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HomeMy WebLinkAboutReso. 1986 - 293 - Approving an amendment to part IV temporary rate implementation procedure for diablo canyon units no. 1 and 2 of the rate settlement agreement entered into by and between the city of redding and pacific gas and electric 4 RESOLUTION NO. $1.7•293 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF REDDING APPROVING AN AMENDMENT TO PART IV, TEMPORARY RATE IMPLEMENTATION PROCEDURE FOR DIABLO CANYON UNITS NO. 1 AND 2 , OF THE RATE SETTLEMENT AGREEMENT ENTERED INTO BY IAND BETWEEN THE CITY OF REDDING AND PACIFIC GAS AND ELECTRIC COMPANY. WHEREAS, City Council adopted Resolution No. 86-76 on April 7, 1986 , approving a Rate Settlement Agreement between the City of Redding and Pacific Gas and Electric Company; and WHEREAS, on October 17, 1986 , Pacific Gas and Electric Company filed a requested change to said Agreement with the Federal Energy Regulatory Commission, a true copy of which is attached hereto and incorporated herein; and WHEREAS, said changes are deemed to be in the beset interests of the citizens of the City of Redding; and WHEREAS, the City of Redding has been asked to file a letter of concurrence with the Federal Energy Regulatory Commission; NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Redding as follows: 1 . That the foregoing recitals are true and correct; 2. That the City Council of the City of Redding hereby approves the attached changes to the Rate Settlement Agreement, to be effective January 2, 1986, and hereby waives the requirements of Section 35. 13 of the Federal Energy Regulatory Commission' s Regulations to the extent necessary for acceptance of this filing; and that, if . . • • necessary, a letter so stating this shall be sent to the Federal Energy Regulatory Commission, signed by the City Manager. I HEREBY CERTIFY that the foregoing Resolution was introduced and read at a regular meeting of the City Council of the City of Redding on the 3rd day of November , 1986, and was duly adopted at said meeting by the following vote: AYES: COUNCIL MEMBERS: Carter, Dahl , Johannessen, & Fulton NOES: COUNCIL MEMBERS: None ABSENT: COUNCIL MEMBERS: Gard ABSTAIN: COUNCIL MEMBERS: None /LA:)641.41_,_ /-7:9 LEE D. FULTON, M.D. , Myyor City of Redding ATTEST:27,-Aff ETHEL A. NICHOLS, City Clerk FORM PPROVED: i eieca RA DALL A. HAYS, ity Attorney -2- 10/20/86 Cover Letter & Volumes I & II to City A • Cover Le rs to Dir-Elec. Utility ✓ City Clerk PACIFIC GAS ELECTRIC AND N C RIC C © MPAN'Y 77 BEALE STREET, SAN FRANCISCO, CALIFORNIA 94106 TELEPHONE (415) 972.2931 P.O. BOX 7442, SAN FRANCISCO, CALIFORNIA 94120 TELELOPIER (415) 543-7813 LOUIS E. VINCENT - ATTORNEY AT LAW October 17, 1986. . ,,,,*„ Za II Mr. Kenneth F. Plumb, Secretary OCQ 1986 Federal Energy Regulatory Commission 825 North Capitol Street, N.E. YP REDI�IIJG Washington, DC 20426 Dom, Dear Mr. Plumb: RE: Docket No. ER86-107-000 Changes to the Resale Settlement Agreements' for CP National ; Resort Improvement District Nol. 1; Shasta Dam Area PUD; City of Redding; and Northern California Power Agency Between March 18 and April 15, 1986 Pacific Gas and Electric Company (PGandE) filed settlement agreements between PGandE and Northern California • Power Agency (NCPA) , CPNational Corporation (CPN) , Resort Improlvement District No. 1 (RID#1) , City of Redding, California (Redding) and Shasta Dam Area Public Utility District (Shasta) . These settlement agreements were filed as part of Rate Schedules FERC No. 84, FERC No. R-2, FERC No. 90, FERC No. 89 and FERC No. R-1, respectively and were accepted for filing and given effective dates by the Federal Energy Regulatory Commission (FERC) on June 19, 1986 in Docket Nos. ER86-107-001 and ER86-107-002. In order to meet certain requirements contained in the above mentioned settlement agreements, PGandE herewith submits for filing certain