HomeMy WebLinkAboutReso. 1986 - 076 - Approving the rate settlement agreement between the city of redding and pacific gas and electric conpany f
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RESOLUTION NO. 84-4;-
A
G'7,,A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF REDDING
APPROVING THE RATE SETTLEMENT AGREEMENT BETWEEN THE CITY OF
REDDING AND PACIFIC GAS AND ELECTRIC COMPANY, AND
AUTHORIZING THE MAYOR TO SIGN SAME.
BE IT RESOLVED by the City Council of the City of Redding as
follows :
1 . That the City Council of the City of Redding hereby
approves the attached Rate Settlement Agreement between the City
of Redding and Pacific Gas and Electric Company; and
2. That the Mayor of the City of Redding is hereby
authorized and directed to sign all necessary documents on behalf
of the City of Redding, and the City Clerk is hereby authorized
and directed to attest the signature of the Mayor and to impress
the official seal of the City of Redding on the aforesaid
documents, when appropriate; and
3 . That a true copy of the Rate Settlement Agreement
referred to herein is attached hereto and made a part hereof.
I HEREBY CERTIFY that the foregoing Resolution was
introduced and read at a regular meeting of the City Council of
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the City of Redding on the 7th day of April , 1986,
and was duly adopted at said meeting by the following vote:
AYES: COUNCIL MEMBERS: Demsher, Fulton, Gard, Pugh, & Kirkpatrick
NOES: COUNCIL MEMBERS: None
ABSENT: COUNCIL MEMBERS: None
ABSTAIN: COUNCIL MEMBERS: None
1-1-120e zu,e(Xr
HOWARD D. KIRKPAT ICK, Mayor
City of Redding
ATTEST: /� /,
�C (/l • /`LzCrt
ETHEL A. NICHOLS, City Clerk
FORM.PPROVED:
//::,- e'er___-
RA►IDALL A. HAYS, City Attorney
-2-
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PACIFIC GAS AND ELECTRIC COMPANY Su plement No. __
FERC Rate Schedule No. R-1 Supersedes Supplement No.
Page 1 of 34
RATE SETTLEMENT AGREEMENT
PART I
The Parties agree that the supplemental power service provided to
City of Redding pursuant to the terms and conditions of the Agreement for Sale
of Electric Capacity and Energy, accepted for filing by the Federal Energy
Regulatory Commission (FERC or the Commission) in Docket No. ER80-577 (Sale
Agreement) , shall be provided to City of Redding (Redding) by Pacific Gas
and Electric Company (PGandE) at the rates and pursuant to the terms and
conditions specified below in this Rate Settlement Agreement (Agrleement).
The rates and rate formulas specified in this Agreement have been
developed through negotiations between the Parties. Consequently, the
Parties agree that rates and rate formulas specified in this Agreement are
not subject to challenge by either Party except as provided herein.
The Parties shall make every effort to ensure acceptance by the FERC of
this Agreement as agreed:
Issued by: S. P. Reynolds, Vice President-Rates
Issued on: Effective: --January 2, 1986
• •
PACIFIC GAS AND ELECTRIC COMPANY Supplement No.
FERC Rate Schedule No. R-1 Supersedes Supplement No.
Page 2 of 34
The rate agreement reached by the Parties is for a one-year period
effective January 2, 1986 through December 31, 1986 and consists of
five elements. First, the Parties agree that the rates to be effective as of
the effective date of this Agreement for the supplemental power service to be
provided by PGandE to Redding under the Sale Agreement shall be the Phase I
rates filed by PGandE for Redding in FERC Docket ER86-107-000.
Second, the Parties have agreed on the rate levels of Rate Schedule
No. R-1 to be effective as of June 1, 1986.
Third, the Parties have agreed to formulas and mechanisms for adjusting
the rate levels of Rate Schedule No. R-1 to reflect retail base rate and other
adjustments authorized by the CPUC including but not limited to recognition of
the Costs associated with the Diablo Canyon generating units , as of the later
of June 1, 1986 or the effective dates that PGandE' s retail rates are adjusted
by the CPUC to reflect such Costs, should such dates be prior to
January 1 , 1987.
Fourth, the Parties have agreed to a Fuel Cost Adjustment mechanism
(FCA).
•
Issued by: S. P. Reynolds, Vice President-Rates
Issued on: Effective: January 2, 1986
PACIFIC GAS AND ELECTRIC COMPANY Supplement No.
FERC Rate Schedule No. R-1 Supersedes Supplement No.
Page 3 of 34
Fifth, the Parties have agreed to commence good-faith negotiations on
March 18, 1986 to consider contract changes acceptable to Redding which will
allow the City to utilize its other power resources.
Issued by: S. P. Reynolds, Vice President-Rates
Issued on: Effective: January 2, 1986
• •
PACIFIC GAS AND ELECTRIC COMPANY Supplement No.
FERC Rate Schedule No. R-1 Supersedes Supplement No.
Page 4 of 34
PART II
RATE SCHEDULES - 1986
The Parties agree to the following rates for the services described. It
is further understood and agreed that the following rates shall beeffective
as of the effective date of this Agreement and shall remain in effect, except
as they may be changed in accordance with this Agreement.
II. 1. SUPPLEMENTAL POWER SERVICE - RATE SCHEDULE NO. R-1
Pursuant to Section III of the Sale Agreement, listed below are
the rates to be charged by PGandE to Redding, for supplemental power
service to be provided at 230 kilovolts at the delivery point
specified in the Sale Agreement.
Rates Effective Rates Effective
January 2 - May 31 , 1986 June j1, 1986
Customer Charge: $500 per month $1 ,849.74 per month
Demand Charge: $14. 7355 per kW per month $10.403 per kW per month
Energy Charge: - $0.00862.65 per kWh $0.00805 per kWh
e �
Issued by: S. P. Reynolds, Vice President-Rates
Issued on: Effective: January 2, 1986
• •
PACIFIC GAS AND ELECTRIC COMPANY Su lent No.
