BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA ) ) ) ) ) ) REPLY BRIEF OF SOUTHERN CALIFORNIA EDISON COMPANY (U 338-E)

Transcription

1 BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA Application of Southern California Edison Company (U 338-E) for Authorized Cost of Capital for Utility Operations for 2008 And Related Proceedings. ) ) ) ) ) ) A (Filed May 8, 2007) A A REPLY BRIEF OF SOUTHERN CALIFORNIA EDISON COMPANY (U 338-E) MICHAEL D. MONTOYA LAURA I. GENAO Attorneys for SOUTHERN CALIFORNIA EDISON COMPANY 2244 Walnut Grove Avenue Post Office Box 800 Rosemead, California Telephone: (626) Facsimile: (626) laura.genao@sce.com Dated: February 21, 2008 LAW#

2 REPLY BRIEF OF SOUTHERN CALIFORNIA EDISON COMPANY (U 338-E) Table Of Contents I. INTERVENORS OPPOSE MULTI-YEAR MECHANISMS FOR THE WRONG REASONS...2 A. There Is No Evidence That Current California ROEs Are Too High...2 B. DRA s Factual Assertions Demonstrate A Fundamental Failure To Understand The Proposed Multi-Year Mechanisms...3 II. DRA S PROPOSED BIENNIAL MECHANISM IS INADEQUATE...4 III. IV. AGLET/TURN/UCAN S OPPOSITION TO SCE S PROPOSED CAPITAL STRUCTURE FEATURES HAS NO FOUNDATION...5 VARIOUS MECHANISM FEATURES PROPOSED BY AGLET/TURN/UCAN ARE INAPPROPRIATE AND SHOULD NOT BE USED...6 A. The Ten-Year Treasury Rate Should Not Be Used...6 B. The Ratio Of ROE Changes To Interest Rate Index Changes Should Be 0.7 As Proposed By SCE...7 V. SCE S PROPOSED CHANGES TO THE COST OF CAPITAL SCHEDULE ARE REASONABLE AND SHOULD BE ADOPTED...7 A. Aglet/TURN/UCAN s Claim That An Earlier Filing Date Would Force The Applicants To Rely On Older Financial Data Is Incorrect...7 B. Aglet/TURN/UCAN s Own Intervenor Compensation Requests Contradict Aglet/TURN/UCAN s Objection To SCE s Proposed Schedule...8 VI. CONCLUSION...10 APPENDIX A EXCERPT FROM ATTACHMENT A TO AGLET-TURN INTERVENOR COMPENSATION REQUEST, A , ET AL. APPENDIX B EXCERPTS FROM ATTACHMENT A TO AGLET-TURN-UCAN PHASE I INTERVENOR COMPENSATION REQUEST, DATED FEBRUARY 19, 2008 i

3 REPLY BRIEF OF SOUTHERN CALIFORNIA EDISON COMPANY (U 338-E) Table Of Authorities CPUC DECISIONS D D D D D i

4 BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA Application of Southern California Edison Company (U 338-E) for Authorized Cost of Capital for Utility Operations for 2008 And Related Proceedings. ) ) ) ) ) ) A (Filed May 8, 2007) A A REPLY BRIEF OF SOUTHERN CALIFORNIA EDISON COMPANY (U 338-E) Pursuant to Rule of the Rules of Practice and Procedure of the California Public Utilities Commission ( CPUC or Commission ) and the oral ruling of Administrative Law Judge Michael Galvin, issued January 29, 2008, Southern California Edison Company ( SCE ) responds to the opening brief of the CPUC s Division of Ratepayer Advocates ( DRA ) and the combined opening brief of the coalition comprised of Aglet Consumer Alliance, The Utility Reform Network, and the Utility Consumers Action Network ( Aglet/TURN/UCAN or Coalition ). SCE s primary recommendation in this phase of the proceeding is that the CPUC retain the existing annual cost of capital proceeding for SCE. 1 For the reasons previously discussed in SCE s Opening Brief, such annual proceedings should be continued for SCE. 2 However, in the event that the CPUC determines that a multi-year mechanism is more appropriate at this time, SCE and its customers would be best served by a mechanism that includes certain capital structure and rate of return features. 3 In this reply brief, SCE reiterates the reasons for these 1 See SCE/Hunt, Ex. 4, 44: SCE Opening Brief, p SCE Opening Brief, pp

