SAN FRANCISCO–The California Public Utilities Commission (CPUC) Thursday issued two proposals that would set the amount that Pacific Gas and Electric Company (PG&E) is authorized for operating and providing gas transmission and storage services to its customers.
In balancing the costs to customers with the need for safety related expenditures, the Proposed Decision and Alternate Proposed Decision would adopt a 2015 revenue requirement for PG&E of $944.984 million, a more than 47 percent decrease from the amount requested by PG&E. The proposed 2015 revenue requirement represents an increase of 32.1 percent over 2014 authorized gas transmission and storage rates. The average residential customer would see an average increase of 10.7 percent over current monthly gas rates.
The Proposed Decision and Alternate Proposed Decision also propose an allocation of the $850 million in shareholder funding for safety related improvements ordered as part of the penalties adopted by the CPUC in connection with PG&E’s 2010 pipeline rupture in San Bruno (D.15-04-024). If accepted by parties, this would result in an adopted 2015 revenue requirement of $858.531 million, or a 20 percent increase over 2014 gas transmission and storage rates. In this scenario, the average residential customer would see an average increase of 9.9 percent over current monthly gas rates.
As a result of a 5 month delay in the proceeding caused by PG&E’s violation of ex parte rules, PG&E shareholders would be responsible for $164.003 million associated with the delay. That shareholder funding is already reflected in the 2015 revenue requirement.
No decision is effective until approved through a vote of the CPUC’s Commissioners. Parties have opportunities to provide formal comments on the Proposed Decision and Alternate Proposed Decision, and a public All-Party Meeting to discuss the proposals will be scheduled.
The Proposed Decision and Alternate Proposed Decision ensure that needed system safety improvements are made, including by authorizing ratepayer funding in 2015 as follows:
· $59.236 million in capital expenditures for in-line inspection to make approximately 135 miles of transmission pipeline piggable.
· $23.500 million in expenses and capital expenditures for Direct Assessment programs to evaluate internal, external, and stress-related corrosion threats to transmission pipelines. In addition, PG&E shareholders will fund $20.643 million for these Direct Assessment programs.
· $148.390 million in expenses to test the yield strength of approximately 170 miles of transmission pipe for manufacturing defects, to validate the integrity of pipeline, and to assure a margin of safety for pipelines lacking documented strength tests.
· $164.534 million in capital expenditures to replace approximately 60 miles of vintage pipe.
· $52.502 million in capital expenditures to automate and upgrade 38 gas shut-off valves for emergency response.
· Capital expenditures of $41.292 million and expenses of $90.070 million for corrosion control programs in the transmission system.
(The above amounts are before the proposed allocation of the shareholder-funded safety improvements called for in D.15-04-024.)
The CPUC would ensure that PG&E allocates the funds as outlined above by ratemaking mechanisms, enforceable CPUC orders, and compliance reporting.
The Alternate Proposed Decision differs from the Proposed Decision in that it would order PG&E to provide additional information concerning its gas storage facilities in light of the methane leak at the Aliso Canyon Gas Storage Facility. PG&E would be ordered to report on its gas storage risk management and safety initiatives.
The Proposed Decision and Alternate Proposed Decision will come before the CPUC’s Commissioners for consideration and vote. The earliest opportunity to do so is at the CPUC’s June 9 Voting Meeting.
