TerKeurst Attachment B
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STATE OF CALIFORNIA GRAY DAVIS, Governor

PUBLIC UTILITIES COMMISSION

505 VAN NESS AVENUE

SAN FRANCISCO, CA 94102-3298

December 12, 2002 Agenda ID #1528

TO: PARTIES OF RECORD IN RULEMAKING 01-05-047

This is the proposed decision of Administrative Law Judge (ALJ) TerKeurst, previously designated as the principal hearing officer in this proceeding. It will not appear on the Commission's agenda for at least 30 days after the date it is 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 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, 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 proposed decision 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 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.

/s/ CAROL A. BROWN

Carol A. Brown, Interim Chief

Administrative Law Judge

CAB:hkr

ALJ/CFT/hkr DRAFT Agenda ID #1528

Decision PROPOSED DECISION OF ALJ TERKEURST (Mailed 12/12/2002)

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Order Instituting Rulemaking on the Commission's Own Motion to Determine Whether Baseline Allowances for Residential Usage of Gas and Electricity Should Be Revised.

Rulemaking 01-05-047

(Filed May 24, 2001)

(See Attachment A for List of Appearances.)

INTERIM OPINION IN PHASE 2 APPROVING SETTLEMENT
ON COMMON AREA ACCOUNTS

TABLE OF CONTENTS

Title Page

INTERIM OPINION IN PHASE 2 APPROVING SETTLEMENT
ON COMMON AREA ACCOUNTS
22

I. Summary 22

II. Background 22

III. Summary of Modified Stipulation 66

IV. Discussion 99

V. Comments on Proposed Decision 1818

VI. Assignment of Proceeding 1818

Findings of Fact 1919

Conclusions of Law 2121

INTERIM ORDER 2222

Attachment A: Appearances

Attachment B: Stipulation on Common Area Accounts
in Baseline OIR Phase 2 (Parties' Modified Version)

INTERIM OPINION IN PHASE 2 APPROVING SETTLEMENT
ON COMMON AREA ACCOUNTS

I. Summary

In this opinion, we approve the modified settlement submitted on July 15, 2002, regarding Pacific Gas and Electric Company's (PG&E) residential common area electric accounts. This settlement provides PG&E's common area electric accounts, which are currently served on residential rate schedules, the option to be served on commercial rate schedules. We find that the five-tier residential rate structure adopted in Decision (D.) 01-05-064 is not well suited for application to common area accounts, particularly those with very high usage. The adopted settlement will ameliorate the disproportionately high bill impacts of the residential rate structure on PG&E's larger common area accounts.

In keeping with Rule 51 et seq. of the Commission's Rules of Practice and Procedure (Rules), we approve the modified settlement as being reasonable in light of the whole record, consistent with law, and in the public interest.

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