HomeMy WebLinkAboutAgenda Report - January 7, 1998 G-04CITY OF LODI COUNCIL COMMUNICATION
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AGENDA TITLE: Application from PG&E To Increase Base Electric and Gas Revenues Effective January 1,
1999
MEETING DATE: January 7, 1998
PREPARED BY: City Clerk
RECOMMENDED ACTION: Information only, no action required.
BACKGROUND INFORMATION: The City Clerk's Office has received an application from PG&E to increase
base electric and gas revenues effective January 1, 1999 (see copy of
application attached). This is information only, no Council action is required.
FUNDING: None
v �, .
Alice M. Reimche
City Clerk
APPROVED:
H. 134on Flynn -- City Manager,
Pacific Gas and Electric Company
December 17, 1997
Latin Department
77 Beale Street
San Francisco, CA
Telecopier 415/973-5520
sGdn,ce 4d,r,e.s.,
P.O. Box 7442
San Francisco, CA 94120
TO: THE STATE, COUNTY, AND CITY OFFICIALS
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NOTICE OF FILING
APPLICATION FOR A GAS RATE INCREASE AND AN
ELECTRIC REVENUE INCREASE
Pacific Gas and Electric Company (PG&E) filed Application No. 97-12-020 on
December 12, 1997, with the California Public Utilities Commission (CPUC) to increase
PG&E's base electric and gas revenues. If approved by the CPUC after hearings,
increases will become effective January 1, 1999.
What we are requesting
We are requesting that, beginning January 1, 1999, we be allowed to increase our current
electric and gas base revenues. This includes an increase in electric revenues of $693
million, or 10%, and an increase in gas revenues of $501 million, or 25%.
However, under a recent state law, electric rates are frozen until March 31, 2002, or the
date when PG&E's approved transition costs are fully recovered, whichever occurs first.
Therefore, the electric revenue increases requested in this proceeding may affect rates in
the future, but not for several years.
In addition, a recent CPUC decision set gas transmission and storage rates through 2002.
Therefore, customers will not experience an increase in gas transmission and storage rates
as a result of this request. Of the $501 million requested increase in gas base revenues,
we propose that $7 million be recovered in the Customer Class Charge for changes in the
costs of low income conservation and energy efficiency programs. The remaining $494
million will increase gas transportation rates for industrial distribution customers,
residential customers, and commercial customers only. (See Gas Department Table,
below.)
Why we are asking for a revenue change
In this General Rate Case (GRC), we are asking for an increase to our base revenues to
recover the costs of owning and operating facilities and to comply with government
regulations and orders regarding the provision of electric and gas services to our
customers. These costs include all non -fuel operation and maintenance expenses, state
and federal taxes, depreciation associated with plant investments including fossil and
geothermal decommissioning, and the effects of inflation on PG&E's costs. The
requested increase also reflects costs for expenditures required to maintain and enhance
system reliability and provide safe, responsive customer service. The requested increase
does not cover any costs of operating the Diablo Canyon Nuclear Power Plant, except
that it does include costs associated with nuclear decommissioning.
TO: THE STATE, COUNTY, AND CITY OFFICIALS
December 17, 1997
Page 2
The effect on residential customers
If the CPUC approves our request, average residential gas bills for customers who use 30
therms of natural gas per month during summer and 100 therms per month during winter
would increase by $5.16 a month in summer, from $19.16 to $24.31, and by $17.15 per
month in winter, from $63.73 to $80.88. Individual bills will vary from this example,
depending on how much energy is used.
For residential electric bills, the overall electric rate is decreasing by 10 percent on
January 1, 1998, and then will be frozen at this lower level for several years, in
accordance with state law and CPUC orders. PG&E's overall electric rate consists
mainly of two types of costs: General Rate Case costs and transition costs, which result
from the restructuring of the electric industry to a competitive generation supply market.
If the CPUC authorizes our requested increase, then there will be less revenue left over to
cover transition costs.
How the rate change will be apportioned
As stated before, rates for electric customers will not change as a result of this request.
