Public Agenda 3169

Wednesday, March 15, 2006 10:00 a.m.

San Francisco, California

Michael R. Peevey, President

John A. Bohn

Geoffrey F. Brown

Rachelle B. Chong

Dian M. Grueneich

Scheduled Commission Meetings

505 Van Ness Avenue, San Francisco

For each agenda item, a summary of the proposed action is included; the Commission's decision may,

however, differ from that proposed.

Ratesetting Deliberative Meeting*

Room 5305

(1:30 p.m.)

Closed to the Public

Commission Meeting

Auditorium

(10 a.m.)

Open to the Public

Monday, April 10, 2006 (San

Francisco)

Wednesday, March 15, 2006 (San

Francisco)

Thursday, April 13, 2006 (San

Francisco )

Monday, April 24, 2006 (San

Francisco)

Thursday, April 27, 2006 (San

Francisco)

Monday, May 08, 2006 (San

Francisco)

Monday, May 22, 2006 (San

Francisco)

Thursday, May 11, 2006 (San

Francisco)

Thursday, May 25, 2006 (San

Francisco)

*Ratesetting Deliberative Meeting dates are reserved as noted but will be held only if there are ratesetting matters to be

considered and a Commissioner has requested that a Ratesetting Deliberative Meeting be held.

This location is accessible to people with disabilities.  If specialized accommodations for the disabled

are needed, e.g. sign language interpreters, please call the Public Advisor at (415) 703-2074 or TTY#

(415) 703-5282 or toll free # 1-866-836-7825 three business days in advance of the meeting.

The following items are not subject to public comment:

· All items on the closed session agenda.

·

1

[5295]

Resolution approving issuance of charter-party carrier certificates pursuant to Section 5374(b) of the

Public Utilities Code.

2

[5297]

Ratification of preliminary determination of category for proceedings initiated by application. The

preliminary determinations are pursuant to Article 2.5, Rules 4 and 6.1 of the Commission's Rules of

Practice and Procedure.

3

[5267]

C88-03-016 - The City of St. Helena, Town of Yountville, County of Napa, Napa Valley

Vintners Association vs. Napa Valley Wine Train, Inc.

Following decisions by the Court of Appeal and the California Supreme Court, this decision denies

Petition for Modification filed by Wine Train and closes this proceeding.  The denial leaves standing

Decision 01-06-034, in which the Commission determined that Wine Train’s excursion service is not a

public utility service.

(Comr Grueneich - ALJ Vieth)

Agenda 3167, Item 11 2/16/2006 (Brown);

Agenda 3168, Item 1 3/2/2006 (Bohn)

4

[5271]

This decision grants the application of the City of Gridley to close a lightly used rail crossing but denies

approval at this time for construction of a major new crossing that, while clearly needed, presents

significant safety concerns.  The denial of the application is without prejudice to refiling by the City of

Gridley of a crossing plan that more compellingly addresses safety issues raised by the California

Department of Transportation, Commission staff, and the Union Pacific Railroad Company.  This

proceeding is closed.

(Comr Peevey - ALJ Walker)

Pub. Util. Code § 311 – This item was mailed for Public Comment.

Pub. Util. Code §1701.1 -- This proceeding is categorized as Ratesetting.

Agenda 3167, Item 13 2/16/2006 (Peevey);

Agenda 3168, Item 3 3/2/2006 (Brown)

5

[5293]

R01-12-009 - Order Instituting Rulemaking on the Commission's own motion to evaluate

existing practices and policies for processing offset rate increases and balancing accounts in

the water industry to decide whether new processes are needed.

This decision suspends, until further notice, the earnings test adopted in Decision 03-06-072 which

currently applies to balancing account recovery for Class A water companies’ balancing accounts

existing on or after November 29, 2001.  This proceeding is closed.

(Comr Brown - ALJ Econome)

Pub. Util. Code § 311 – This item was mailed for Public Comment.

Pub. Util. Code §1701.1 -- This proceeding is categorized as Quasi-Legislative.

6

[5335]

R01-10-024 - Order Instituting Rulemaking to establish policies and cost recovery

mechanisms for generation procurement and renewable resource development.

This decision addresses seven petitions to modify four decisions related to electric energy procurement

plans.  The petitions to modify were filed in this proceeding by Pacific Gas and Electric Company,

Southern California Edison Company, San Diego Gas & Electric Company, and Sempra Energy

Resources.  The petitions here request modifications to four decisions: D02-10-062, D03-06-076,

D03-12-062, and D04-01-050.  The first two decisions involve the 2003 procurement plans and the

third and fourth decisions adopt the 2004 procurement plans and a longer term procurement

framework.  The Commission finds that two of the petitions were already addressed through

applications for rehearing and the other five are either moot because they seek changes to short-term

procurement plans that have expired or they address policy issues that are better considered in other

proceedings.  Therefore, this decision denies each petition.

