penalties.
This decision rejects proposals for a SoCalGas service guarantee and eliminates the existing guarantee for SDG&E. Finally, this decision determines that earnings sharing and all of the incentive mechanisms do not apply to 2004 operations and will be effective from 2005 onwards until modified or terminated by further action of the Commission.
b. Burden of Proof
As discussed in Phase 1, SoCalGas and SDG&E have the sole obligation to provide a convincing and sufficient showing to meet the burden of proof, and any active participation of other parties can never change that obligation.
