Background
Decision (D.) 00-02-046 resolved most issues in PG&E's test year 1999 general rate case, but left open certain issues that were not ready for consideration when the decision was issued. One of these pertains to an ORA audit of PG&E's business and accounting system. Ordering Paragraph 13 of D.00-02-046 provides the following:
"Upon completion of the SAP AG (SAP) business system verification audit, ORA shall file a report setting forth its findings, conclusions, substantive recommendations, and any procedural recommendations for formal Commission consideration thereof. Comments may be filed 15 days after the filing of ORA's report. The [Administrative Law Judge (ALJ)] will make a determination of whether and how to proceed formally thereafter."
ORA filed its report in response to this order (SAP Report) on June 6, 2000. Among other things, ORA proposes a rate base adjustment of $10.5 million based upon its conclusion that PG&E's M&S inventory balances have been overstated. ORA proposes that PG&E be required to file an advice letter to reduce rates to coincide with the recommended rate base reduction.
In comments on the SAP Report, timely filed on June 21, 2000, PG&E takes issue with ORA's proposed rate base adjustment of $10.5 million. PG&E believes that ORA's reasoning on the issue is flawed, although it cannot say that ORA's assertions regarding M&S inventory balances are totally without merit. PG&E believes that further inquiry is required, and recommends that PG&E and ORA jointly investigate this limited issue and report their conclusions to the ALJ within a reasonable period of time.2 PG&E also believes that hearings should be held if the issues cannot be resolved through informal discussions.
2 By ruling issued on July 11, 2000, the ALJ directed PG&E and ORA to pursue a joint investigation and report to the ALJ within 45 days on either the results of the investigation or its status. The ruling also provided an opportunity for other parties to state their interest in the matter.