(Comr Peevey - ALJ Walwyn)

Pub. Util. Code § 311 – This item was mailed for Public Comment.

Pub. Util. Code §1701.1 -- This proceeding is categorized as Ratesetting.

7

[5343]

This resolution recommends that the Commission retain fees levels set for the 2004-05 fiscal year for

heat, water and sewer system corporations, and telecommunications corporations. It recommends fees

for electric and gas corporations be increased from zero to .012 cents/kWh and .076 cents/therm

respectively effective April 1, 2006 to provide sufficient revenues and an appropriate reserve in the

Public Utilities Commission Utilities Reimbursement Account.

8

[5347]

This resolution grants conditional approval of Budget Phone, Inc.'s request for Eligible

Telecommunications Carrier Designation subject to compliance with certain requirements.

9

[5348]

This resolution grants conditional approval of Nexus Communications, Inc.'s request for Eligible

Telecommunications Carrier Designation subject to compliance with certain requirements.

10

[5378]

I05-04-018 - Investigation on the Commission’s own motion into the operations and practices

of MCI, WorldCom, or MCI WorldCom,  to determine whether it has violated the laws, rules

and regulations governing the way in which consumers are billed for products or services, by

billing its former customers for a monthly service charge without authorization.

This decision approves a settlement of the Commission’s investigation into slamming and cramming

activities of MCI, WorldCom, and MCI WorldCom (collectively, MCI). Both parties to the

proceeding have agreed to the settlement. The decision finds that the settlement is (1) reasonable in

light of the whole record, (2) consistent with the law, and (3) in the public interest, in accordance with

Commission Rule 51.1(e). Thus, the decision approves the settlement and dismisses this Order

Instituting Investigation (OII) with prejudice. Under the parties’ Settlement Agreement, attached hereto

as Appendix A, MCI will pay $2.3 million, in addition to credits it has already paid to affected

customers.  (MCI estimates its past credits to be in excess of $1 million.)  The $2.3 million will be

allocated in three parts: (1) $1 million in credits for period October 1, 2005 through May 31, 2007.

MCI will pay up to $1 million of the $2.3 million settlement figure in refunds or credits to customers

affected by the conduct alleged in the OII. This $1 million will cover payments issued and to be issued

for the period October 1, 2005 through May 31, 2007. (2) $1.3 million payment to state General

Fund within 30 days of this decision.  MCI will also make a payment of $1.3 million to the state

General Fund within 30 days after the Commission’s approval of the Settlement Agreement. (3)

Potential further payment to state General Fund. If the payments in (1) above are less than $ 1 million,

as evidenced by an accounting MCI will make no later than September 30, 2007 of how the

settlement proceeds were distributed, it will pay the balance to the state General Fund. This

proceeding is closed.

(Comr Grueneich - ALJ Thomas)

11

[5379]

Istvan Csoke seeks a refund of $150 per month since 1999 for overcharges by Verizon Wireless.

Defendant denies the allegations.  Public hearing was held August 29, 2005.  Complaint denied.

Complainant was billed at the plan he had chosen and at the plan rates.  This proceeding is closed.

(Comr Brown - ALJ Barnett)

12

[5381]

PG&E proposes to permanently close the Hunters Point Power Plant. (Advice Letter 2790-E, filed

February 23, 2006)

13

[5382]

This decision authorizes Jeff L. Foss to transfer control of National Comtel Network, Inc. to Paula

Fellingham.  This proceeding is closed.

(Comr Peevey - ALJ Galvin)

14

[5383]

At a duly noticed hearing on December 16, 2005, Defendant appeared, but Complainant did not.

Case 05-10-022 is dismissed for lack of prosecution and is closed.

(Comr Brown - ALJ Barnett)

15

[5384]

SDG&E requests approval of the Pacific Wind renewable resource procurement contract. This

contract is approved without modifications. (Advice Letter 1734-E, filed October 2, 2005)

16

[5386]

This resolution authorizes Erskine an interim general rate increase subject to refund, producing an

increase in gross annual revenues of $24,289 or 6.44%.

17

[5407]

Res E-3983 - Southern California Edison Company (SCE) and San Diego Gas & Electric

Company (SDG&E).

