Pacific Gas and Electric Co. recently reached an "unprecedented uncontested" settlement in its $1.1 billion pending general rate case, and a previous settlement on its natural gas transmission pipeline and storage system that was reached in August before the deadly San Bruno pipeline rupture is not expected to be delayed, according to utility President Chris Johns.

Johns spoke during a third quarter earnings conference call Thursday. Both cases should be completed by February next year, Johns said.

Speculation on a general rate case settlement for the San Francisco-based combination utility began circulating in September after the evidentiary hearings for the case were completed in August. PG&E's request was to put the new rates in effect at the start of next year with smaller interim revenue increases in 2012 ($275 million) and 2013 ($343 million). However, the California Public Utility Commission's (CPUC) 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 (see Daily GPI, Oct. 12).

Johns told financial analysts the rates should be approved early next year and effective retroactive to Jan. 1. He said considering the number of parties in the general rate case it is "very uncommon" for a settlement to be reached with no opposition as is the case now.

"We think the settlement is fair and strikes an appropriate balance between our objectives and the key issues for the settling parties," said Johns, adding that there are still a number of issues to be resolved outside the general rate case that will offset the increase tied to the settlement, however. Rates going into 2011 will be the same or slightly lower than now, he said.

In the gas pipeline and storage part of the business Johns said, the new Pipeline 2020 Program is a major, multi-year effort that will impact PG&E and the gas pipeline industry's future operations, but it should not affect the utility gas transmission/storage rate case settlement, for which PG&E expects a decision early next year.

"We expect that [settlement] case to continue on its normal schedule, with a proposed decision in February," Johns said, noting that the assigned regulator and administrative law judge at the CPUC have established a separate phase to the case to focus on an evaluation of pipeline safety measures and emergency response procedures.

"We expect the Pipeline 2020 and any other initiatives resulting from San Bruno will be coordinated with the CPUC through this or any other proceedings."

Earlier on the conference call PG&E CEO Peter Darbee reported that the utility has completed an aerial leak survey of all 6,700 miles of its transmission pipeline system in northern and central California, and by the end of this year it will have completed a similar ground leak survey of the entire backbone system.

In addition, Darbee said the Pipeline 2020 program by PG&E "raises the bar on our company and the entire gas industry when it comes to pipeline safety." He emphasized that the utility committed to "restoring public trust and confidence in the PG&E system."

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