FERC Rate Schedule No. R-1 Supersedes SupplementeniNo. _—
Page 5 of 34
Fuel Cost Adjustment:
(a) A fuel cost adjustment ("FCA") , as detailed in Part VI to this
Agreement, and to be added to the energy charge, will be
included in each bill for service. The FCA amount shall be
the product of the total kilowatt-hours for which the bill is
rendered multiplied by the adjustment per kilowatt-hour. The
FCA amount is not subject to any adjustment for voltage or
power factor.
Issued by: S. P. Reynolds, Vice President-Rates
Issued on: Effective: January 2, 1986
• .
PACIFIC GAS AND ELECTRIC COMPANY Su lent No.
FERC Rate Schedule No. R-1 Supersedes SupplementemNo. _
Page 6 of 34
PART III
RESALE RATE ADJUSTMENT MECHANISM
III.1. The Parties agree that the level of rates to be charged under Rate
Schedule No. R-1 after May 31, 1986, excluding the FCA base energy
charge included in the base energy component of the Rate Schedule,
will change according to the resale rate adjustment mechanism
described below.
I1I.2. Following each Qualifying CPUC Retail Rate Adjustment (QRRA) , the
then-existing rate components of Rate Schedule No. R-1 will be
multiplied by a resale rate adjustment factor to determine new rate
levels. Such new rate levels will be effective as of the later of
June 1, 1986 or the effective date of such QRRA. The Resale rate
adjustment factor shall equal the Adjusted Retail Base Revenue
Amount (ABRA) divided by the Stated Retail Base Revenue Amount
(SBRA). Following each change in resale rates made through this
resale rate adjustment mechanism, ARRA shall become the SBRA to be
used for the next resale rate adjustment.
ABRA shall equal the sum of SBRA plus the amount of the QRRA.
A QRRA is a non-definitional change, authorized in a CPUC decision,
in retail Base Revenue Amount as specified in Preliminary Statement,
Issued by: S. P. Reynolds , Vice President-Rates
Issued on: Effective: January 2, 1986
• •
PACIFIC GAS AND ELECTRIC COMPANY Supplement No.
FERC Rate Schedule No. R-1 Supersedes Supplement No.
Page 7 of 34
Part E, No. 4 of PGandE's Tariff Schedules on file with the CPUC
(BRA) which corresponds to a net change in total retail electric
base revenue requirement authorized by the CPUC to be collected from
retail customers. If a CPUC decision or part thereof has only the
effect of changing the definition of BRA, then such decision or part
thereof will not be included in the calculation of a new ABRA, even
though such decision or part thereof may result in an adjustment to
BRA. Definitional changes occur, for example, (a) when an
identifiable cost currently collected as part of base revenue is
transferred pursuant to the decision in question to another portion
of PGandE' s cost recovery such as the Energy Cost Adjustment Clause
(ECAC) or the Annual Energy Rate (AER) , or (b) conversely, when an
identifiable cost is transferred to BRA from another cost recovery
mechanism such as ECAC or AER. Electric Revenue Rate Adjustment
Mechanism (ERAM) adjustment in PGandE' s retail rates due to under or
overcollections in the ERAM balancing account will not result in any
change in resale rates.
A single CPUC decision may combine several adjustments , such as
(a) an increase or decrease in the total authorized BRA, (b) a
change in the definition of BRA, and (c) a truing of differences
9
between allowed and recovered BRA' s through ERAM. Onlyy the
Issued by: S. P. Reynolds, Vice President-Rates
Issued on: Effective: January 2, 1986
PACIFIC GAS AND ELECTRIC COMPANY Supplement No.
FERC Rate Schedule No. R-1 Supersedes Supplement No.
Page 8 of 34
nondefinitional changes within such decision will constitute the
QRRA for purposes of the resale rate adjustment mechanism.
III.3. The initial SBRA shall be $2,828,831,081 as of January 1, 1986, in
accordance with Appendix I to this Part III. Any QRRA not listed on
Appendix I to this Part III made effective on or subsequent to the
effective date of this Agreement shall result in new rate levels
effective as of the later of June 1, 1986 or the effective date of
such QRRA.
1I1.4. If, in conjunction with or instead of authorizing a change in RRA,
the CPUC orders a modification to ECAC or the creation of or
modification to any other mechanism to allow PGandE to recover Costs
incurred in owning and operating the Diablo Canyon Nuc ear Power
Plant (Diablo) or any portion thereof, or to recover any other CPUC
authorized Costs attributable to PGandE' s Electric Department, the
Parties agree to implement consistent and concurrent modifications
to Rate Schedule No. R-1 in such a manner as to preserle the
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intention of the Parties to provide that changes in authorized
revenue requirement which occur in the CPUC jurisdiction be
proportionately reflected in the levels of the rate components of
Rate Schedule No. R-1 after May 31, 1986. Recovery of Redding' s
share of Costs incurred in the operation of Diablo Unit No. 1 prior
Issued by: S. P. Reynolds, Vice President-Rates
Issued on: Effective: January 2, 1986
i !
PACIFIC GAS AND ELECTRIC COMPANY Supplement No.
FERC Rate Schedule No. R-1 Supersedes Supplement No.
Page 9 of 34
to a final CPUC decision authorizing recovery of Diablo Unit No. 1
Costs in retail rates shall occur through the Temporary Rate
Implementation Procedure for Diablo Unit No. 1 in Part IV which
represents a specific implementation of the provisions of this
paragraph. The Parties will employ a similar mechanism for interim
recovery of CPUC authorized Costs incurred in the operation of
Diablo Unit No. 2 from the later of June 1, 1986 or the effective
date of each retail rate increase provided for in a CPUC decision
which prescribes a manner of initial or interim cost recovery for
Diablo Unit No. 2.
