BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA. Second Case Management Statement

Transcription

1 BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA Application of SOUTHERN CALIFORNIA GAS COMPANY for authority to update its gas revenue requirement and base rates. (U 904 G) Application of SAN DIEGO GAS & ELECTRIC COMPANY for authority to update its gas and electric revenue requirement and base rates. (U 902-M) Application Application Second Case Management Statement Glen J. Sullivan Keith W. Melville Steven C. Nelson Attorneys for: San Diego Gas & Electric Company and Southern California Gas Company 101 Ash Street Post Office Box 1831 San Diego, California (619) (619) facsimile March 12, 2003

2 BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA Application of SOUTHERN CALIFORNIA GAS COMPANY for authority to update its gas revenue requirement and base rates. (U 904 G) Application of SAN DIEGO GAS & ELECTRIC COMPANY for authority to update its gas and electric revenue requirement and base rates. (U 902-M) Application Application Second Case Management Statement On February 19, 2003, Administrative Law Judge Douglas Long issued a Ruling in the dockets listed above. The ALJ Ruling stated at p.2: Southern California Gas Company (SoCalGas) and San Diego Gas & Electric Company (SDG&E) are directed to coordinate a second meet and confer conference 1 in advance of PHC-2, but no later than March 10, All parties on the service list are to be included in the meet and confer. This second meet and confer is to identify specifically the topics and issues for inclusion in the proceeding, and a proposed procedural schedule that includes dates for the service of testimony, hearings, and briefs. An Up-dated Case Management Statement (Case Management-2) from the second meet and confer conference is due on Wednesday, March 12, Pursuant to the ALJ Ruling, Southern California Gas Company ( SoCalGas ) and San Diego Gas & Electric Company ( SDG&E ) provided notice by to all parties that a telephonic meet and confer conference would take place on March 7, The telephonic meet and confer conference took place as scheduled and lasted approximately one and one-half hour. Consistent with the ALJ s Ruling and Rule 49(c) of the Commission s Rules of Practice and Procedure, SDG&E and SoCalGas are filing this 1 This meet and confer may be held telephonically, by correspondence, or by any method that is acceptable to the participants. Second Case Management Statement in consolidated Applications and

3 028. A draft of this Second Case Management Statement was circulated on March 10, 2003, to all interested parties to the proceeding (which excludes the information only portion of the service list). It is SoCalGas and SDG&E s understanding that all participants believe the contents of this Second Case Management Statement are accurate. The ALJ s February 19 Ruling stated that parties participating in the second meetand-confer conference could also individually file Prehearing Conference Statements. Thus, the filing of this Second Case Management Statement does not preclude parties participating in the March 7 meet-and-confer from filing Prehearing Conference Statements. This Second Case Management Statement is not intended to present arguments by parties why their positions on contested matters should be adopted. Parties: The following persons and parties (in no particular order) participated in the March 7 meet and confer conference: Reed Schmidt and Beth Tenney, California City-County Street Lighting Association (Cal-SLA) Norman Pedersen, Southern California Generation Coalition Marcel Hawiger, TURN (also covering for UCAN for this meeting) Mark Pocta and Pam Thompson, ORA Bill Wood, CEC Michael Alexander and John Hughes, SCE Liz Westby, Indicated Producers David Huard, ENRG Norman Furuta, Federal Executive Agencies Itzel Berrío, Greelining Institute/Latino Issues Forum James Weil, Aglet Randy Sable and Andy Bettwy, Southwest Gas Corporation John Burkholder, City of Long Beach -2-

