4. Close Proceeding

After rehearing the issue of when the rate control period ended, we initially contemplated that we would need a Phase 2 to "determine the extent and disposition of stranded costs left unrecovered." (D.02-01-001, mimeo., page 25.¹¹ ¹²) We now find that further determination unnecessary.

Phase 2 is unnecessary because the principles of AB 6X relied on here continue to apply. That is, rates after January 18, 2001, for utility retained generation are to be based on continued Commission regulation. Commission regulation of those assets is on the basis of cost-of-service. (D.02-04-016.) No facility for the generation of electricity owned by a public utility may be disposed of prior to January 1, 2006, and disposal may occur only after authorization by the Commission under § 851. Public utility generation assets are to remain dedicated to service for the benefit of California ratepayers. (§ 377 as modified by AB 6X.)

As a result of these principles and other proceedings, the costs that would otherwise have been (or be) at issue in Phase 2 have already been (or will be) addressed. Nothing further needs to be considered here.

That is, the costs at issue for Phase 2 already have been fully addressed and resolved for SCE through full recovery of the balance in SCE's procurement related obligations account (PROACT), plus other AB 1890 related accounts. (Application (A.) 03-01-019, D. 03-07-029; A.00-03-047.) Similarly, the costs at issue for Phase 2 will be fully addressed and resolved for PG&E upon PG&E's emerge from bankruptcy, and recovery of costs in other AB 1890 related accounts. (Investigation (I.) 02-04-026; A.00-03-038.) We need not duplicate work here that has already been (or will be) done elsewhere, and we may close this rehearing portion of this consolidated proceeding.

¹¹ Although we used the phrase "stranded costs" in that decision, we subsequently determined that, upon enactment of AB 6X, there no longer are any "uneconomic," "stranded," or "transition" costs within the meaning of AB 1890. (D.02-11-026.) ¹² Evidently contending that Phase 2 would be illegal, TURN asserts "nothing in AB 6X can be read to repeal the prohibition on stranded cost recovery after 3/31/02." (TURN Opening Brief dated May 28, 2002, page 16, emphasis in original.) We subsequently disposed of this issue, however, saying:

"...ABX1-6 clearly and expressly confer[s] on the Commission jurisdiction over regulation of the utilities' retained generation assets, including rates. Such jurisdiction includes, for example, authority to determine whether and to what extent the utilities may recover in rates their investments in these retained generation assets." (D.02-11-026, mimeo., page 13.)