Long Comment Dec. Appendixes C-F
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STATE OF CALIFORNIA ARNOLD SCHWARZENEGGER, Governor

PUBLIC UTILITIES COMMISSION

505 VAN NESS AVENUE

SAN FRANCISCO, CA 94102-3298

September 28, 2004 Agenda ID #3936

TO: PARTIES OF RECORD IN APPLICATION 02-12-027 ET AL.

RE: NOTICE OF AVAILABILITY OF PROPOSED DECISION AND ALTERNATE PROPOSED DECISION OF COMMISSIONER WOOD ON PHASE ONE DECISION COST OF SERVICE TEST YEAR 2004 FOR SOUTHERN CALIFORNIA GAS COMPANY AND SAN DIEGO GAS & ELECTRIC COMPANY

Consistent with Rule 2.3(b) of the Commission's Rules of Practice and Procedure, I am issuing this Notice of Availability of the above-referenced proposed decision by Administrative Law Judge (ALJ) Long and the alternate proposed decision by Commissioner Wood that were issued on September 28, 2004. Internet links to these documents were sent via e-mail to all the parties on the service list who provided an e-mail address to the Commission. An electronic copy can be viewed and downloaded at the Commission's Website ( www.cpuc.ca.gov).

Any recipient of this Notice of Availability who is not receiving service by electronic mail in this proceeding may request a paper copy of these documents from the Commission's Central Files Office, at (415) 703-2045; e-mail cen@cpuc.ca.gov.

These are the proposed decision of ALJ Long (previously designated as the principal hearing officer) and an alternate proposed decision of Commissioner Wood. They will not appear on the Commission's agenda for at least 30 days after the date they are 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 10 days beforehand. When a Ratesetting Deliberative Meeting is held, there is a related ex parte communications prohibition period.

When the Commission acts on one of these proposed decisions, it may adopt all or part of it as written, amend or modify it, or set both aside and prepare its own decision. Only when the Commission acts does that decision become binding on the parties.

Parties to the proceeding may file separate comments on both proposed decisions 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, separate opening comments on ALJ Long's proposed decision shall not exceed 25 pages and pursuant to Rule 87, separate opening comments on Commissioner Wood's alternate proposed decision shall not exceed 35 pages. In the alternative, parties may file opening comments addressing both documents, not to exceed 50 pages in length.

Consistent with the service procedures in this proceeding, parties should send comments in electronic form to those appearances and the state service list that provided an electronic mail address to the Commission, including ALJ Long at dug@cpuc.ca.gov, and Manuel Ramirez at mzr@cpuc.ca.gov. Service by U.S. mail is optional, except that hard copies should be served separately on ALJ Long and Mr. Ramirez, and for that purpose I suggest hand delivery, overnight mail or other expeditious methods of service. In addition, if there is no electronic address available, the electronic mail is returned to the sender, or the recipient informs the sender of an inability to open the document, the sender shall immediately arrange for alternate service (regular U.S. mail shall be the default, unless another means - such as overnight delivery is mutually agreed upon). The current service list for this proceeding is available on the Commission's Web page, www.cpuc.ca.gov.

/s/ ANGELA K. MINKIN by PSW

Angela K. Minkin, Chief

Administrative Law Judge

ANG:sid

Attachments

ALJ/DUG/sid DRAFT Agenda ID #3936

Decision PROPOSED DECISION OF ALJ LONG (Mailed 9/28/2004)

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Application of SOUTHERN CALIFORNIA GAS COMPANY for authority to update its gas revenue requirement and base rates. (U 904 G)

Application 02-12-027

(Filed December 20, 2002)

   

Application of SAN DIEGO GAS & ELECTRIC COMPANY for authority to update its gas and electric revenue requirement and base rates. (U 902-M)

Application 02-12-028

(Filed December 20, 2002)

   

Investigation on the Commission's Own Motion into the Rates, Operations, Practices, Service and Facilities of Southern California Gas Company and San Diego Gas & Electric Company.

Investigation 03-03-016

(Filed March 13, 2003)

   

(See Appendix A for a list of appearances.)