4 Glen Sullivan, Keith Melville, Steve Nelson, and Ron van der Leeden, SoCalGas/SDG&E The following topics were discussed at the meet and confer conference: 1. Schedule: ORA proposed bifurcation of the issues in the proceeding. The first phase would cover issues related to a 2004 base rate revenue requirement for SoCalGas and SDG&E (i.e., cost of service issues). The second phase would cover issues related to whether a performance based ratemaking framework should be retained for the applicants and if so, with what provisions. ORA proposed that a schedule for the cost of service phase including the following dates: ORA testimony served: August 8, 2003 Interested party testimony served: August 29, 2003 Rebuttal testimony served: September 19, 2003 Hearings commence: September 29, 2003 (ORA did not propose specific dates for other procedural steps, but proposed that they be consistent with the above dates). ORA proposed for the second (or PBR ) phase, it would serve its testimony no later than November 3, 2003 (possibly earlier) and that a further schedule for that phase should be adopted consistent with the date that ORA serves its testimony (not later than November 3, 2003). SoCalGas and SDG&E proposed a different schedule. They stated that they could support bifurcation of the proceeding if allowed for a decision on the first phase, including cost of service issues by year-end 2003, and it included a schedule for a second phase consistent with service of ORA testimony not later than November 3, SoCalGas and SDG&E proposed that the first phase would cover cost of service issues plus a Commission decision on whether to institute measures effective January 1, 2004, that would eliminate any risk/reward to SDG&E shareholders for differences impact on -3-

5 base rate revenues due to differences between actual and Commission-forecast electric and gas sales (including direct access electric service and gas transportation-only service). The second phase would address all remaining issues (i.e., PBR issues). SoCalGas and SDG&E stated the position that it would be acceptable for the Commission not to adopt interim PBR provisions for 2004 (such as performance measures, earnings sharing, or cost-of-capital triggers) prior to issuing a decision in the second phase, as long as the Commission adopted a procedural schedule for the second phase that provided for expeditious processing starting with service of ORA testimony no later than November 3, SoCalGas and SDG&E proposed the following schedule for a first phase: ORA testimony served: May 16, 2003 Interested party testimony served: June 6, 2003 Rebuttal testimony served: June 16, 2003 Hearings commence: June 30, 2003 Hearings end: July 31, 2003 SoCalGas and SDG&E proposed that the second or PBR phase commence with service of ORA testimony no later than November 3, 2003, with the remainder of the schedule for the second phase following promptly. TURN, SCGC, Cal-SLA, and Aglet stated that they supported the schedule proposed by ORA, except that it should be modified to provide at least 4 weeks (rather than the 3 weeks proposed by ORA) after service of ORA testimony before the deadline for interested parties to serve testimony. 2. Scope of the Proceeding: The participants in the meet-and-confer teleconference then discussed the scope of issues properly in the proceeding. Only one issue raised by SoCalGas and SDG&E s applications was identified by a participant in the meet-and-confer conference as being beyond the scope of the proceeding. SCGC stated the position that the proposal in SoCalGas application (see Prepared Direct Testimony of Sarah Edgar) to include in its rate base used to determine -4-

6 its TY 2004 revenue requirement certain capital costs incurred for implementation of the Commission s D in I (Gas Strategy proceeding) was beyond the scope of the present proceeding. SCGC stated its position that D requires that these costs be reviewed in a BCAP proceeding before they can be allowed in rates through a general rate case or cost of service proceeding (such as the instant proceeding). SCGC stated that because the Commission has recently ordered SoCalGas to refile its BCAP application in September, 2003, and thus the BCAP would not be decided prior to cost of service issues in the instant application, SoCalGas is barred from proposing recovery of any implementation costs in the instant application. SoCalGas stated its position that D provides that only the annual revenue requirement for implementation for the period prior to the cost-of-service test year is subject to review and authorization in a BCAP. SoCalGas stated its position that D provides that in the cost of service proceeding that was next filed (i.e., this case) the Commission would address the annual revenue requirement for implementation in and after the test year in that cost-of-service proceeding. SoCalGas stated that its application here does not request any revenue requirement for a period before TY 2004, although capitalized expenditures were made prior to TURN stated the position that it was premature to require parties to identify issues raised in SoCalGas or SDG&E s applications that should not be allowed within the scope of the proceeding. There was some discussion of whether certain issues that parties other than applicants have raised belong within the scope of the proceeding. Greenlining/LIF s Prehearing Conference Statement dated February 3,2003 states that it intends to raise issues in the areas of: executive compensation, diversity of applicants workforces, applicants philanthropic contributions, and applicants performance in the Commission s WMDVBE program and supplier diversity. SoCalGas and SDG&E stated in the meet-and-confer that they agreed that executive compensation is within the scope of the proceeding, but only to the extent that it involves compensation for executives that applicants seek to recover (at least in part) in rates in these consolidated applications. Furthermore, SoCalGas and SDG&E stated the position that diversity of workforce, applicants philanthropic contributions, and its performance in the -5-