III.5. If, prior to January 1 , 1987, the CPUC authorizes PGandE to adjust
retail rates to reflect past over- or underrecovery of authorized
Costs related to Diablo, Redding's proportionate share of the
adjustment for any such over- or underrecovery in retail revenue
requirement will be reflected: 1) pursuant to the resale rate
adjustment mechanism described herein, in Rate Schedule No. R-1 or
through some other agreed upon rate mechanism until fully amortized
2) only for the period June 1 , 1986 through December 11 , 1986. The
Parties further agree that any such over- or underrecoverylremaining
unamortized as of December 31, 1986, will be amortized for a period
beyond that date such that the total amortization period for such
Issued by: S. P. Reynolds , Vice President-Rates
Issued on: Effective: January 2, 1986
•
PACIFIC GAS AND ELECTRIC COMPANY Supplement No.
FERC Rate Schedule No. R-1 Supersedes Supplement No.
Page 10 of 34
adjustment ends twelve months from the date that the amortization
commenced unless the Parties agree to a different amortization
period. •
III.6. If, after December 31, 1986, the CPUC authorizes PGandE to adjust
retail rates to reflect past over- or underrecovery of authorized
Costs related to Diablo and incurred by PGandE prior to
January 1, 1987, Redding's proportionate share of such adjustment
will : 1) be only for the period June 1, 1986 through
December 31, 1986, 2) unless otherwise agreed by the Parties, be
amortized as a separately identified. surcharge or credit, regardless
of whether Redding at such time is taking any service under Rate
Schedule No. R-1. Such amortization will occur over a 12-month
period commencing with the effective date of the CPUC-authorized
change in retail rates unless the Parties agree to a different
amortization period.
Issued by: S. P. Reynolds , Vice President-Rates
Issued on: Effective: January 2, 1986
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• •
PACIFIC GAS AND ELECTRIC COMPANY Supplement No.
FERC Rate Schedule No. R-1 Supersedes Supplement No.
Page 11 of 34
PART IV
TEMPORARY RATE IMPLEMENTATION PROCEDURE
FOR DIABLO CANYON UNITS NO. 1 AND 2
IV.1. In accordance with the intention of PGandE and Redding to establish
a rate mechanism to recover costs for Unit No. 1 of Diablo Canyon
Nuclear Power Plant (Diablo) , the Parties adopt a mechanism which is
designed to provide PGandE rate relief for Diablo from Redding
consistent with the CPUC's interim decision on Diablo
• (No. 85-12-085) issued prior to a retail base rate or other revenue
adjustment to be authorized by the CPUC in a final decision on
PGandE's application for recovery of authorized Diablo Costs in
retail rates. The mechanism provides for developing and charging a
Diablo Energy Adjustment Rate to Redding based on the provisions of
this Part IV.
IV.2. In an interim decision concerning Diablo Unit No. 1 (No. 85-12-085) ,
the CPUC authorized PGandE to collect an annual revenue requirement
of $388 million as of January 1 , 1986 through the Diablo Canyon
Adjustment Clause (DCAC) . Redding' s allocated portion of this
annual interim revenue requirement fnr Diablo is agreed to be
$39,42.0, as calculated on Appendix I to this Part IV, unless
adjusted in accordance with paragraph 4 of this Part IV.
Issued by: S. P. Reynolds , Vice President-Rates
Issued on: Effective: January 2, 1986
1110 •
PACIFIC GAS AND ELECTRIC COMPANY Supplement No.
FERC Rate Schedule No. R-1 Supersedes Supplement No. —
Page 12 of 34
IV.3. Commencing June 1, 1986, the Diablo Energy Adjustment Rate to be
charged by PGandE and paid by Redding shall be 6.05 mills per kWh as
calculated on Appendix I to this Part IV. In order to prevent
overrecovery or underrecovery of Redding's proportionate share of
PGandE's annual interim revenue requirement for Diablo, the total
amount paid by Redding through the Diablo Energy Adjustment Rate
shall be compared to Redding's proportionate share of tlhe annual
interim revenue requirement for Diablo ($39,420) as of
December 31, 1986. Within 30 days of that date, Redding shall pay
to PGandE or PGandE shall refund to Redding, as appropriate, an
amount necessary to reconcile total payments through the Diablo
Energy Adjustment Rate and Redding's proportionate share of PGandE 's
annual interim revenue requirement for Diablo ($39,420). Also, as
of December .31, 1986, the Diablo Energy Adjustment Rate shall be
adjusted to equal Redding's proportionate share of PGandE's annual
interim revenue requirement for Diablo ($39,420) divided by the
total kWh of energy purchased by Redding from PGandE In 1986.
IV.4 If the CPUC issues any decision modifying or replacing the interim
rate mechanism authorized in CPUC Decision No. 85-12-085 for
recoveryof Diablo costs until the CPUC issues a final Diablo
II
ratemaking and prudency decision, the Parties will adjust the form
or level , as appropriate, of the Diablo Energy Adjustment Rate to
Issued by: S. P. Reynolds, Vice President-Rates
Issued on: Effective: January 2, 1986
• •
PACIFIC GAS AND ELECTRIC COMPANY Su lement No.
FERC Rate Schedule No. R-1 Supersedes Supplement No.
Page 13 of 34
Redding, unless the Parties agrees to a different treatment of such
CPUC decision in accordance with Part V of this Agreement or through
another rate mechanism. Such adjustment shall be consistent with
the intent of this Temporary Rate Implementation Procedure for
Diablo to provide for recovery in resale rates of Redding's
proportionate share of Diablo costs authorized by the CPUC. Any
CPUC decision related to Diablo Canyon No. 2 issued between
January 2, 1986 and December 31, 1986 shall be implemented in a
manner consistent with this Part IV as of June 1, 1986 or the
effective date established by the CPUC, whichever date is later.
IV.5. Upon issuance by the CPUC of a final Diablo ratemaking and prudency
decision, Redding's share of PGandE's revenue requirement for Diablo
shall be computed in accordance with Part V of this Agreement.