5 positions and addresses the flaws in intervenors arguments regarding a multi-year mechanism, the inappropriateness of DRA s proposed biennial mechanism, and the lack of foundation for Aglet/TURN/UCAN s opposition to SCE s proposed capital structure mechanism. Additionally, SCE addresses why the CPUC should reject various mechanism features proposed by Aglet/TURN/UCAN. To the extent SCE does not reiterate arguments articulated previously in its Opening Brief, filed February 13, 2007, it incorporates those fully by reference herein. I. INTERVENORS OPPOSE MULTI-YEAR MECHANISMS FOR THE WRONG REASONS While SCE agrees with Aglet/TURN/UCAN s preference for annual proceedings, SCE disagrees with the Coalition s rationale for preferring annual proceedings. Contrary to Aglet/TURN/UCAN s factual assertions, current returns on equity ( ROEs ) are not too high and somehow a reason to preclude consideration of a multi-year mechanism. A. There Is No Evidence That Current California ROEs Are Too High Aglet/TURN/UCAN asserts that authorized levels of returns are unreasonably high for California energy utilities. 4 The Coalition claims that because such returns are out of touch with national trends of authorized returns, they do not reflect reduced regulatory risk in California, and, therefore, should be examined every year. 5 To do otherwise, Aglet/TURN/UCAN asserts, would be unreasonable. 6 This argument is inappropriate and factually incorrect. The CPUC should reject Aglet/TURN/UCAN s assertion that the CPUC has authorized unreasonably high returns. Decision No is legally appropriate. As parties to the proceeding recognize, the CPUC issued its decision after careful factual presentation and 4 Aglet/TURN/UCAN Opening Brief, p Aglet/TURN/UCAN Opening Brief, p Aglet/TURN/UCAN Opening Brief, p. 2. 2

6 deliberation with full opportunity for all parties to be heard and all testimony and recommendations to be examined. 7 Further, CPUC rules and California law permit the Coalition to present arguments for review of the decision if it believes it to be legally inappropriate. Aglet/TURN/UCAN has not done so and therefore should be precluded from repeatedly questioning the reasonableness of that CPUC s decision in this phase of the 2008 proceeding. In Phase I, the CPUC examined SCE s authorized ROE with respect to the standards of capital attraction, financial soundness, comparability and creditworthiness, 8 as it has three times in the preceding five years. On each occasion, the CPUC has authorized returns for SCE that have varied by only 20 basis points. 9 The numerous evaluations and the consistency of the CPUC s decisions directly refute any claim that the authorized returns are unreasonably high. The CPUC is vested with the authority and process for determining the reasonableness of returns for California utilities and it has done so in a consistent manner for several cost of capital cycles, weighing all the evidence presented by the parties. Accordingly, the Coalition s current claim to the contrary should be rejected. B. DRA s Factual Assertions Demonstrate A Fundamental Failure To Understand The Proposed Multi-Year Mechanisms DRA asserts that had interest rate changes of the magnitude of the adjustments for business and regulatory risk the CPUC adopted in Decision No occurred in an automatic adjustment mechanism with deadbands, hearings would have been triggered. 10 DRA s assertion is incorrect. No party to this proceeding has proposed a mechanism that calls for hearings when interest rate index changes exceed an adopted deadband. Instead, what parties have called for is automatic adjustment mechanisms that allow for automatic changes to returns when objective 7 SCE/Hunt, Tr. 824: See SCE/Boada, Ex. 4, 2:12-3:3. 9 SCE/Hunt, Ex. 74, p DRA Opening Brief, pp