This resolution extends the expiration date of the interim line extension allowance and cost of

ownership charge from 6/30/06 to the date to appear in decisions in SCE Application 05-10-019 and

SDG&E/SoCalGas Application 05-09-019. (SCE Advice Letter (AL) 1847-E and SDG&E AL

1647-E/1494-G, filed December 15 and 20, 2004, respectively)

18

[5286]

I05-05-024 - Related matters. This decision addresses the general rate increase request of the SCE.

SCE is authorized a revenue increase of $60,693,000  for test year 2006 based on a base revenue

requirement level of $3,699,766,000.  The adopted methodology for calculating post test year revenue

requirements results in additional revenue increases of $67,784,000 for post test year 2007 and

$105,319,000 for post test year 2008.  On a general rate case revenue basis, the increases amount to

1.73% for 2006, 1.80% for 2007 and 2.68% for 2008.  On a total system revenue basis, the

increases amount to 0.61% for 2006, 0.67% for 2007 and 1.02% for 2008.  These proceedings are

closed.

(Comr Brown - ALJ Fukutome)

Pub. Util. Code § 311 – This item was mailed for Public Comment.

Pub. Util. Code §1701.1 -- This proceeding is categorized as Ratesetting.

19

[5349]

R05-09-006 - Order Instituting Rulemaking concerning broadband over power line

deployment by electric utilities in California.

This decision adopts a regulatory framework that fosters competition in the broadband market by

providing regulatory certainty to California companies seeking to provide broadband over power lines

(BPL).  The benefits of BPL include a new “wired” broadband pipe to the home, promoting universal

access to broadband services, and providing California electricity consumers with increased reliability

and lower costs through new “smart grid” technologies.  This decision is: (1) allowing third-parties or

electric utility affiliates to provide BPL services; (2) protecting ratepayers and aligning financial risks

and rewards; (3) adopting a mechanism for sharing any additional revenues received from BPL

providers; (4) providing non-discriminatory access to utility poles and rights of way; (5) maintaining the

safety and reliability of the electric distribution system; and (6) adopting a policy of exempting

BPL-related transactions, with conditions, from the requirements of Pub. Util. Code § 851 pursuant to

the Commission's authority under Pub. Util. Code § 853(b).

(Comr Chong - ALJ Allen)

Pub. Util. Code § 311 – This item was mailed for Public Comment.

Pub. Util. Code §1701.1 -- This proceeding is categorized as Quasi-Legislative.

20

[5352]

For approval of incremental energy efficiency program activities for summer 2005. This decision grants

The Utility Reform Network $7,304.95 and denies Women’s Energy Matters $4,800 for participation

leading to Decision 05-05-012. This proceeding involved a request by the SCE for extraordinary

funds for energy efficiency programs designed to reduce peak demand during the summer of 2005.

Because SCE did not issue its request for funding until February 25, 2005, and the programs required

a spring start-up, the entire process occurred on an extremely expedited basis.  Application

05-02-029 is closed.

(Comr Peevey - ALJ Weissman)

21 (Rev.)

[5358]

For approval of 2006-2008 Demand Response Programs and Budgets. A05-06-008; A05-06-017 -

Related matters.  This decision adopts the uncontested modified settlement filed by Southern California

Edison company (SCE), PG&E, San Diego Gas & Electric Company (SDG&E), Disability Rights

Advocates, the Division of Ratepayer Advocates (then known as the Office of Ratepayer Advocates),

The Utility Reform Network, Aglet Consumer Alliance, San Francisco Community Power, and the

Association of California Water Agencies (Settling Parties) which would resolve all outstanding issues

in these applications.  Accordingly, the Commission adopts programs and associated budgets for the

demand response efforts of SCE, PG&E and SDG&E for 2006-08.  The demand response budgets

for the three utilities during the three year funding cycle are as follows: PG&E $108.7 million; SCE

$101 million; SDG&E $52.6 million.

(Comr Peevey - ALJ Malcolm)

Pub. Util. Code § 311 – This item was mailed for Public Comment.

Pub. Util. Code §1701.1 -- This proceeding is categorized as Ratesetting.

22

[5306]

This resolution denies SDG&E's request to allow the City of San Marcos to borrow 19 years into their

future Rule 20.A allocation. (Advice Letter 1722-E, filed August 29, 2005)

23

[5318]

This Resolution approves PG&E’s new Form 79-1048 – Agreement for Unmetered Low Wattage

Equipment Connected to Customer-Owned Street Light Facilities with minor modifications. (Advice

Letter 2752-E, filed December 19, 2005)

24

[5130]

R93-04-003 - Rulemaking on the Commission's own motion to govern open access to

bottleneck services and establish a framework for network architecture development of

dominant carrier networks.

