ALJ/XJV/jva Mailed 2/17/2006

Decision 06-02-003 February 16, 2006

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Investigation on the Commission's Own Motion Into the Operations and Practices of Pacific Gas and Electric Company; Notice of Opportunity for Hearing; and Order to Show Cause Why the Commission Should Not Impose Fines and Sanctions for the December 20, 2003 PG&E Mission Substation Fire and Electric Outage Pursuant to Public Utilities Code Section 451.

Investigation 05-03-011 (Filed March 17, 2005)

OPINION APPROVING SETTLEMENT

Summary

We approve the settlement between Pacific Gas and Electric Company (PG&E), the Commission's Consumer Protection and Safety Division (CPSD), and the City and County of San Francisco (CCSF). The settlement resolves all issues in this proceeding, which was opened after the issuance of investigative reports on the 2003 fire at PG&E's Mission Substation. The parties' settlement requires PG&E shareholders to make payments totaling $6.5 million -- $6.0 million for five programs and projects to improve electric system reliability and the remainder to the State's General Fund. We order only two refinements of the reporting requirements the parties have already agreed upon, in order to guard against inadvertent double counting in PG&E's next general rate case (GRC).

First, we direct CPSD to exercise its rights for an accounting of CCSF's use of one expenditure and second, we require PG&E to provide, for our review, an accounting of the total expenditure-something the settlement already permits the two other parties to request.