7 benchmarks change. 11 DRA s fundamental misunderstanding of the proposed automatic mechanisms should weigh against considering its objections to such a mechanism. II. DRA S PROPOSED BIENNIAL MECHANISM IS INADEQUATE In the absence of CPUC desire for continuation of annual cost of capital proceedings, DRA urges the CPUC to adopt a biennial cost of capital mechanism. 12 DRA s suggestion should be rejected for failing to address what happens if financial market conditions change dramatically. Specifically, DRA uses as the basis for its support of a biennial mechanism the fact that there were no complaints associated with skipping the annual proceeding in DRA ignores that the CPUC s stated reason for skipping the annual proceeding in 2006 was that the conditions that would influence cost of capital decision had experienced little change. 14 Accordingly, it was not the lack of controversy regarding cost of capital that led the CPUC to allow a waiver in 2006; rather it was the lack of volatility in market conditions at that time. DRA s proposal is silent on what recourse California s utilities have if financial market conditions change significantly between the years in which it proposes that proceedings be held. This void is significant and requires the CPUC to seriously consider the capital structure and rate of return features that SCE has set forth as essential to any multi-year program. 11 SCE Opening Brief, pp DRA Opening Brief, p DRA Opening Brief, p D , Findings of Fact 5-10, 12,

8 III. AGLET/TURN/UCAN S OPPOSITION TO SCE S PROPOSED CAPITAL STRUCTURE FEATURES HAS NO FOUNDATION The Coalition strongly oppose[s] SCE s request for capital structure flexibility on the grounds that capital structure changes cannot be considered outside of cost of capital proceedings where all factors relevant to cost of capital can be reviewed. 15 At the same time, the Coalition asserts that SCE s request for capital structure flexibility is inappropriate because it is not being considered in the context of SCE s holding company proceeding. 16 These two reasons directly contradict each other and should be rejected. SCE was previously authorized capital structure flexibility in its performance-based ratemaking proceeding, hand in hand with a multi-year cost of capital mechanism. The CPUC did not find it necessary to reopen the holding company proceeding in that instance. 17 Furthermore, as SCE notes below, the CPUC through its cost of capital proceedings is allowed to determine a reasonable capital structure and should continue to do so as SCE recommends. As the CPUC is aware, and the Coalition cites, the capital structure requirement for SCE is to maintain a balanced capital structure consistent with that determined to be reasonable by the Commission in its most recent decision on the utility s capital structure. 18 SCE s request for capital structure flexibility does no more or less than call upon the CPUC to determine that its actual ratemaking ratio be allowed to vary by up to three percent from the authorized ratemaking ratio. SCE requests this in the CPUC s authorized cost of capital proceeding. As SCE has noted, such flexibility is equivalent to the capital structure flexibility authorized for SCE while its performance-based ratemaking mechanism was previously in effect. 19 Because the CPUC, through its authority over the cost of capital proceeding, has the 15 Aglet/TURN/UCAN Opening Brief, pp Aglet/TURN/UCAN Opening Brief, p See D D , Ordering Paragraph 9, cited by Aglet/TURN/UCAN Opening Brief, p SCE/Hunt, Ex. 4, 46:

9 discretion to determine the reasonableness of any capital structure proposals, the Coalition s suggestion that adoption of SCE s proposed mechanism would somehow defy due process should be rejected. IV. VARIOUS MECHANISM FEATURES PROPOSED BY AGLET/TURN/UCAN ARE INAPPROPRIATE AND SHOULD NOT BE USED Aglet/TURN/UCAN s primary recommendation in this phase is the same as SCE s primary recommendation: preserve the existing annual cost of capital proceeding. 20 Also like SCE, Aglet/TURN/UCAN proposes a multi-year mechanism, should the CPUC decide to adopt one. 21 The Coalition s opposition to capital structure flexibility is discussed above. The CPUC should reject the two other features of Aglet/TURN/UCAN s proposed mechanism: (1) the use of the ten-year Treasury rate, and (2) the 0.5 ratio between changes in the authorized return on equity and changes in the interest rate index. A. The Ten-Year Treasury Rate Should Not Be Used The ten-year Treasury is a risk-free rate, as even Aglet/TURN/UCAN admits, and does not reflect utility business risks. 22 In the context of the Capital Asset Pricing Model ( CAPM ), it does not account for either beta or the market risk premium, integral parts of how the CAPM accounts for risk. 23 A risk-free rate does not appropriately track changes in the cost of risky equity and should not be used to calibrate a multi-year cost of capital mechanism Aglet/TURN/UCAN Opening Brief, p Aglet/TURN/UCAN Opening Brief, p Aglet/TURN/UCAN/Weil, Ex. 67, p SCE/Hunt, Ex. 74, p At the present time, using a Treasury rate may disadvantage customers. As noted in Phase I, financial turmoil in 2007 caused the spread between Treasury rates and utility bond rates to widen significantly. SCE/Hunt, Ex. 5, pp When these spreads normalize, Treasury rates are likely to rise relative to utility bonds and a mechanism calibrated on a ten-year Treasury rate will be more likely to benefit shareholders, simply as a result of market distortions disappearing. A properly designed mechanism using utility bond rates will reduce the potential for such distortions. 6

10 B. The Ratio Of ROE Changes To Interest Rate Index Changes Should Be 0.7 As Proposed By SCE SCE chose a ratio of 0.7 between changes in authorized ROE and interest rate index changes in its proposed multi-year mechanism. This ratio is a closer match to the one-for-one sensitivity to sustained long-run changes in interest rates, and just above the one-half to twothirds ratio that the CPUC uses to adjust authorized ROE. 25 The CPUC should adopt SCE s ratio, not Aglet/TURN/UCAN s 0.5 ratio. V. SCE S PROPOSED CHANGES TO THE COST OF CAPITAL SCHEDULE ARE REASONABLE AND SHOULD BE ADOPTED Cost of capital applications have become much more complex and contentious since the CPUC adopted the original schedule for cost of capital applications in the Rate Case Plan decision. 26 As an example, rebuttal testimony, which was not even included in the Rate Case Plan schedule, is now commonplace. 27 A. Aglet/TURN/UCAN s Claim That An Earlier Filing Date Would Force The Applicants To Rely On Older Financial Data Is Incorrect The Coalition claims that SCE s proposed earlier filing date would force the applicant utilities to rely on older financial data. 28 SCE disagrees. SCE s proposed filing date is the third Tuesday in April. 29 In preparing its testimony for Phase I of this application, SCE s Discounted Cash Flow modeling used data ending in March 2007, and SCE s CAPM estimates used beta values calculated by Value Line and published on or before March 30, SCE s historical 25 SCE/Hunt, Ex. 4, pp SCE/Hunt, Tr. 823:23-824:8. 27 SCE/Hunt, Tr. 822: Aglet/TURN/UCAN Opening Brief, p SCE/Hunt, Ex. 74, Table VI SCE/Hunt, Ex. 4, pp. 30, 38. 7

