In a billion-dollar case that promises to get more complicated in the wake of the San Bruno gas transmission pipeline explosion, Pacific Gas and Electric Co. signaled last Monday that a settlement may be near in its issue-laden general rate case at the California Public Utilities Commission (CPUC).
Although the settlement discussions heretofore haven't produced much optimism, stakeholders and the financial community are reading the possibility of a deal by looking between the lines of recent e-mails between utility lawyers and the CPUC administrative law judge (ALJ), David Fukutome.
PG&E's lawyers informed Fukutome that all of the rate case's active parties reported that "significant progress" among a number of them has been made in the settlement talks. Therefore, they asked the judge to suspend the case's procedural schedule until a formal progress report can be made this Friday.
"The procedural schedule shall be suspended pending the submission of the next status report on the general rate case settlement discussion," Fukutome said in a subsequent e-mail.
Hearings were held during the summer on PG&E's request to put a $1.1 billion general rate case into effect at the start of next year with smaller interim revenue increases in 2012 ($275 million) and 2013 ($343 million). However, the CPUC's independent consumer unit, the Division of Ratepayer Advocates (DRA), has argued for a revenue level less than 25% of what the utility asked for in its CPUC filing.
The DRA urged state regulators to grant PG&E no more than a 4.1% ($227 million) rate increase, compared with the utility's proposed 19.7% ($1.1 billion) hike in annual revenues.
Earlier in September the ALJ in PG&E's ongoing transmission pipeline and storage case, in which there is a proposed settlement, issued an order asking the parties to comment on whether the agreement needs to be reexamined in light of the San Bruno incident. Reply comments were due Thursday.
A question raised by ALJ John Wong and the assigned CPUC member, Timothy Alan Simon, is "whether operations and maintenance [O&M] work activities and capital expenditures for transmission line projects have been adequately prioritized in terms of work activities and projects involving transmission pipelines in high-consequence areas and with high-risk assessments." They also questioned whether the proposed settlement allowed for ensuring that identified pipeline safety-related O&M work will be completed in the 2011-14 period.
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