In order to track, for informational purposes only, Redding's
share of PGandE's revenue requirement for Diablo as filed with the
CPUC, PGandE will establish and employ a Diablo Canyon Adjustment
Account for Redding (DCAACOR) which will record an estimate of
Redding' s share of such revenue requirement for Diablll . The purpose
of making monthly entries to the DCAACOR is (1) to give PGandE and
Redding an estimate of the balance Redding might owe IlGandE on the
effective date of the final Diablo ratemaking and prudency decision
•
Issued by: S. P. Reynolds, Vice President-Rates
Issued on: Effective: January 2, 1986
•
PACIFIC GAS AND ELECTRIC COMPANY Supplement No.
FERC Rate Schedule No. R-1 Supersedes Supplement No.
Page 14 of 34
from the CPUC if PGandE's estimate of Diablo's revenue requirement
is included in the BRA; and (2) to facilitate retroactive adjustment
payments, if any, computed in accordance with the preceding
paragraph, consistent with the final revenue requirement and rate
treatment adopted for Diablo during the period from June 1, 1986
until the effective date of the final ratemaking and prudency
decision from the CPUC and with amounts paid under the Diablo Energy
Adjustment Rate and any similar mechanism.
Starting June 1986, a debit entry of $5,825 shall be made to
the DCAACOR each month based on Appendix II to this Part TV. If
PGandE files a revised revenue requirement for Diablo with the CPUC
in 1986, this revised revenue requirement shall be the basis for
calculation of a new annual revenue requirement used toi determine
the monthly debit entry to the DCAACOR from the month in which the
revised revenue requirement is filed with the CPUC. Sllch new debit
entry shall be calculated on the basis of the then-current FERC
jurisdictional allocation and Redding's share thereof IIs computed in
accordance with Appendix II. In addition, a credit entry shall be
made to the DCAACOR each month equal to Redding' s allocated portion
of PGar,dE' s actual fuel savings from Diablo, or such succeeding
basis as the CPUC may authorize for the interim recovery of Diablo
Issued by: S. P. Reynolds, Vice President-Rates
Issued on: Effective: January 2, 1986
•
PACIFIC GAS AND ELECTRIC COMPANY Supplement No.
FERC Rate Schedule No. R-1 Supersedes Supplement No.
Page 15 of 34
Costs in retail rates, for that month. A monthly debit or credit
II
entry equal to one-twelfth (1/12) the rate determined in accordance
with Section 35.19a(a)(2)(iii ) (A) of FERC Regulations, 18 C.F.R.
Section 35. 19a(a)(2)(iii )(A), as it may be amended, shall also be
made to the DCAACOR.
IV.6. Upon issuance of a final Diablo ratemaking and prudency decision by
the CPUC which authorizes a mechanism to adjust retail base rates,
ECAC or other rates to recover Diablo Costs, PGandE will discontinue
• charging the Diablo Energy Adjustment Rate described herein as of
the effective date of the change in retail rates designated in the
CPUC decision. PGandE will reflect Redding's proportionate share of
authorized Diablo Costs through Redding's base rates , FCA or another
rate mechanism, in accordance with this Part IV or Part V of this
Agreement, starting from the later of June 1, 1986 or the same
effective date designated by the CPUC. If the mechanism or any part
of the mechanism includes an adjustment to rates or the FCA to
reflect the difference between monies collected for Diablo from
June 1, 1986 until the date the mechanism becomes eff1ctive, PGandE
shall collect or refund the difference between Reddinll ' s
proportionate share of money derived from the mechanism ultimately
adopted for Diablo by the CPUC and any monies collected by the
•
Issued by: S. P. Reynolds , Vice President-Rates
Issued on: Effective: January 2, 1986
• •
PACIFIC GAS AND ELECTRIC COMPANY Supplement No.
FERC Rate Schedule No. R-1 Supersedes Supplement
lement No.
Page 16 of 34
. Diablo Energy Adjustment Rate described herein including interest at
the Interest Rate on such difference, provided the CPUC decision
authorizes interest as part of implementing the mechanism.
IV.7. In accordance with paragraph'VII.5 of Part VII of this Agreement,
PGandE may pursue such other methods of cost recovery for Diablo as
it deems appropriate, including the filing of rates which include
the Costs of Diablo with the FERC pursuant to Section 205 of the
Federal Power Act; provided that PGandE shall not seek o modify
through any such filing Redding' s obligations incurred as provided
herein for recovery of Redding's share of Diablo Costs during the
period ending December 31, 1986.
Issued by: S. P. Reynolds, Vice President-Rates
Issued on: Effective: January 2, 1986
• •
PACIFIC GAS AND ELECTRIC COMPANY Supplement No.
FERC Rate Schedule No. R-1 Supersedes Supplement No.
APPENDIX I
DEVELOPMENT OF REDDING'S PORTION
OF PGandE'S TOTAL ESTIMATED 1986
DCAC REVENUES FROM DIABLO
Line Line
No. No.
Total estimated 1986 PGandE DCAC
Revenues from CPUC Decision 85-12-085
1 Issued December 18, 1985 $388,000,000 1
Times FERC jurisdictional po on
2 ($19,640,000/$688,000,000)� j $ 11,076,047 2
• Times Redding's share of the FERC
3 jurisdictional portion (.3559%)(b) $ 39,420 3
DCAC Energy Rate $388,000,000 (line I)/
64,088,000,000 kWh (Advice Letter
4 No. 1097-E, Table 2) 6.05 mills/kWh 4
(a)Based on ratio of FERC jurisdictional revenue requirement to total revenue
requirement from CPUC Application No. -84-06-014.
(b)Based on ratio of energy sales in kilowatt-hours to Redding t total FERC
jurisdictional energy sales in kilowatt-hours for the most recent available
12 months of recorded data (12 months ended 10/31/85).
Issued by: S. P. Reynolds , Vice President-Rates
Issued on: Effective: January 2, 1986
• •
PACIFIC GAS AND ELECTRIC COMPANY Supplement No.