changes to the rates, revenes, terms and conditions covering those services rendered by PGandE pursuant to the above agreements. Diablo Adjustment I . PGandE proposes that the Temporary Rate Implementation Procedure for Diablo Canyon Unit Nos. 1 and 2 shown as Part VI of the rate settlement agreements for CPN, RID#1 , and Shasta and Part IV of the rate settlement agreement for Redding (Diablo Procedure) be replaced with a revised Diablo Procedure which is enclosed as Exhibit 1. The revised Diablo Procedure includes: (i ) a rate of $.00605 per kilowatt-hour, effective January 1 , 1986, will be charged Shasta by PGandE for Diaglo Unit No. 1; and (ii ) a rate of $.00391 per kilowatt-hour, effective March 13, 1986 (the commercial operation date) , to be charged CPN, RID#1 and Shasta by PGandE for Diablo Unit No. 2; Redding will also be charged a rate of $.00391 per kilowatt-hour, effective June 1, 1986 for Diablo Unit No. 2. RECEIVED nr n !1102P • • Mr. Kenneth F. Plumb -2- October 17, 1986 As explained in the Diablo Procedure, the Diablo Unit No. 1 rate is based on approximate fuel savings plus Operating and Maintenance (O&M) expenses. The rate for Diablo Unit No. 2 is based only on fuel 'savings. This treatment is due to the California Public Utilities Commission (CPUC) determining that initial Diablo rate and revenue treatment for the retail jurisdiction shall be defined as fuel savings, while interim Diablo treatment (subsequent to an initial rate and prior to a final ratemaking and prudency decision for Diablo by the CPUC) shall be defined as fuel savings plus O&M expenses. Fuel savings are defined by pricing Diablo generation at the fuel price of other types of generation which Diablo is displacing when operating, less the cost of nuclear fuel used by Diablo which is recovered through the Fuel Cost Adjustment (FCA) . The present and revised Diablo Procedure also includes a Diablo Balancing Account (DBA) . The purpose of the DBA is to track a resale customerl's fuel savings for Diablo so that any over or undercollection of fuel savings can be refunded to or collected from that customer. The over oro undercollection occurs because estimated fuel savings shown in the • settlement agreements are different than the actual fuellisavingsfrom CN Diablo. The changes in the DBA are as follows: (i) the DBA for Diablo Unit No. 1 has been removed from Part VI of the settlement agreements for RID#1 and Shasta as these customers have paid their ��espective fuel savings for Diablo Unit No. 1 as part of the settlement agreements approved June 19, 1986 by the FERC; and (ii) a new DBA four Diablo Unit No. 2 is now included in the Diablo Procedure. 1985 CPUC Attrition II. PGandE proposes that amounts of $41,433, $387, $209 and $136,120 for the calendar year 1985 be paid to CPN, RID#1, Shasta, and NCPA respectively by PGandE as a result of CPUC Decision Nos. 85-12-071 and 86-05-016, which decreased the amount of revenues PGandE may collect' in the retail jurisdiction for 1985 Attrition costs. This adjustment is necessary as the settlement agreements effective during 1985 for CPN, RID#1, Shasta, and NCPA (Redding did not have a 1985 settlement agreement) provide that most CPUC-authorized changes in revenues be reflected in CPN's, RID#1's, Shasta 's and NCPA's rates. This has been done by comparing the amount of revenues to be collected from each customer using 19851 reduced rates (which were reduced to reflect the CPUC Decisions) with tike 1985 revenues already collected from each customer and refunding the difference or amount for each customer which is shown above. The enclosed Exhibit 2 provides an explanation and workpapers1 necessary for calculating the amount owed CPN, RID#l, Shasta, and NCPA by PGandE. • • ( Mr. Kenneth F. Plumb -3- October 17, 1986 1985 and. 1986 CPUC Attrition, Helms and Humboldt III. PGandE proposes that the rates for CPN, RID#1, Redding, and