Summary of Parties' Positions

PG&E generally supports the concept of delaying the TY 2002 GRC for six months, contingent upon interim rate relief and elimination of financial uncertainty resulting from a later Commission decision. If Commission decides a six-month delay is necessary, PG&E would tender its NOI in February 2001 and would file its application approximately four months later, with a final decision expected in July 2002. PG&E proposes that the Commission assign a settlement administrative law judge (ALJ) to this application. PG&E recommends that parties should be allowed to protest the application, with PG&E responding, in order to flesh out the issues and to encourage early and productive settlement discussions. The settlement judge would convene the first of a series of settlement meetings in March 2001.

PG&E also proposes that the Commission grant interim rate relief as of January 1, 2002, and to mitigate financial uncertainty that the Commission should approve PG&E's request for 2002 attrition, which it will request in its 2001 Attrition application. (The 2002 attrition would cover the period from January 1, 2002 until a decision is rendered in the GRC.)

PG&E believes it is possible to streamline this proceeding if the Commission encourages settlement, by consolidating hearings after parties have filed direct and rebuttal testimony, by determining that marginal cost proposals are to be considered in Phase II of the GRC, by simplifying the Efforts Study called for in D.00-02-046, by moving the consideration of PG&E's gas resource plan, and, in particular, by beginning now to work with Energy Division to simplify computer models.

PG&E also suggests that it may be possible to adjust the results of the compensation study from the last GRC for compensation levels in TY 2002 GRC. PG&E notes that the Commission did not order a new compensation study for the TY 2002 GRC. PG&E proposes that the Commission consider depreciation parameters in generic triennial proceeding for all energy utilities and that the TY 2002 GRC focus showing on distribution and customer services functions, and include costs for electric generation, transmission and nuclear decommissioning only to the extent necessary to support common cost allocation.

ORA proposes a nine-month delay in PG&E's TY 2002 GRC application. ORA believes this schedule is preferable to a six-month delay since it would result in PG&E's NOI being filed near the end of hearings in the SCE GRC. A six-month delay would create a problem with staff processing deficiencies in PG&E's NOI and conducting discovery on its application while SCE GRC hearings are being conducted. Under a nine-month delay, PG&E would tender its NOI in May 2001, file its application in August 2001, and a final decision would be expected in September 2002.

ORA agrees that PG&E should be afforded interim rate relief for the period beginning January 1, 2002, until a final decision is rendered with balancing account treatment similar to what was granted in D.98-12-078 in PG&E's TY 1999 GRC.

ORA supports simplification of computer modeling, and eliminating gas resource plan (gas resource plan should be reviewed in the BCAP). However, ORA recommends that the Effort Study should not be eliminated because some flexibility is needed for changed circumstances. ORA suggests that there should be a presumption in favor of the allocation factors adopted in D.00-02-046. One set of hearings should address all direct and rebuttal testimony. If there is a nine-month delay, ORA believes that PG&E could include recorded year 2000 data in its NOI and application and avoid the need for updating. ORA states that the scope of PG&E's GRC can be further reduced by eliminating filing for generation, transmission and nuclear recovery, utilizing an update approach to Total Compensation Study for evaluating wage levels, using the labor escalation index PG&E stipulated to in TY 1999 GRC, using an index rather than an econometric approach to measuring Total Productivity, eliminating any performance study, and deferring marginal cost issues to Phase II.

ORA also believes that this proceeding would be streamlined if PG&E is more responsive and thorough in responding to data requests and if the Commission places limitations on PG&E's efforts to make a direct showing through rebuttal testimony.

TURN supports as much as a one-year delay in PG&E's GRC, because a six-month delay would not eliminate the potential for overlap with the SCE GRC. TURN strongly recommends that intervenor testimony should continue to follow ORA testimony and that the amount of time between intervenor and ORA testimony should not be reduced. Rather than eliminating the Effort Study, TURN recommends that the Commission should establish a process to enable parties to work with PG&E to shape the study before it is submitted. Rather than "streamlining" the computer modeling process, TURN believes that the Commission should focus on making sure the modeling is sufficiently transparent, and require that transparency to be achieved early in the proceeding.

James Weil agrees that a six-month delay seems most likely to balance the impacts of the PG&E GRC between the SCE GRC and other annual proceedings scheduled for litigation in 2002. Weil is concerned that a delay in PG&E's TY 2002 GRC might expand the scope of the attrition application to litigate additional attrition adjustment for the first six months of 2002 or authority to make TY 2002 revenue requirement effective on January 1, 2002. Weil would oppose a request for such relief and recommends that the Commission should not expand the 2001 attrition application to consider an attrition adjustment for 2002. Weil suggests that the Commission modify the scope of the proceeding by eliminating consideration of attrition adjustments. Restricting the terms of interim rate relief would give PG&E an incentive to respond to discovery promptly, and present its entire case in the application (versus revisions in updates and rebuttal).

Weil also notes that a delay in PG&E's GRC could extend the final decision beyond the end of the rate freeze. Public confidence in the Commission processes and PG&E could be diminished by an electric rate reduction at the end of the transition period, followed by a rate increase in the GRC.

While Enron does not oppose a delay in PG&E's TY 2002 GRC, Enron is concerned that proposing a delay now undermines D.00-02-046 regarding its intended enhanced level of scrutiny of PG&E's expenditures. Enron opposes interim rate relief, but if the Commission decides to implement it, it should use the same mechanism applied in D.98-12-078. Enron believes that interim rate relief removes the incentive for PG&E to present a filing that is complete, accurate and understandable to parties.