FERC Rate Schedule No. R-1 Supersedes Supplement No.
fi
APPENDIX II
DEVELOPMENT OF REDDING'S PORTION OF PGandE'S •
REVENUE REQUIREMENT FOR DIABLO
AS FILED WITH THE CPUC
The monthly revenue requirement of $5,825 for Redding is calculated as
follows:
Yearly revenue requirement (filed on June 17, 1985
as part of CPUC Application No. 84-06-014) $688,000,000
Monthly amount ($688,000,000/12) $ 57,333,333
Times FERC jurisdictional portion(a)
($19,640,000/$688,000,000) $ 1,636,667
Times Redding's shay of the FERC jurisdictional
portion ( .3559%)' $ 5,825
(a)Based on ratio of FERC jurisdictional revenue requirement to total revenue
requirement f''om CPUC Application No. 84-06-014.
(b)Based on ratio of energy sales in kilowatt-hours to Redding uo total FERC
jurisdictional energy sales in kilowatt-hours for the most recent 12 months
of available recorded data (12 months. ended October 31, 1985).
Issued by: S. P. Reynolds , Vice President-Rates
Issued on: Effective: January 2, 1986
i i
PACIFIC GAS AND ELECTRIC COMPANY Supplement No.
FERC Rate Schedule No. R-1 Supersedes Supplement No.
Page 17 of 34 --
PART V
DIABLO CANYON AND HELMS RATE SCHEDULE ADJUSTMENTS
The Parties agree that the rates charged under Rate Schedule No. R-1 will
change, in accordance with Part III of this Agreement, as of the later of
June 1, 1986 or the effective date of the final Diablo ratemaking and prudency
decision by the CPUC to reflect the commercial operation of any of the
Diablo Canyon Nuclear Power Plant generation units should such effective date
be prior to January 1, 1987. It is further agreed that any CPUC decision on
• or after January 1, 1987 attributable to the Diablo Canyon units will , to the
extent such decision authorizes recovery of Costs incurred between
June 1, 1986 and January 1, 1987, also be reflected in Rate Schedule No. R-1
rates as of the later of June 1 , 1986, or the effective date of such decision
in accordance with Part III of this Agreement.
The Parties further agree that the rates charged under Rate Schedule
No. R-1 will change, in accordance with Part III of this Agreement, as of the
later of June 1, 1986, or the effective date of any CPUC decision, in addition
to Decision No. 85-08-102, concerning ratemaking and prudency in connection
with units of the Helms Pumped Storage Project, (such as a decision addressing
costs incurred as a result of the Lost Canyon pipe crossing failure) should
such effective dates be prior to January 1, 1987. It is further agreed that
any CPUC decision on or after January 1, 1987 attributable to the Helms Pumped
Issued by: S. P. Reynolds, Vice President-Rates
Issued on: Effective: January 2, 1986
•
PACIFIC GAS AND ELECTRIC COMPANY Supplement No. __
FERC Rate Schedule No. R-1 Supersedes Supplement No.
Page 18 of 34
Storage Project will , to the extent such decision authorizes recovery of Costs
incurred between June 1, 1986 and January 1, 1987, also be reflected in Rate
Schedule No. R-1 rates as of the later of June 1, 1986 or the effective date
of such decision in accordance with Part III of this Agreement.
•
Issued by: S. P. Reynolds , Vice President-Rates
Issued on: Effective: January 2, 1986
•
PACIFIC GAS AND ELECTRIC COMPANY Supplement No. _
_
FERC Rate Schedule No. R-1 Supersedes Supplement No. _
Page 19 of 34
PART VI
FUEL COST ADJUSTMENT
VI. 1. The Parties agree that the fuel cost adjustment mechanism (FCA)
which shall be used in calculating the energy charge for the
Supplemental Power Service shall be the fuel cost adjustment
provided below.
Any unamortized balance (either positive or negative) in the
Electric Energy Cost Adjustment Account which is due to (or owed by)
Redding as of the effective date of this Agreement shall be assigned
to a new Electric Energy Cost Adjustment Account-COR (ECA-COR) in
accordance with the method used to allocate such balance among other
resale customers in FERC Docket No. ER86-107. PGandE Ilnd Redding
agree the amount of Redding's assigned share of the unamortized
balance (initial balance) shall be $10,983.09. The initial balance
and entries to the ECA-COR shall be adjusted in accordance with such
changes to the allocation method among resale customers as may be
accepted or ordered by FERC, including as the result of any settle-
ment agreement, except as otherwise agreed by the Parties. Such
adjustment shall be applied to Redding' s bills from PGandE as a
surcharge or credit, provided that Redding may elect to have any
Issued by: S. P. Reynolds, Vice President-Rates
Issued on: Effective: January 2, 1986
• S
PACIFIC GAS AND ELECTRIC COMPANY Su lement No.
FERC Rate Schedule No. R-1 Supersedes Supplement No.
Page 20 of 34
surcharge amortized over a period no longer than 12 months. PGandE
will confer with Redding in determining the amount of sulch adjustment.
Any balance in the Electric Energy Cost Adjustment Account of
the present FCA which exists at the time a successor FCA becomes
effective will be carried forward and fully amortized pursuant to
the terms of the successor FCA provision contemplated under this
Agreement. In addition, the successor FCA contemplated under this
Agreement will provide for the amortization of any balances existing
at the time any further amended or successor FCA provision is made
effective.
VI.2. Applicability
This fuel cost adjustment provision applies to bills for service to
Redding under Rate Schedule R-1.
VI.3. Billing Amount
The amount hereunder to be added to or subtracted from each bill
determined at the Base Rate shall be the product of the total
kilowatt-hours for which the bill is rendered multiplied by the
Adjustment Rate.
Issued by: S. P. Reynolds, Vice President-Rates
Issued on: Effective: January 2, 1986
•
PACIFIC GAS AND ELECTRIC COMPANY Supplement No.
FERC Rate .Schedule No. R-1 Supersedes Supplement No.
Page 21 of 34
VI.4. Base Rates
The Base Rates are the rates for service under Rate Schedule R-1
under this Agreement.