11 risk premium estimates rely on annual data. 31 Where SCE s filing relied on interest rate projections, SCE employed April 2007 Global Insight interest rate projections, 32 which are available in early April. In general, an earlier filing date will not result in important financial modeling data becoming more stale. 33 B. Aglet/TURN/UCAN s Own Intervenor Compensation Requests Contradict Aglet/TURN/UCAN s Objection To SCE s Proposed Schedule Aglet/TURN/UCAN complains about SCE s comments regarding the time required by intervenors to prepare their reports in cost of capital applications, claiming that there is no support for SCE s comments. 34 Support for SCE s assertions is found in Aglet/TURN s own intervenor compensation request ( 2006 Compensation Request ) in A , et al., SCE s application for a 2006 cost of capital. SCE has attached a portion of Attachment A to that request as Appendix A to this reply brief. 35 According to the 2006 Compensation Request, the first work performed by Aglet/TURN in A , et al. was done on June 11, Intervenor testimony was due on August 8, 2005 in A , et al., days later. SCE s proposed schedule affords intervenors 70 days from the date of applicants filing until intervenor testimony is due, 37 nearly two weeks more time than Aglet/TURN required in A , et al. SCE notes that in considering Aglet/TURN s intervenor compensation request in A , et al., the CPUC found that Aglet/TURN made substantial contributions to the CPUC s decision in the case. 38 There is no 31 SCE/Hunt, Ex. 4, Appendix E. 32 SCE/Hunt, Ex. 4, p. 39, Appendix D. 33 SCE recognizes that to the extent that financial model estimates rely on actual data as of the filing date or shortly before, such as actual interest rates, such data will be slightly older at the time of submission of the case with an earlier filing date. However, SCE does not believe that this is a serious problem and it is more than offset by the advantages of SCE s proposed schedule revisions. 34 Aglet/TURN/UCAN Opening Brief, p SCE requests that the CPUC take official notice of the contents of Appendix A for the limited purpose of verifying the dates related to Aglet/TURN s participation in A , et al. 36 A , et al., Assigned Commissioner s Scoping Memo and Ruling, dated June 22, 2005, p SCE/Hunt, Ex. 74, Table VI D , mimeo, Finding of Fact 1, p

12 evidence that only taking 59 days to prepare its testimony hampered Aglet/TURN in A , et al. In the instant case, subsequent to submitting its Opening Brief in this phase, on February 19, 2008, Aglet/TURN/UCAN submitted an intervenor compensation request regarding its work in Phase I ( Phase I Compensation Request ). In the Phase I Compensation Request, Aglet/TURN/UCAN requested compensation for several individuals. Attachment A to the Phase I Compensation Request contains detailed time records regarding the work of these individuals, and SCE has attached portions of that Attachment A as Appendix B to this brief. 39 SCE filed its application in Phase I on May 8, Attachment A to the Phase I Compensation Request indicates that there was an initial discussion on that day, lasting one-half hour, 40 and an initial conference call to discuss resources on May 11, 2007, lasting approximately one-half hour. 41 After this date, the first work done by any of the Coalition s representatives was recorded by Mr. Czahar on June 5, This appears to have been when the Coalition began actual analysis and work on the case, 64 days before intervenor testimony was due. The Coalition only required 65 days to complete its work in Phase I, so once again, an allowance of 70 days would have been sufficient. 43 Contrary to Aglet/TURN/UCAN s claims, the evidence clearly indicates that SCE s proposed schedule for cost of capital applications is reasonable, and an improvement over the schedule established in the Rate Case Plan decision. 39 SCE requests that the CPUC take official notice of the contents of Appendix B for the limited purpose of verifying the dates discussed herein. 40 Attachment A-5, p Attachment A-1, l. 14. Attachment A-5, p Attachment A-4, p SCE notes that the Coalition submitted no pleading indicating that it needed a delay to complete the report that it submitted on August 8, Of course, whether the Coalition s work in this case merits intervenor compensation is entirely a different matter. 9

13 VI. CONCLUSION For all of the foregoing reasons, the CPUC should retain an annual cost of capital cycle of SCE. If, however, the CPUC chooses to endorse a multi-year mechanism, SCE s proposed capital structure and rate of return features should be adopted. Respectfully submitted, MICHAEL D. MONTOYA LAURA I. GENAO /S/ LAURA I. GENAO By: Laura I. Genao Attorneys for SOUTHERN CALIFORNIA EDISON COMPANY 2244 Walnut Grove Avenue Post Office Box 800 Rosemead, California Telephone: (626) Facsimile: (626) laura.genao@sce.com February 21,