7 Commission s WMDVBE program were issues beyond the proper scope of this proceeding. Greenlining/LIF restated its position that all of the issues identified in its February 3, 2003 Prehearing Conference Statement were properly within the scope of this proceeding. ENRG stated the position that the instant proceeding should include all issues regarding NGVs not addressed in the consolidated LEV applications for reasons of administrative efficiency and other reasons. See Applicants matrix of issues in interrelated proceedings dated March 3, for a summary of the issues that ENRG wishes to raise regarding NGVs. Applicants stated the position that only funding in rates of LEV (including NGV) program activities described in D as mandatory were made 065, funding of discretionary or non-mandatory LEV (including NGV) program activities are supposed to be considered in the consolidated LEV applications, and that rate design and cost allocation issues related to gas service for NGV purposes should be addressed in a BCAP rather than in the instant cost-of-service proceeding. There was also a discussion between Cal-SLA and SDG&E of issues in SDG&E s cost of service application that relate to electric streetlighting. Cal-SLA agreed as following: Distribution O&M accounts The COS filing will address the appropriate level of distribution O&M expenses to be included in SDG&E s total revenue requirement. This includes FERC accounts 585 (Street Lighting & Signal System Expenses) and 596 (Maintenance of Street Lighting & Signal Systems). These dollar amounts are used to develop the maintenance charges contained in the Lighting Rate Design Model to be filed in the Rate Design Window. Depreciation The COS filing will address depreciation issues, such as the appropriate book life and depreciation rate for the assets contained in SDG&E s FERC distribution plant accounts. This includes account 373 (Street Lighting & Signal Systems) and 371 (Installations on Customer Premises). The depreciation results are inputs to the calculation of Real Economic Carrying Charges, which are used in the street lighting model to determine the annual carrying cost of the street lighting facilities and which will be filed in the Rate Design Window proceeding. Total Revenue Requirement Once a new total revenue requirement has been adopted for SDG&E, the revenue requirement will be used as an issues for the instant applications by that decision. Applicants stated that per D

8 input into the revenue allocation process. The revenue allocation, an issue to be decided in the Rate Design Window proceeding, will impact all customer classes, including street lighting. Cost Allocation and Rate Design: The allocation of costs between SDG&E streetlighting service and all other SDG&E services/rate schedules, and the design of SDG&E streetlighting rates will be an issue in the SDG&E Rate Design Window proceeding, and not in the instant Cal-SLA and SDG&E agreed that SDG&E s instant application as filed on December 20, 2002, is consistent with the above description of issues within and outside the instant application. No party expressed any position other than that stated above on scope of streetlighting issues in this proceeding. 3. Other topics: The parties in the meet-and-confer briefly discussed the additional topics listed in Rule 49 not discussed above. (1) Identification of the principal factual and legal issues and the evidentiary bases for claims and defenses; proceeding. These matters are described above in the section regarding scope of the (2) Use of settlement techniques or other alternatives to litigation; No party proposed any special techniques for settlement or alternatives to litigation, although the discussion certainly did not rule out settlement of issues pursuant to provisions in the Commission s rules for settlements and stipulations. (3) Need for disclosure or discovery of documents or other information; underway. Parties discussed that discovery would be needed, and indeed was actively -7-

9 (4) Plan for conducting discovery; Applicants stated their position that the general, but not invariable, guideline for timeliness of responses should be 10 business days from receipt. No one proposed that a discovery cut-off deadline be established at this time. (5) Identification of motions requiring early resolution; No one identified any motions requiring early resolution (beyond the resolution of scheduling and scoping issues discussed above). (6) Recommended dates for completion of discovery, service of prepared testimony, additional prehearing conferences, and hearings; and Proposals for a procedural schedule were made as described above. (7) Other topics as the interests of justice and efficient case management require. No other issues were raised. Respectfully submitted, Glen J. Sullivan March 12, 2003 Glen J. Sullivan Keith W. Melville Steven C. Nelson Attorneys for San Diego Gas & Electric Company and Southern California Gas Company 101 Ash Street San Diego, California (619) gsullivan@sempra.com -8-