VI.5. Base Weighted Average Cost of Thermal and Economy Energy
The Base Weighted Average Cost of Thermal and Economy Energy is
$0.00233 per kilowatt-hour of sales to Redding. Thermal energy is
electric energy where the source of energy for the prime mover is
heat. Economy energy is electric energy produced from a source
outside PGandE's system and substituted for energy that could have
been produced by a loss economical source in the Pound` systc .
VI.6. Record Period
The volumes of thermal and economy energy, fuel related thereto, and
electric energy consumed, purchased, and sold, shall be those
recorded during the twelve calendar month period ending at the end
of the second month prior to the month in which the Revision Date
occurs.
VI.7. Revision Dates
Each Revision Date is the first day of each calendar month. The
first Revision Date for Redding will be January 1, 1986, when the
first adjustment rate for Redding will become effective. On each
Issued by: S. P. Reynolds , Vice President-Rates
Issued on: Effective: January 2, 1986
•
PACIFIC GAS AND ELECTRIC COMPANY Su lement No. _
FERC Rate Schedule No. R-1 Supersedes Supplement No.
Page 22 of 34
Revision Date, PGandE shall , in accordance with the provisions of
this Part VI , place into effect an increase or decrease in the
Adjustment Rate then in effect to reflect changes in the average
cost of thermal and economy energy.
VI.8. Adjustment Rate
(a) The Adjustment Rate, to become effective for meter readings on
and after each Revision Date and continuing thereafter until
the next Adjustment Rate becomes effective in accordance
herewith, shall be the arithmetic sum of an Offset Rate and a
Balancing Rate, each multiplied by 1.002 (to adjust for
franchise expense) and carried to the nearest $0.00001 per
kilowatt-hour.
(b) The Offset Rate shall be the difference, as set forth in
paragraph VI.9 below, between the current weighted average
thermal and economy energy cost per kilowatt-hour of sales to
Redding and the Base Weighted Average Cost of Thermal and
Economy Energy.
(c) The Balancing Rate shall be an amount per kilowatt-hour of
Redding sales necessary to amortize the accumulated balance in
the ECA-COR, FERC Account Nos. 186 and 253. If the accumulated
balance in that account, whether debit or credit, is 10 percent
or more of the annual offset revenue, calculated by utilizing
Issued by: S. P. Reynolds , Vice President-Rates
Issued on: Effective: January 2, 1986
• •
PACIFIC GAS AND. ELECTRIC COMPANY Su lement No.
FERC Rate Schedule No. R-1 Supersedes Supplement No.
Page 23 of 34
the most current effective Offset Rate and the Record Period
sales, the Balancing Rate, as set forth in paragraph VI.11
below, will be increased by 25 percent and such adjustment will
continue until such time as the balancing account is 5 percent
or less of the product of the most recent Offset Rate and
Record Period sales, at which time the 25 percent increase will
cease. The procedures for maintaining the ECA-COR and for
determining the Balancing Rate are set forth in
paragraphs VI. 11 and VI.12 below.
VI.9. Offset Rate
The Offset Rate shall be determined by dividing (1) the amount of
the Current Cost of Thermal and Economy Energy determined as
specified below, by (2) the Record Period kilowatt-hours of
applicable Redding sales, and (3) subtracting the Base Weighted
Average Cost of Thermal and Economy Energy.
VI.10. Current Cost of Thermal and Economy Energy
The Current Cost of Thermal and Economy Energy shall be: (1) the
volumes of gas and of each type of oil and coal fuel used by PGandE
for electric generation in the Record Period (excluding fuel
receipts in payment for electric service) , expressed in millions of
Btu, and the volumes of geothermal production and of nuclear energy
Issued by: S. P. Reynolds, Vice President-Rates
Issued on: Effective: January 2, 1986
•
PACIFIC GAS AND ELECTRIC COMPANY Supplement No.
FERC Rate Schedule No. R-1 Supersedes Supplement No.
Page 24 of 34
production, expressed in kilowatt-hours, multiplied by the current
price of each set forth below; plus (2) the volumes of purchased
thermal and economy energy in the Record Period multiplied by the
actual average energy rates for such purchases in the most recent
month in the Record Period for which such rates are available;
multiplied by (3) the ratio of applicable sales to Redding to total
PGandE system sales for the Record Period, and further multiplied
by (4) 0.959 to reflect the estimated difference between system and
jurisdictional losses. The current price of gas fuel shall be the
applicable rate under CPUC Schedule No. G-55 or its successor
expressed in dollars per million Btu, in effect the last day of the
Record Period. The current price of oil and coal fuel shall be the
average cost in dollars per million Btu of each type from inventory
(FERC Account No. 151) in the last month of the Record Period. The
current price of geothermal steam shall be the price per
kilowatt-hour of geothermal plant output (including payments for
effluent disposal ) of steam producers effective for production in
the last month of the Record Period. The current price of nuclear
fuel shall be the weighted average unit rate of amortization
expressed in dollars per kilowatt-hour of nuclear fuel assemblies
in-core, including an allowance for lease charges, transportation,
and storage of spent fuel assemblies, in the last month of the
Record Period.
Issued by: S. P. Reynolds , Vice President-Rates
Issued on: Effective: January 2, 1986
•
PACIFIC GAS AND ELECTRIC COMPANY Su lement No.
FERC Rate Schedule No. R-1 Supersedes Supplement No.
Page 25 of 34
VI.11. Balancing Rate
The Balancing Rate per kilowatt-hour sold shall be determined by
dividing (1) the balance in the ECA-COR at the end of the latest
month at the time of the computation being made under the provisions
of this Part VI, by (2) the Record Period kilowatt-hours of
applicable sales to Redding.
VI.12. Electric Energy Cost Adjustment Account
Effective January 1, 1986, PGandE shall maintain an ECA-COR.