14 Appendix A Excerpt From Attachment A To Aglet-TURN Intervenor Compensation Request, A , et al.

15 A-1

16 A-2

17 Appendix B Excerpts From Attachment A To Aglet-TURN-UCAN Phase I Intervenor Compensation Request, Dated February 19, 2008

18 B-1

19 B-2

20 B-3

21 B-4

22 B-5

23 B-6

24 B-7

25 CERTIFICATE OF SERVICE I hereby certify that, pursuant to the Commission s Rules of Practice and Procedure, I have this day served a true copy of REPLY BRIEF OF SOUTHERN CALIFORNIA EDISON COMPANY (U 338-E) on all parties identified on the attached service list(s). Service was effected by one or more means indicated below: Transmitting the copies via to all parties who have provided an address. First class mail will be used if electronic service cannot be effectuated. Executed this 21st day of February, 2008, at Rosemead, California. /s/alejandra Arzola Alejandra Arzola Project Analyst SOUTHERN CALIFORNIA EDISON COMPANY 2244 Walnut Grove Avenue Post Office Box 800 Rosemead, California

26 Thursday, February 21, 2008 CASE ADMINISTRATION SOUTHERN CALIFORNIA EDISON COMPANY 2244 WALNUT GROVE AVENUE ROSEMEAD, CA STEPHEN D. BAKER SENIOR REGULATORY ANALYST FELLON-MCCORD AND ASSOCIATES 9960 CORPORATE CAMPUS DRIVE, STE LOUISVILLE, KY John Bohn CALIF PUBLIC UTILITIES COMMISSION 505 VAN NESS AVENUE ROOM 5200 SAN FRANCISCO, CA JONATHAN BROMSON CALIF PUBLIC UTILITIES COMMISSION 505 VAN NESS AVENUE ROOM 4107 SAN FRANCISCO, CA LISA BROWY REGULATORY CASE ADMINISTRATOR SAN DIEGO GAS & ELECTRIC COMPANY 101 ASH STREET, CP32D SAN DIEGO, CA FRANK J. COOLEY ATTORNEY AT LAW SOUTHERN CALIFORNIA EDISON COMPANY 2244 WALNUT GROVE AVENUE ROSEMEAD, CA KATHE H. CORDOVA SAN DIEGO GAS AND ELECTRIC COMPANY 8330 CENTURY PART CT. - CP32D SAN DIEGO, CA KAY DAVOODI NAVY UTILITY RATES AND STUDIES OFFICE 1322 PATTERSON AVE., SE - BLDG. 33 WASHINGTON NAVY YARD, DC MAYBELLINE DIZON PACIFIC GAS AND ELECTRIC COMPANY 77 BEALE STREET, MC B10A SAN FRANCISCO, CA THOMAS A. DOUB CALIF PUBLIC UTILITIES COMMISSION 505 VAN NESS AVENUE ROOM 4205 SAN FRANCISCO, CA KEVIN DUGGAN CALPINE COPRORATION 3875 HOPYARD ROAD, SUITE 345 PLEASANTON, CA CENTRAL FILES SAN DIEGO GAS & ELECTRIC COMPANY 8330 CENTURY PARK COURT SAN DIEGO, CA NORMAN J. FURUTA ATTORNEY AT LAW FEDERAL EXECUTIVE AGENCIES 1455 MARKET ST., SUITE 1744 SAN FRANCISCO, CA Michael J. Galvin CALIF PUBLIC UTILITIES COMMISSION 505 VAN NESS AVENUE ROOM 5015 SAN FRANCISCO, CA LAURA GENAO SOUTHERN CALIFORNIA EDISON COMPANY 2244 WALNUT GROVE AVENUE ROSEMEAD, CA HAYLEY GOODSON ATTORNEY AT LAW THE UTILITY REFORM NETWORK 711 VAN NESS AVENUE, SUITE 350 SAN FRANCISCO, CA KIM F. HASSAN ATTORNEY AT LAW SAN DIEGO GAS & ELECTRIC COMPANY 101 ASH STREET, HQ-12 SAN DIEGO, CA STEPHEN G. HILL HILL ASSOCIATES PO BOX 587 HURRICANE, WV Page 1 of 3

