HomeMy WebLinkAboutAgenda Report - July 16, 1997 (47)CITY OF LODI COUNCIL COMMUNICATION
AGENDA TITLE: Notice from Pacific Gas and Electric of Updated Application for Performance -Based
Ratemaking for Electric Generation.
MEETING DATE: July 16, 1997
PREPARED BY: City Clerk
RECOMMENDED ACTION: Information Only
BACKGROUND INFORMATION: The City Clerk's Office has received an official notice from Pacific Gas and
Electric regarding an Updated Application for Performance -Based
Ratemaking for Electric Generation. This notice is being provided to all state,
county and local officials for the purpose of information only. No Council
action is required.
FUNDING: None
Alice M. Reimch
Acting City Clerk
90 APPROVED:
H. Q xon Flynn -- City Manan r 1
Pacific Gas and Electric Company
June 19, 1997
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P.O. Box 7442
San Franusca. CA 94120
.STREET/t O EWER d DDR.ESS
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77 Beale Street, 630A
San Francisco, CA 94105
415,,'973-2768
fax=15/?73-0516
TO STATE, COUNTY AND CITY OFFICIALS:
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Attorne,r a:.a::
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Notice of Updated Application for Performance -Based
Ratemaking for Electric Generation
On July 15, 1996, Pacific Gas and Electric Company (PG&E) filed its Application to
Adopt Performance -Based Ratemaking (PBR) for Electric Generation (A. 96-07-018) to
comply with California Public Utilities Commission (CPUC) Decision 95-12-063.
PG&E proposed a PBR mechanism for our hydroelectric and geothermal power plants
but did not include a specific revenue change request. On June 11, 1997, PG&E updated
the application to include the revenue change request.
The updated application asks the CPUC to authorize an electric revenue increase of 56.6
million. effective in 1998. This increase is based on an index for inflation and
pruductivity applied to the 1997 hydroelectric and geothermal base revenue requirement
proposed in PG&E's Cost Separation Application (A. 96-12-009). However, under a
recent stare law, PG&E's current electric rates cannot increase until the earlier of March
31.'_002. or when the CPUC -authorized costs for utility generation -related assets and
obligations that may become uneconomic as a result of a competitive generation market
(transition costs) have been fully recovered. The period when utility generation -related
transition costs «'ill be recovered is called the transition period.
Because overall electric rates are frozen durinQ the transition period, if PG&E recovers
56.6 million in 1998 under its PBR proposal, recovery of 56.6 million in transition costs
%ill be delayed until a future period. if PG&E is unable to recover this S6.6 million in
transition costs by March 31. 2002. PG&E's shareholders will bear that cost. However,
r2tepa%'e75 will pay that cost if PG&E is able to recover all of its transition costs by ivlarch
31. 3002. In either case, electric rates %%-ill not change until the end of the transition
period.
PG&E's proposed PBR mechanism provides financial incentives for PG&E to operate its
by roel.ctr is and geothermal power plants efficiently and consists of a base revenue
anlVuni that is indexed for inflation. minus an offset for productivity. The mechanism
includes adjustments for shared eamings and extraordinary costs or savings. PG&E
Notice to Government Officials
June 19, 1997
Page 2
proposes to recover its actual variable energy costs associated with hydroelectric and
geothermal generation separate from the PBR mechanism.
NEARING ON PROCEEDINGS
Before acting on this application, the CPUC will hold oral argument commencing at 2:00
p.m. on Monday, June 23, 1997, to determine whether this proceeding should continue or
be deferred. If the Commission determines to proceed it will hold evidentiary hearings,
expected to begin in September 1997. At these hearings, which are open to the public,
the CPUC will receive the testimony of PG&E, the CPUC's Office of Ratepayer
Advocates and other interested parties. Participants at these hearings may offer proposals
that differ from those of PG&E.
After considering these proposals, the CPUC will issue a decision. The actual plan
adopted by the CPUC may differ from what PG&E has requested.
If you want to participate in the hearings or send comments, if you need advice or more
information, or if you want to t?et copies of the Office of Ratepayer Advocates' rate
proposals when they are available, please wTite to:
The Public Advisor
California Public Utilities Commission
305 Van Ness Avenue, Room 5303
San Francisco, CA 94102
or via electronic mail to:
publ ic.advisor acpuc.ca.gov
itlention that you are writing about Application 96-07-018 and indicate if you would like
a «Tirten response. otherwise no reply will be sent. Your letter v6ll be sent to the
Commissioners and will become pan of the formal correspondence file for this
application.
FOR FURTHER I:. FORMATIO
�'ou can Qet more information from PG&E by -writing PG&E. P,O. Box 7442, San
Francisco. CA 94120. ''Attention: Application 96-07-018."
You mai• revitw a copy of this application at our corporate headquarters (77 Beale Street,
Room 3120. San Francisco, CA 94105), at the San Francisco office of the CPUC or in
PG&E's main business offices in the following locations: auburn, Bakersfield, Belmont,
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Notice to Government Officials
June 19, 1997
Page 3
Chico, Concord, Cupertino, Hayward, Merced, Oakland, Sacramento, Salinas, San
Francisco, San Jose, San Luis Obispo, San Rafael, Santa Rosa and Stockton.
This notice is given in accordance with the requirements of Rule 24 of the CPUC's Rules
of Practice and Procedure.
PACIFIC GAS AND ELECTRIC CUMPANY
By:
LL AM H. EDWARDS
Attorney
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