Word Document

STATE OF CALIFORNIA GRAY DAVIS, Governor

PUBLIC UTILITIES COMMISSION

505 VAN NESS AVENUE

SAN FRANCISCO, CA 94102-3298

March 6, 2001

TO: PARTIES OF RECORD IN APPLICATION 00-05-013

This is the proposed decision of Administrative Law Judge (ALJ) Galvin, previously designated as the principal hearing officer in this proceeding. It will be on the Commission's agenda at the next regular meeting, which is scheduled for April 19, 2001. 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 for the Ratesetting Deliberative Meeting 10 days before hand, and will advise the parties of this fact, and of the related ex parte communications prohibition period.

The Commission may act at the regular meeting on April 19, 2001, or it may postpone action until later. If action is postponed, the Commission will announce whether and when there will be a further prohibition on communications.

When the Commission acts on the proposed 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, attached, of the Commission's "Rules of Practice and Procedure." 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.

________________________

Lynn T. Carew, Chief

Administrative Law Judge

LTC:sid

ALJ/MFG/sid DRAFT Item 2

Decision PROPOSED DECISION OF ALJ GALVIN (Mailed 3/6/2001)

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Application of Pacific Gas and Electric Company for (i) Authority to Establish Its Authorized Rates of Return on Common Equity and for Electric Distribution and Gas Distribution for Year 2001, and (ii) Adoption of an Annual Cost of Capital Adjustment Mechanism. (U 39 M)

Application 00-05-013

(Filed May 8, 2000)

Title Page

O P I N I O N 2

I. Summary 2

II. Jurisdiction 2

III. Request 3

IV. Proceeding Type 3

V. Prehearing Conference 3

VI. Presiding Officer and Scope of Proceeding 4

VII. Customer Notice 4

VIII. Evidentiary Hearings 4

IX. A Fair Return 5

X. Capital Structure 6

XI. Forecast of Interest Rates 7

XII. Return on Common Equity 9

XIII. ROE Implementation 25

XIV. Automatic Trigger Mechanism 25

XV. Test Year 2002 Cost of Capital Application 26

XVI. Comments on Proposed Decision 27

Title Page

Findings of Fact 27

Conclusions of Law 29

ORDER 31

APPENDIX A - Table of Acronyms and Abbreviations

APPENDIX B - List of Official Notice Items

O P I N I O N

I. Summary

Pacific Gas and Electric Company (PG&E) is authorized a 11.22% Return of Equity (ROE) for its 2001 test year. This authorized ROE results in a corresponding 9.12% return on rate base and no change in PG&E's electric or gas revenue requirement for 2001.

We deny PG&E's request to replace its annual cost of capital filing with an automatic trigger mechanism at this time. We also defer PG&E's scheduled May 8, 2001 cost of capital filing until the earlier of May 8, 2002 or upon the assigned Commissioner directing PG&E to file.

PG&E's adopted capital structure for 2001 is summarized as follows:

Weighted

Ratio

Cost

Cost

Long-Term Debt

46.20%

7.27%

3.36%

Preferred Stock

5.80

6.56

0.38

Common Equity

48.00

11.22

5.38

Total

100.00%

9.12%

     

Previous PageTop Of PageGo To First PageNext Page