ML19308B986
| ML19308B986 | |
| Person / Time | |
|---|---|
| Site: | Crane  |
| Issue date: | 06/05/1979 |
| From: | Bryson J, Gravelle R, Sturgeon V CALIFORNIA, STATE OF |
| To: | |
| References | |
| TASK-TF, TASK-TMR M-4706, NUDOCS 8001170727 | |
| Download: ML19308B986 (2) | |
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PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA San Francisco, California Date:
Resolution No.:
M-4706 I
RESQLUTlpd l
Recognizing that regulatory lag was a s'ubstantial problem confront-
,3 ing the regulatory process, the Commission adopted the Regulatory
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Lag Plan for Maj or Utility General Rate Cases (Plan) by Resolution g
Ho, A-469 3, dated July 6,1977.
That Plan superseded any conflict-
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ing provisions of the Commission's Rules of Practice and Procedure
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purs uant to Rule 87 of those Rules.
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i The Commission 's commitment to eliminate unnecessary regulat ory jh delay continues.
Having gained experience with the processing
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of rate increase applications by the maj or utilities subject to the I
Plan (see Appendix A of the Plan attached to this Resolution), it pS l
1s appayent that modifications will make the Plan more workable and I (71 l
b ett er. $,ns ure that regulatory delay is minimized, while providing
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an administrative forum that affords fairness to all.
The Plan may g
be further modified as still more experienc-e is gained and reasonable 1q constructive modifications become apparent.
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The Executive Director of the Commission by letter of December 20, h
1976 invited interested part$ es to submit suggested modifications R
to the Plan, and a public meeting was held on January 19, 1979
- f in San Francisco.
Nume rous oral and written comments and recom-g nendations were received from utilities, the Commission staff, and t
interested parties who participate in the regulatory process.
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- N The most significant modification to the Plan which is adopted 4
herein (but which is a policy already implemented ^1n general rate I
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decisions in 1978 for Southern California Gas Company, Southern s u California Edison Company and Southwest ; Gas Corporation) is that j
t the proposed test year used in a notice lof intention (NOI) shall j
l not be less than two years inclusive from the last adopted test
.I h year used in setting the utility's existing rates.
For example, i j %
4 if 1980 is the last adopted test year, the next test year to be 3
submitted in an NOI would be no earlier than 1982.
This modifi-1 )
cation is reasonable.
It has caused no substantive problems for pl the three utilities listed above.
Specifically, the modificatio y
does not impede or interfere with the many administrative remedies
' y available to utilities that insure a means of protecting their
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financial integri.ty.
The Commission has established offsetting i
procedures, with balancing accounts, for energy expense fluctua-a tion, which guarantee utilities will be made whole for prudently p f g
incurred energy expenses.
Also, the Commission has established C
j a Supply Adjustment Mechanism (with a balancing account) so that if the volume of gas sales drops below the base volumes adopted
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- (i in the last general rate proceeding, the' utility will be made a.
8001170 72 7
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y whole.
Fi nally, utilities may always request emergency interim relief if a financial emergency exists because of a sudden, s igni fi c an t, an d un fo rs een ch an ge in operating conditions.
Given the above procedures and options, California's utilities today face far fewer risks than formerly with respect to maintaining a relatively stable cash flo...
The Cor=ission is not staffed to procese rate applications for the maj or utilities with back-to-back test years.
The modifica-ticn providing for alternate test years is consistent with the Commi s s i on 's original intention to have a decisin '-to lua a p icr t.o th e s t art of the test yehr (assuming a timely and complete 61
" fin nc).
In orde r for Lne Oommission to successfully implement the plan, and have a reasonable ' opportunity to have new rates adopted at the start of the test year, maj or utilitier cannot be continuously and simultaneously before the Conmission.
Where fore, purs uan t to Rule 87 of the Commi ss ion 's Rules of Practice md Procedure, the Commission concludes that the at tached Re gul at ory Lag P3an for Maj or Utility General Rate Cases should be adopted,
- cn an experimental br is, e f fe ct ive immediately (s uperseding the Tlan adopted by Resolution Ilo. A-4693).
The attached adopted Plan dall apply to the utilities prospect ively.
The pending pro-ceedings for general rate relief filed by the San Diego Gas &
Ele ct ri c Company, Pacific Gas arid Electric Company, The Pacific Telephone and Telegraph Company and General Telephone Company of Jursuant to the existing Plan, i
Cali fornia chculd be processed nder which they were filed.
IT IS ORDERED that :
The Ee gulat ory Lag Plan for Maj or Utility General Rate Cases att ached here to is adopted, on an experimental basis, to apply prospectively to applications for general rate relief, until further order or resolution of the Commission.
Pending proceedings filed and processed pursuant to the Plan adopted by Re solut ion so. A 4693 shall continue to be processed in accordance with that F] an.
The adopted Plan shall supersede the existing Rules of Practice and Procedure wherever lin conflict with those Rules.
The ef fective date of this resolution is the date hereof.
I hereby certify that the foregoing resolution was duly introduced ar.d adopted at a regular confere'nce of the Public Utilities Conmi ssion of the State of California, held on the 5th day
' of June 1979, the following Commissioners voting favorably t thereon:
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f JCIIN E. 3RYSON Pn siowt 7
- VERNON L STURGEON Acting Executive Director lilCilARD D. GRAVELLE Public Ut111t;1ks' Commission
} CtA!RE T. DEDRICK St'ati 'of California i LEONARD M. GRIMES, H1, Commissioners 6
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