• Entries shall be made to this account at the end of each month as
follows:
(a) A debit entry, if positive (credit entry, if negative) equal
to:
(1) the Redding recorded expense for thermal energy and for
purchased thermal and economy energy during the month,
less
(2) the amount of revenue billed during the month under the
Offset Rate (not including the associated adjustment for
franchise expense) , less
(3) an amount equal to the energy sold to Redding to which the
Adjustment Rate is applicable, multiplied by the Base
Weighted Average Cost of Thermal and Economy Energy, less
Issued by: S. P. Reynolds, Vice President-Rates
Issued on: Effective: January 2, 1986
•
PACIFIC GAS AND ELECTRIC COMPANY Supplement No.
FERC Rate Schedule No. R-1 Supersedes Supplement No.
Page 26 of 34
(4) the amount of total revenue billed during the month for
the energy component of intersystem transactions allocated •
to applicable Redding sales as set forth in item (e)
below, less
(5) Redding's portion of total recorded fuel expense
associated with fuel receipts in payment for electric
service, but not to exceed the expense for fuel actually
used to provide such service.
(b) A credit entry, if 'positive (debit entry, if negative) equal to
the amount of revenue billed during the month under the
Balancing Rate (not including the associated adjustment for
franchise expense).
(c) If PGandE received cash refunds including any associated
interest from any of its gas or geothermal or purchased thermal
and economy energy suppliers on and after the effective date of
this Agreement, the amount thereof associated with sales of
electricity to Redding shall be recorded as a credit to ECA-COR
except that in the event the nonjurisdictional portion of any
refund or refunds is passed through directly to other rate-
` payers , the portion of such refund or refunds attributable to
Redding shall be passed through to Redding as a credit to
bills, and PGandE shall not record such refund in this account.
Issued by: S. P. Reynolds, Vice President-Rates
Issued on: Effective: January 2, 1986
• . •
PACIFIC GAS AND ELECTRIC COMPANY Supplement No.
FERC Rate Schedule No. R-1 Supersedes Supplement No.
Page 27 of 34
Cash refunds associated with purchases of coal , oil , or nuclear
fuel shall be recorded as a credit to the appropriate inventory
account.
(d) A debit entry, if the ECA-COR balance is positive (credit
entry, if negative), for interest at an Interest Rate equal to
1/12 the rate determined in accordance with
Section 35.19a(a)(2)(iii )(A) of FERC Regulations, 18 C.F.R.
§ 35. 19a(a)(2)(iii )(A) , as it may be amended.
The Interest Rate will be applied to the average of the
balance in this account at the beginning of the month and the
balance in this account after entries (a) , (b) , and (c) above.
(e) Items (a) (1), (4) and (5) , and item (c) above in any month
shall be determined by multiplying PGandE's total expense or
revenue associated with such items by the ratio of applicable
energy sales to Redding to total PGandE system sales.
(f) If at any time Redding does not purchase energy from PGandE for
three (3) consecutive months or if the Sale Agreement
terminates, any debit balance in the ECA-COR shall become due
from Redding on demand by PGandE and any credit balance in the
ECA-COR at such time shall be refunded to Redding by PGandE.
Issued by: S. P. Reynolds , Vice President-Rates
Issued on: Effective: January 2, 1986
•
PACIFIC GAS AND ELECTRIC COMPANY Supplement No.
FERC Rate Schedule No. R-1 Supersedes Supplement No.
Page 28 of 34
PART VII
•
VII.1. The provisions of this Agreement are subject to acceptance by FERC
of this Agreement in its entirety and without change or condition
unsatisfactory to either Party. Each term of this Agreement is in
consideration and support of every other term herein. Should FERC
modify any provision of this Agreement in a manner unsatisfactory to
either Party, this Agreement shall not become effective but shall be
deemed terminated and withdrawn, and shall not constitute any part
of the record in any FERC proceeding or be used for any other
purposes whether between the Parties or between any Party and Third
Parties. In the event that FERC action with respect to this
Agreement results in the termination and withdrawal of this
amendment, PGandE and Redding shall use their best efforts to
renegotiate this Agreement.
VII .2 The Parties agree that, for any change in rates made pursuant to
this Agreement, PGandE may utilize an "Abbreviated Notice of Rate
Change" in filing all adjustments to Rate Schedule FERC No. R-1
pursuant to Section 35. 13 of the Commission's Regulations under the
Federal Power Act, 18 C.F.R § 35.13. Said Abbreviated Notice of
Rate Change shall consist of: (a) a filing letter containing any
necessary calculations made in accordance with the formulas set
Issued by: S. P. Reynolds , Vice President-Rates
Issued on: Effective: January 2, 1986
• •
PACIFIC GAS AND ELECTRIC COMPANY Su lement No.
FERC Rate Schedule No. R-1 Supersedes Supplement No.
Page 29 of 34
forth herein; (b) the underlying CPUC order or decision upon which
the adjustment is based; and (c) such other limited data as the
FERC, its staff, or Redding may specifically require. Redding
agrees to support a request by PGandE that the FERC waive the
requirements of Section 35.13 to the extent that such requirements
are not satisfied by the format described above.
VII.3. The Parties agree that Redding will seek either no suspension or
no more than a one-day suspension of the effective date of any
adjustment made pursuant to this Agreement. In the event that any
Party does request a one-day suspension in connection with any
proposed adjustment in Rate Schedule FERC No. R-1, it is agreed that
the proposed effective date of such adjustment will be deemed to be
the day before the effective date of the relevant CPUC decision such
that the effective date for the rates established under this
Agreement, with a one-day suspension, will be the same as the
effective date of such CPUC decision. A one-day suspension, hearing
and other appropriate relief pursuant to Section 205 of the Federal
Power Act shall be requested only on the basis of PGandE's alleged
failure to accurately apply the terms of this Agreement to the
computation of the level of rate components in Parts II and IV of
this Agreement. A request fora one-day suspension, hearing and
relief shall not be based on disagreement with the formulas,
Issued by: S. P. Reynolds , Vice President-Rates
Issued on: Effective: January 2, 1986
111) -
PACIFIC GAS AND ELECTRIC COMPANY Su lent No.