I93-04-002 - Related matters.  This decision, in the "Verizon UNE phase" of OANAD, sets

unbundled network element (UNE) rates for Verizon California and price floors for Category II

services. Rates are set using the HM 5.3 model proposed by AT&T and MCI, and include a 9.89%

cost of capital and an overhead markup of 8.93%. The average basic loop rate is $14.07, a 24%

increase from the $11.36 interim loop rate set in D05-01-057. The new flat monthly port rate is $3.12.

The Verizon models are rejected as not forward-looking. Verizon must calculate billing adjustments of

interim rates to the rates in this order, but payment of any billing adjustment is stayed pending further

proceedings to determine payment options. With regard to price floors, the Commission agrees to

modify D99-11-050 and remove unbundled switching from the price floor calculation. Verizon is

directed to file a compliance filing updating its price floor calculations based on the methodology used

in D03-03-033, updated to reflect the UNE prices in to-day's order.

(Comr Peevey - ALJ Duda)

Agenda 3165, Item 49 1/12/2006 (Staff);

Agenda 3166, Item 39 1/26/2006 (Chong);

Agenda 3167, Item 54 2/16/2006 (Bohn);

Agenda 3168, Item 26 3/2/2006 (Bohn)

25

[5185]

R03-08-018 - Order Instituting Rulemaking to review policies concerning intrastate carrier

access charges.

This decision reduces intrastate access charges by eliminating two non-cost based charges - the

network interconnection charge and transport interconnection charge.  Local exchange carriers are

ordered to record lost revenue in a memorandum account. This proceeding is closed.

(Comr Peevey - ALJ Bushey)

Pub. Util. Code § 311 – This item was mailed for Public Comment.

Pub. Util. Code §1701.1 -- This proceeding is categorized as Ratesetting.

Agenda 3166, Item 40 1/26/2006 (Peevey);

Agenda 3167, Item 55 2/16/2006 (Staff);

Agenda 3168, Item 27 3/2/2006 (Staff)

26

[5350]

In 1994, SCWC sold certain water rights to the City of Folsom without Commission approval. In

2004, the Commission determined that SCWC should have sought approval pursuant to § 851 for the

sale, and ordered SCWC to file such an application. The Commission also found that the ratepayers

paid for the water rights but ordered the retrospective revenues from the sale shared 70% to

ratepayers and 30% to shareholders because the water rights were surplus to SCWC’s needs and

shareholders should be rewarded for the transaction. In this application, SCWC sought § 851

approval of the permanent sale but was unable to show that the water rights would never be needed to

serve its customers. Due to the risk that higher-priced resources would be needed in the future, this

decision holds that the perpetual sale was not in the public interest, and denies § 851 approval.

Similarly, shareholders are not entitled to a reward for this transaction, so the revenues need not be

shared. This proceeding is closed.

(Comr Peevey - ALJ Bushey)

Pub. Util. Code § 311 – This item was mailed for Public Comment.

Pub. Util. Code §1701.1 -- This proceeding is categorized as Ratesetting.

26a

[5351]

This alternate approves Southern California Water Company’s (SCWC) Section 851 application for

the permanent lease of 5,000 AFY of American River water rights to the City of Folsom.  The order

further directs SCWC to record revenues from this lease into a memorandum account as prescribed

by Sections 789 and 790 of the Public Utilities Code.

(Comr Peevey)

27

[5219]

This resolution authorizes Great Oaks Water Company a general rate increase producing an additional

annual revenue of $570,256 or 5.17% for test year 2006-2007. (Advice Letter 173, filed June 24,

2005)

Agenda 3166, Item 17 1/26/2006 (Staff);

Agenda 3168, Item 31 3/2/2006 (Staff)

28

[5106]

R04-09-003 - Order Instituting Rulemaking on the Commission’s own motion for the purpose

of considering policies and guidelines regarding the allocation of gains from sales of energy,

telecommunications, and water utility assets.

This decision adopts a process for allocating gains on sale received by certain electric, gas,

telecommunications and water utilities when they sell utility land, assets such as buildings, or other

tangible or intangible assets formerly used to serve utility customers.  In most cases, utility ratepayers

should receive 75% of the gain, based on our finding that ratepayers bear most of the risk associated

with owning such property.  The utilities’ shareholders should receive the remaining 25% of the gain on

sale. This rule of thumb will apply to routine asset sales where the after-tax sale price is $50 million or

less, or where the gain or loss from the sale is $10 million or less.  Most ordinary asset sales that come

before this Commission for approval should meet these criteria.  The rule we develop here will not

apply where the after-tax asset sale price exceeds $50 million or the gain or loss exceeds $10 million.