27 Thursday, February 21, 2008 EDWARD HOWARD CALIF PUBLIC UTILITIES COMMISSION 505 VAN NESS AVENUE ROOM 5110 SAN FRANCISCO, CA PAUL T. HUNT SOUTHERN CALIFORNIA EDISON COMPANY 2244 WLANUT GROVE AVENUE ROSEMEAD, CA Donald J. Lafrenz CALIF PUBLIC UTILITIES COMMISSION 505 VAN NESS AVENUE AREA 4-A SAN FRANCISCO, CA LAD LORENZ V.P. REGULATORY AFFAIRS SEMPRA UTILITIES 601 VAN NESS AVENUE, SUITE 2060 SAN FRANCISCO, CA CAROL MANSON SAN DIEGO GAS & ELECTRIC CO CENTURY PARK COURT CP32D SAN DIEGO, CA MICHAEL D. MONTOYA ATTORNEY AT LAW SOUTHERN CALIFORNIA EDISON COMPANY 2244 WALNUT GROVE AVENUE ROSEMEAD, CA CARLOS F. PENA SEMPRA ENERGY LAW DEPARTMENT 101 ASH STREET HQ12 SAN DIEGO, CA Robert M. Pocta CALIF PUBLIC UTILITIES COMMISSION 505 VAN NESS AVENUE ROOM 4205 SAN FRANCISCO, CA Thomas M. Renaghan CALIF PUBLIC UTILITIES COMMISSION 505 VAN NESS AVENUE ROOM 4205 SAN FRANCISCO, CA FELIX ROBLES CALIF PUBLIC UTILITIES COMMISSION 505 VAN NESS AVENUE AREA 4-A SAN FRANCISCO, CA FILE ROOM PACIFIC GAS AND ELECTRIC COMPANY PO BOX 7442 SAN FRANCISCO, CA MICHAEL SHAMES ATTORNEY AT LAW UTILITY CONSUMERS' ACTION NETWORK 3100 FIFTH AVENUE, SUITE B SAN DIEGO, CA JAMES SIMMONS CALIF PUBLIC UTILITIES COMMISSION 505 VAN NESS AVENUE ROOM 4108 SAN FRANCISCO, CA STEPHEN ST. MARIE CALIF PUBLIC UTILITIES COMMISSION 505 VAN NESS AVENUE ROOM 5202 SAN FRANCISCO, CA NINA SUETAKE ATTORNEY AT LAW THE UTILITY REFORM NETWORK 711 VAN NESS AVE., STE 350 SAN FRANCISCO, CA PETER VAN MIEGHEM PACIFIC GAS & ELECTRIC COMPANY PO BOX 7442 SAN FRANCISCO, CA JAMES WEIL DIRECTOR AGLET CONSUMER ALLIANCE PO BOX 37 COOL, CA DON WOOD PACIFIC ENERGY POLICY CENTER 4539 LEE AVENUE LA MESA, CA Page 2 of 3

28 Thursday, February 21, 2008 J. RANDALL WOOLRIDGE THE PENNSYLVANIA STATE UNIVERSITY 302 BUSINESS BUILDING UNIVERSITY PARK, PA SHIRLEY A. WOO ATTORNEY AT LAW PACIFIC GAS AND ELECTRIC COMPANY PO BOX 7442 SAN FRANCISCO, CA James R. Wuehler CALIF PUBLIC UTILITIES COMMISSION 505 VAN NESS AVENUE ROOM 4208 SAN FRANCISCO, CA STELLA ZAHARIUDAKIS PACIFIC GAS AND ELECTRIC COMPANY 77 BEALE STREET, MCB10A SAN FRANCISCO, CA ADAR ZANGO ZIMMER LUCAS PARTNERS 45 BROADWAY, 28TH FLOOR NEW YORK, NY Page 3 of 3