FERC Rate Schedule No. R-1 Supersedes Supplement No.
Page 30 of 34
procedures and mechanisms agreed to herein.
The Parties agree to make or support any requests for waiver of
Commission Rules and Regulations necessary to implement ,the
adjustments contemplated herein as of the effective dates provided
in this Agreement, provided that PGandE provides Redding with a copy
of the final version of its proposed FERC filing, including •
supporting data and related CPUC orders, at least thirty (30) days
prior to the date of filing with the FERC unless otherwise agreed by
• the Parties.
VII.4. Since the revised rates contemplated under this Agreement cannot be
specified until after the CPUC has issued an order establishing a
given retail rate adjustment, and since the filing of the Abbre=
viated Notices of Rate Change contemplated under this Agreement
will , of necessity, occur after the effective date for the adjust-
ments agreed to by the Parties, the Parties therefore agree that any
increase or decrease in revenues resulting from each adjustment
contemplated under this Agreement may be collected or refunded, if
necessary, by PGandE as a separately identified surcharge or credit,
retroactively to the effective dates for each such adjustment
pursuant to this Agreement. This surcharge or credit will be
derived from a recalculation of bills issued by PGandE under Rate
Issued by: S. P. Reynolds, Vice President-Rates
Issued on: Effective: January 2, 1986
I
PACIFIC GAS AND ELECTRIC COMPANY Supplement No.
FERC Rate Schedule No. R-1 Supersedes Supplement No.
Page 31 of 34
Schedule FERC No. R-1 from the date of the FERC order permitting the
proposed rate to become effective, retroactive to the effective date
for the proposed rate established pursuant to this Agreement. In
the event that any rate adjustment made hereunder results in the
imposition of a surcharge, Redding shall have the option of paying
such surcharge in lump sum or paying such surcharge in equal monthly
payments up to, but not exceeding 12 months. All surcharges or
refunds made pursuant to this Agreement shall be with interest
computed in accordance with Section 35. 19a(a)(2)(iii )(A) of FERC
Regulations, 18 C.F.R. § 35. 19a(a)(2)(iii )(A) , as it may be amended.
VII.5. Except as otherwise provided in this Agreement, nothing in this
Agreement shall be construed as affecting Redding's rights under
Section 205 and 206 of the Federal Power Act. Nothing in this
Agreement shall be construed as affecting in any way the right of
PGandE under this Agreement unilaterally to make application to the
FERC or its successor for a change in rates under Section 205 of the
Federa' Power Act and pursuant to the Commission 's Rules and
Regulations promulgated thereunder, nor shall either Puarty be deemed
to waive its rights to object to or seek rejection of any filing or
action by the other Party which is inconsistent with the provisions
of this Agreement, provided that rate levels in Rate Schedule
Issued by: S. P. Reynolds, Vice President-Rates
Issued on: Effective: January 2, 1986
I
PACIFIC GAS AND ELECTRIC COMPANY Supplement No.
FERC Rate Schedule No. R-1 Supersedes Supplement No.
Page 32 of 34
No. R-1 will not be subject to change by PGandE or objection by
Redding prior to January 1, 1987, except pursuant to the terms of
this Agreement.
Notwithstanding the preceding proviso, the Parties agree that
PGandE may, at its election, file another general rate increase
under Section 205 of the Federal Power Act on or after
August 1, 1986, consisting of two phases affecting Rate Schedule
No. R-1 rates, with a proposed effective date no earlier than
October 1, 1986. It is further agreed that any such general rate
increase filing by PGandE will contain PGandE's consent to a
January 1, 1987 effective date for Phase I of the proposed increase
and a March 1, 1987 effective date for Phase II of theproposed
increase. .
VII.6. Should Section 205 of the Federal Power Act or Section 35. 13 of the
FERC Regulations or any successor law or regulation be unavailable
as a means of changing the rates established pursuant to this
Agreement, PGandE reserves the right to change rates pursuant to
Section 206 of the Federal Power Act or any successor law or
pursuant to any other applicable law to the extent permitted by this
Agreement.
Issued by: S. P. Reynolds, Vice President-Rates
Issued on: Effective: January 2, 1986
• •
1
d •
PACIFIC GAS AND ELECTRIC COMPANY Supplement No.
FERC Rate Schedule No. R-1 Supersedes Supplement No.
Page 33 of 34
VII.7. Ambiguities or uncertainties in the wording of this Agreement shall
not be construed for or against either Party, but shall be construed
in a manner which most accurately reflects the intent of the Parties
when this Agreement or any part thereof was executed.
VII.8. This Agreement shall be effective as of January 2, 1986, unless
Redding requests a one-day suspension of this Agreement in which
event this Agreement shall be effective as of January 1, 1986.
VII.9. This Agreement shall remain in effect until changed, superseded or
terminated, in whole or in part, by agreement between the Parties,
by unilateral rate or rate schedule changes filed with the FERC in
accordance with this Agreement and accepted for filing, or by the
establishment of new rates or rate schedule provisions by order of
the FERC, provided that (1) on or after January 1, 1987 Redding may
terminate Part III and paragraphs IV.4, VII .2, VII.3 and VII.4 of
this Agreement by giving written notice to PGandE, and (2) this
Agreement shall terminate no later than the termination date of the
Sale Agreement.
Issued by: S. P. Reynolds , Vice President-Rates
Issued on: Effective: January 2, 1986
•
PACIFIC GAS AND ELECTRIC COMPANY Supplement No.
FERC Rate Schedule No. R-1 Supersedes Supplement No.
Page 34 of 34
<5ttL ii144Yr0(4(7 44/1
STE rHEN P. REYNOLuS City of 'edding, 'ayor
Vice President - Rates
Pacific Gas and Electric Company
Date: Ma.^-ct 21 1986
it
Issued by: S. P. Reynolds, Vice President-Rates
Issued on: Effective: January 2, 1986