According to established CPUC policies, the overall bundled rate change to gas distribution
will be divided among customer classes as shown below. The different rates for various
classes reflect the fact that the costs of serving some classes are higher than others.
Gas Department
Proposed Revenue Changes*
Changes In Annual Revenue
Class of Service Revenues Change
($OOOs) Percent
Residential 363,889 27.7%
Small Commercial 116,277 34.1%
Large Commercial 2,718 12.7%
Industrial Distribution 16,572 38.6%
Industrial Transmission 289 0.3
Electric Generation
647
1.0
Cogeneration
299
1.0
Wholesale
8
0.6
Total Change From Authorized
1997 Revenues
500,699
25%
*The allocation of the increased revenue for each customer class will be determined in a
future proceeding, known as the Biennial Cost Application Proceeding
TO: THE STATE, COUNTY, AND CITY OFFICIALS
December 17, 1997
Page 3
Attrition rate adjustment request for 2000 and 2001
The CPUC allows PG&E to make a general base (non -fuel) rate change request every
' three years. To help cover expected cost increases beyond 1999, PG&E has requested
that electric and gas base revenues be further increased on January 1, 2000, by $148
million and $30 million (or 2 and 1 percent), respectively. PG&E also asks that electric
and gas base revenues be increased on January 1, 2001, by $120 million and $27 million
(or 2 and 1 percent), respectively. The amount of the rate change for each customer class
will be determined in future proceedings.
Public hearings
Before acting on our Application, the CPUC will hold public participation hearings in the
Spring of 1998 to provide customers an opportunity to express their views. The CPUC
welcomes the public's participation. When dates, times, and locations of these hearings
have been scheduled, we will send notices in future customer bills.
Those people who cannot attend a hearing may submit written comments to the CPUC at
the address listed below. All such correspondence to the CPUC should include a
reference to PG&E's Application No. 97-12-020.
Formal evidentiary hearings on PG&E's Application will also be held in the Spring of
1998. At these hearings, the CPUC will receive the testimony of PG&E, the CPUC's
Office of Ratepayer Advocates, and other interested parties.
Parties at these hearings may offer proposals to the CPUC which differ from those
requested by PG&E. In addition, during the proceedings, updated information may be
introduced that could change the amount of the revenues requested. After considering all
proposals presented during the formal hearing process, the CPUC will issue a decision.
Rates adopted by the CPUC may differ from those requested by PG&E, and may result in
an increase or decrease in individual rates.
Anyone interested in participating in this proceeding and needing advice or more
information, including information on the hearings, or wishing to obtain copies of the
Office of Ratepayer Advocates' rate proposals, when they are available, may write to:
The Public Advisor
California Public Utilities Commission
505 Van Ness Avenue, Room 5303
San Francisco, CA 94102
or
Via electronic mail to:
public.advisor@cpuc.ca.gov
All such correspondence should reference PG&E's Application No. 97-12-020. These
letters will be sent to the Commissioners and become part of the formal correspondence
file for this Application. Please indicate if you would like a written response to your
inquiry; otherwise no reply will be sent.
TO: THE STATE, COUNTY, AND CITY OFFICIALS
December 17, 1997
Page 4
For further information
If you have additional questions about this filing you may write to:
F�n Pacific Gas and Electric Company
P.O. Box 7442
San Francisco, CA 94120
Attention: General Rate Case,
Application No. 97-12-020.
A copy of our Application and related exhibits may be reviewed at PG&E's corporate
headquarters (77 Beale Street, Room 3120, San Francisco, CA 94105), at any of our
division offices, or at the San Francisco office of the CPUC.
The State, counties, and municipal corporations, and any other parties interested in the
above-mentioned filing, can obtain a copy of Application No. 97-12-020 and related
exhibits upon written request to Lise H. Jordan, Pacific Gas and Electric Company, 77
Beale Street, Mail Code B30A, San Francisco, CA 94105.
This notice is given in accordance with the requirements of the California Public Utilities
Commission.
PACIFIC GAS AND ELECTRIC COMPANY
LISE H. RDAN