ALJ/RAB/t93 DRAFT CA-5
5/24/01
Decision DRAFT DECISION OF ALJ BARNETT (Mailed 4/17/01)
BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA
In the Matter of the Application of Southern California Gas Company (U 904-G) for Authority to Revise its Rates Effective August 1, 1999, in its Biennial Cost Allocation Proceeding. |
Application 98-10-012 (Petition for Modification filed January 2, 2001) |
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In the Matter of the Application of San Diego Gas and Electric Company (U 902-G) for Authority to Revise its Rates Effective August 1, 1999, in its Biennial Cost Allocation Proceeding. |
Application 98-10-031 (Filed October 15, 1998) |
OPINION
The Southern California Generation Coalition (SCGC) submits its Petition for Modification of Decision (D.) 00-04-060. SCGC requests that the decision be modified to provide that the Southern California Gas Company (SoCalGas) shall be required to submit its next Biennial Cost Allocation Proceeding (BCAP) application by Friday, June 29, 2001, so as to permit the full 18 months allowed under SB 960 and Rule 6 of the Commission's Rules of Practice and Procedure for processing the application.
Background
In D.00-04-060 (April 20, 2000), the Commission found that the current SoCalGas BCAP period shall terminate at the end of 2002. (D.00-04-060, Finding 10 at p. 141.) The rationale for terminating the BCAP period at the end of 2002 was that such a termination date "would synchronize the end of the BCAP with the end of both the SoCalGas and SDG&E PBR proceedings." (Id. at 16.)
SCGC argues that the experience of the last SoCalGas BCAP illustrates the necessity of requiring that SoCalGas file its next BCAP application at least 18 months before the end of the current BCAP period. D.97-04-082 provided that SoCalGas' 1996 BCAP period would extend to July 31, 1999, with new BCAP rates becoming effective on August 1, 1999. (D.97-04-082, at 6.) D.97-04-082 did not prescribe a specific date by which SoCalGas would be required to submit its 1998 BCAP application. SoCalGas elected to wait until October 1, 1998 to file Application 98-10-012 proposing rates to take effect only ten months later on August 1, 1999. The ten months allowed by SoCalGas for processing its 1998 BCAP application was inadequate. A decision in the case was issued on April 20, 2000, nearly 19 months after SoCalGas submitted its application.
SCGC says SoCalGas' 2001 BCAP application is likely to be just as contentious as its last application. A delay in filing the 2001 application would be likely to result in a delay in implementing new rates. The forecasts adopted in D.00-04-060, which are the basis of the currently effective rates, are intended to be in effect only until the end of the BCAP period on December 31, 2002. By definition, continuation of current rates past December 31, 2002 will cause customers to pay rates which would be unjust and unreasonable as of January 1, 2003. Accordingly, the Commission should require SoCalGas to submit its next BCAP application by Friday, June 29, 2001, so as to permit a full 18 months of processing the application.
SoCalGas objects to SCGC's petition. It says that filing 18 months prior to December 31, 2002 is unwarranted. It argues that a BCAP application should not be filed more than ten months prior to the date the BCAP rates become effective. Various resource plans are used for preparing SoCalGas' BCAP proposals. The more current the resource plan, the more credible the information. The closer in time the application is filed to the date the BCAP rates are to become effective, the more predictive is the result. SoCalGas believes this is particularly true in its next BCAP, where the application should incorporate certain outcomes from the gas industry restructuring proceeding (I.99-07-003), which proceeding has not yet concluded.
We agree with SCGC. BCAP's are getting more contentious with more parties presenting evidence. The last BCAP took 19 months from application to decision and there is no reason to expect much less time in the next BCAP. SoCalGas' argument that the closer the application filing is to the December 31, 2001 date the more current the information, is not persuasive. In a lengthy proceeding updated information is placed on the record from time to time. It was done in the last BCAP and we would expect it to be done in the next BCAP. SoCalGas, while objecting to SCGC's proposal, does not propose a date when it will file, although from its objection we infer it will file ten months prior to December 31, 2001. Based on recent experience ten months lead time is not adequate.
