VII. Assignment of Proceeding

Geoffrey Brown is the Assigned Commissioners and Thomas Pulsifer is the assigned ALJ in this proceeding.

Findings of Fact

1. The correction made in D.03-08-076, replacing the term "CRS" with the term "CTC", was done so by Commission independently of any request from a party in order to properly reflect the limited applicability of the statute.

2. Section 369 states that the obligation to pay CTC is not avoided by the formation of a publicly owned electrical corporation after December 20, 1995, or by annexation of any portion of an electrical corporation's service area.

3. The statutory language in § 369 is expressly limited to CTC, and no statutory provision was identified by CMUA that warrants extending its applicability to cover other elements of CRS.

4. There is no ambiguity in D.04-12-059 with respect to new MDL cost responsibility for the DWR Bond Charge, nor any conflict between D.04-12-059 and other relevant Commission decisions.

5. The language in D.04-12-059 is clear that new MDL is responsible for the DWR Bond Charge

6. D.04-12-059 was responsive to PG&E's Application for Rehearing, filed November 29, 2004, (see page 23) which expressly sought clarification that there is no MDL exemption for either the DWR Bond Charge or Tail CTC

7. In requesting modification to exempt new MDL from the DWR Bond Charge based on arguments that DWR never procured power for new MDL, CMUA fails to address why MDL should be treated more favorably than CGDL with respect to responsibility for DWR Bond Charges.

8. In establishing the new MDL exception for existing POUs with transferred load within the geographic region covered by the PG&E Bypass Report, the Commission did not intend that the transferred load MW exception amount would be interchangeable with the new load exception.

9. The sense in which the Commission intended that the CRS exception for transferred load shall "apply equally to new load" is with respect to its equivalent eligibility status, but not with respect to interchangeability of MW load between the transferred and new MDL categories.

10. The exemption for existing POUs with new load is not unlimited but is defined by the limits of its geographic coverage rather than by a specific numerical cut-off on the MW eligible for exemption. The geographic coverage is limited to the area identified in the PG&E Bypass Report attributable to transferred MDL.

11. By contrast, new MDL served by new POUs formed on or after July 10, 2003 remains subject to the interim 80 MW exemption cap adopted in D.04-12-059.

Conclusions of Law

1. The Petition for Modification, filed in R.02-01-011 by the CMUA should be granted, in part, and denied, in part, as set forth in the order below.

2. The Commission acted lawfully in correcting the reference in D.03-08-076 to "CRS" to "CTC" with respect to the applicability of exemptions for "stand-alone" transactions consistent with the statutory limits of § 369.

3. Any new MDL within the geographic areas identified in the PG&E Bypass Report, would be in addition to-not interchangeable with-the authorized amount of the transferred load exception.

4. CMUA has not provided any justifiable basis for revising the requirement in D.04-12-059 affirming that new MDL is responsible for the DWR Bond Charge.

5. Consistent with the treatment of CGDL, new MDL should be held responsible for the DWR Bond Charge, pursuant to Pub. Util. Code § 366.2(d), even to the extent they will not have to pay the DWR Power Charge.

6. CMUA's request to relitigate MDL responsibility for the DWR Bond Charge cost responsibility is beyond the scope of a Petition for Modification.

O R D E R

IT IS ORDERED that:

1. The Petition for Modification (Petition), filed by the California Municipal Utilities Association in Rulemaking (R.) 02-01-011 is granted, in part, and denied, in part.

2. The Petition is granted with respect to the request to affirm that the new Municipal Departing Load (MDL) exception within the geographic area covered in the Pacific Gas and Electric Company Bypass Report is in addition to, and not interchangeable with-the associated transferred load.

3. The new MDL exception for existing Publicly-Owned Utilities covered in the Bypass Report is not subject to any specific numerical megawatt cut-off, but is limited in terms of the geographic area covered by the transferred load as defined by the PG&E Bypass Report.

4. The Petition filed in R.02-01-011 is denied in all other respects.

Dated _________________, at San Francisco, California.

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