The rule also does not apply to utility sales of assets of extraordinary character; sales of nuclear power

plants; where a party alleges the utility engaged in highly risky and non-utility-related ventures; or

where a party alleges the utility grossly mismanaged the assets at issue.

(Comr Brown - ALJ Thomas)

Pub. Util. Code § 311 – This item was mailed for Public Comment.

Pub. Util. Code §1701.1 -- This proceeding is categorized as Quasi-Legislative.

Agenda 3164, Item 57 12/15/2005 (Staff);

Agenda 3166, Item 46 1/26/2006 (Staff);

Agenda 3167, Item 60 2/16/2006 (Chong);

Agenda 3168, Item 32 3/2/2006 (Peevey)

29

[5400]

On January 19, 2006, FERC issued a Notice of Proposed Rulemaking to amend the regulations

governing small power production and cogeneration in response to section 1253 of the Energy Policy

Act of 2005 (EPAct 2005), which added section 210(m) to the Public Utility Regulatory Policies Act

of 1978 (PURPA).  Specifically, FERC seeks comment on the criteria exempting utilities from its

obligation to purchase from qualifying facilities.  The CPUC filed a notice of intervention on February

6, 2006.  Staff seeks the Commission’s authorization to file reply comments, which must be submitted

by March 29, 2006.

30

[5401]

High Cost Fund A.

31

[5392]

32

[5393]

33

[5394]

34

[5395]

35

[5396]

36

[5397]

37

[5398]

38

[5399]

Discussion and action regarding appointment of former Senator Richard Polanco to a public

representative position on the Low Income Oversight Board.

39

[5299]

40

[5301]

San Diego Superior Court No. GIC 857224 - Conference with Legal Counsel - Existing

Litigation

People of the State of California, et al. v. Sempra Energy, et al., San Diego Superior Court  No. GIC

857224

41

[5377]

Disposition of application for rehearing of D04-12-049 filed by Mirant Delta, LLC and Mirant

Potrero, LLC.

D04-12-049 adopted operations standards for electric generating facilities pursuant to Public Utilities

Code Section 761.3.

42

[5380]

R04-04-003 - Disposition of applications for rehearing of D05-10-042 filed by FPL Energy LLC,

Calpine Corporation, and the Independent Energy Producers Association.

In D05-10-042, the Commission implemented Resource Adequacy Requiremnets (RAR) for all load

serving entities (LSEs) in the service territories of the three largest investor-owned utilities.

43

[5387]

I95-04-044 - Related matters. Disposes of the application for rehearing of decision D05-03-028 filed

by Blue Casa Communications, Inc., Wholesale Air-Time, Inc., and nii Communications, Ltd.

D05-03-028 affirms Assigned Commissioner Ruling that denied in part and granted in part motions for

the continuation of the unbundled network element platform.

Consideration of possible Commission initiation of, or intervention in, litigation.

Gov. Code § 11126(e)(2)(C)(i), allows this item to be considered in Closed Session.

45

[5389]

Deliberation on institution of investigation of proceedings or disciplinary actions against persons or

entities under the Commission's jurisdiction.  (Disclosure of case name would fail to protect the private

economic or business reputation of the person or entity if the proceeding or disciplinary action is not

commenced.)

Gov. Code § 11126(e)(2)(C)(i), allows this item to be considered in Closed Session.

Gov. Code § 11126(d)(2), allows this item to be considered in Closed Session.

Significant exposure to litigation

Gov. Code § 11126(e)(2)(B), allows this item to be considered in Closed Session

Consideration of appointment, employment, evaluation of performance, or dismissal of a public

employee or to hear complaints or charges brought against that employee by another person or

employee.

Gov. Code § 11126(a), allows this item to be considered in Closed Session

Significant exposure to litigation in federal agency or court proceedings.

Gov. Code § 11126(e)(2)(B), allows this item to be considered in Closed Session

Consideration of possible Commission initiation of, or intervention in, federal agency or court

proceedings.

Gov. Code § 11126(e)(2)(C)(i), allows this item to be considered in Closed Session.

47

[5409]

Independent Energy Producers Assoc. v. California Independent System Operator Corp., FERC

Docket No. EL05-146.

Conference with Legal Counsel - Existing Litigation; San Diego Gas & Electric Co., EL00-95-000

Gov. Code § 11126(e)(2)(A), allows this item to be considered in Closed Session.