PHASE ONE DECISION

COST OF SERVICE TEST YEAR 2004 FOR

SOUTHERN CALIFORNIA GAS COMPANY AND SAN DIEGO GAS &

ELECTRIC COMPANY

TABLE OF CONTENTS

Title Page

PHASE ONE DECISION COST OF SERVICE TEST YEAR 2004 FOR

SOUTHERN CALIFORNIA GAS COMPANY AND SAN DIEGO GAS &

ELECTRIC COMPANY 2

I. Summary 2

II. Overview of the Applications 3

III. The Framework for These Cost of Service Proceedings 4

IV. Legal Standards 8

V. Procedural History 12

VI. Partial Settlements 14

VII. Structure of this Decision 30

VIII. Test Year Forecast Methodology 31

IX. Return to the Rate Case Processing Plan 34

X. Agreement Between Litigants 36

XI. Escalation 38

XII. Employee Total Compensation 41

XIII. True Labor Cost Balancing Account (TLCBA) 45

XIV. Workers' Compensation - Account 925 67

XV. Rate Base 70

XVI. Capitalization Policy 71

XVII. SoCalGas Plant Additions 73

XVIII. SDG&E Capital Additions 98

XIX. Working Cash - SoCalGas and SDG&E 126

XX. Depreciation - SoCalGas and SDG&E 135

XXI. Land Rights 139

XXII. Test Year 2004 Customer Forecast 140

XXIII. Operating Expenses 141

XXIV. Clearing Accounts 142

XXV. Operating & Maintenance - Gas Storage (SoCalGas) 146

XXVI. Gas Distribution Operations 157

XXVII. SoCalGas Administrative and General Expenses 209

XXVIII. Shared Services 227

XXIX. SoCalGas and SDG&E - Income and Other Taxes 268

XXX. SDG&E Electric Department Operations & Maintenance Expense 269

XXXI. ORA's Historical Review 285

XXXII. Electric Rate Design - SDG&E 288

XXXIII. Additional Issues Identified in the Scoping Memo 289

XXXIV. Comments on Proposed Decision 295

XXXV. Assignment of Proceeding 296

Findings of Fact 296

Conclusions of Law 346

ORDER 350

APPENDIX A - List of Appearances

APPENDIX B - List of Acronyms and Abbreviations

APPENDIX C - SDG&E Combined Summary of Earnings Test Year 2004

APPENDIX D - SDG&E Gas Summary of Earnings Test Year 2004

APPENDIX E - SDG&E Electric Summary of Earnings Test Year 2004

APPENDIX F - SoCalGas Summary of Earnings Test Year 2004

PHASE ONE DECISION

COST OF SERVICE TEST YEAR 2004 FOR

SOUTHERN CALIFORNIA GAS COMPANY AND SAN DIEGO GAS &

ELECTRIC COMPANY

I. Summary

In this decision, the Commission establishes the authorized base electric and gas revenue requirements for Southern California Gas Company (SoCalGas) and San Diego Gas & Electric Company (SDG&E) in the consolidated applications for Test Year 2004 Cost of Service. The critical issue in these proceedings is to ensure that the companies receive a reasonable level of revenue for monopoly distribution services that will in turn assure customers of safe, reliable and responsive service under conditions of prudent management, while assuring the companies' ability to earn an authorized rate of return, again assuming prudent and effective management. We do not intend to place safety, reliability or the responsiveness of the companies' service at risk through under funding activities, programs and services. This is the same standard we used in Pacific Gas and Electric Company's (PG&E) Application (A.) 97-12-020.1 This decision rejects the two proposed partial Settlement Agreements filed in these proceedings. Phase 1 of these proceedings was submitted on February 19, 2004.

We authorize for SoCalGas $1.501 million in natural gas distribution revenues for Test Year 2004. We authorize SDG&E $776.097 million in electric distribution revenues and $211.520 million in natural gas distribution revenues for Test Year 2004.

1 Decision (D.) 00-02-046, dated February 17, 2000. (Mimeo., p. 2.)

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