Shasta which were accepted in Docket Nos. ER86-107-001 and ER86-107-00,2 be adjusted for CPUC-authorized retail revenue changes as a result of CPUC Decision Nos. 85-12-071 and 86-05-016 (1985 Attrition) , 86-08-025 • (1986 Attrition) , and CPUC Advice Filing No. 1112-E (Humboldt Bay Nuclear Power Plant Retirement, Helms Pumped Storage Plant ) . The enclosed Exhibit 3 includes the following: (a) Present and proposed revenue calculations. i (b) An explanation and workpapers necessary for calculating the proposed rates. (c) The present January 1, 1986 settlement rates adjusted to arrive at the proposed January 1, 1986 settlement rates (Redding's present and proposed rates are to be effective June 1, 1986) . As shown in Exhibit 3, the net revenue increase is $407,549 (3.8 percent) ; $946 (2.7 percent) ; $8,533 (6.8 percent) ; and $12,474 (3.2 percent) for CPN, RID#1, Redding, and Shasta, respectively. Pursuant to the terms and conditions of the NCPA settlement agreement, - no change in rates is required. A summary of present and proposed rates is as follows: Billing Present Proposed Rate Schedule No. R-2 Units Rates Rates Customer Charge $/month 605.75 586.24 Demand Charge $/kW-month 8.921 8.634 Non-FCA Energy Charge $/kWh .00792 .00774 Voltage Discount $/kW-month .64 .62 Diablo Energy Adjustment Rate- $/kWh .0086 1 .0086 DC1 Diablo Energy Adjustment Rate- $/kWh none .00391 DC2 Energy Adjustment Rate $/kWh .00182 .00182 Rate Schedule No. 90 Customer Charge $/month 290.67 281.31 Demand Charge $/kWh-month 9.069 , 8.777 Non-FCA Energy Charge $/kWh .00842 .00822 Diablo Energy Adjustment Rate- $/kWh .00605 .00605 DC1 Diablo Energy Adjustment Rate- $/kWh none .00391 DC2 - i • • Mr. Kenneth F. Plumb -4- October 17, 1986 Billing Present Proposed Rate Schedule No. R-1 Units Rates Rates Customer Charge $/month 1,849.74 1,790.18 Demand Charge $/kW-month 10.403 . 10.068 Non-FCA Energy Charge $/kWh .00805 .00787 Diablo Energy Adjustment Rate- $/kWh .00605 .00605 DC1 Diablo Energy Adjustment Rate- $/kWh none .00391 DC2 Rate Schedule No. 89 Customer Charge $/month 94.18 91. 15 Demand Charge $/kW-month 7.712 7.464 Non-FCA Energy Charge $/kWh .00786 .00768 Voltage Discount $/kW-month .64 .62 Diablo Energy Adjustment Rate- $/kWh .00815 .00605 DC1 Diablo Energy Adjustment Rate- $/kWh none .00391 DC2 ( IV. PGandE proposes that Part II , Rate Schedules - 1986 for CPN, RID#1, Redding, and Shasta and Part III , Resale Rate Adjustment hlechanism, of the settlement agreements for CPN, RID#1, Redding, Shastab, and NCPA be revised for the proposed rates and CPUC revenue changes (as shown in Appendix I) , _respectively, and that the revised Parts II and III replace present Parts II and III . The revised Parts II and III are attached as Exhibit 4. Fuel Cost Adjustment V. PGandE proposes that the FCA for NCPA, CPN, RID#1, Redding, and Shasta be revised to include new language which allows for the calculation of a resale customer's Adjustment Rate when the kilowatt-hours in the Record Period are zero due to the resale customer not taking service from PGandE during the Record Period. As explained in the FCANthe Record Period is a prior 12-month period used to calculate the Adjustment Rate. The Adjustment Rate is defined in each customer's FCA part as follows: (i) Part VIII for CPN, RID#1, and Shasta; (ii) Part VI for Redding; and (iii ) Part V for NCPA. Under the revised language, calculation of the Adjustment Rate will use the total kilowatt-hour sales tdall other resale customers during the Record Period when kilowatt-h9ur sales to a resale customer are zero. When the customer has once again purchased energy during the Record Period, the Adjustment Rate will be calculated as defined before the above change. • e Mr. Kenneth F. Plumb -5- October 17, 1986 The revised language is shown as item (d) in Paragraphs MIII.8, VI.8 and V.8, "Adjustment Rate," for each customer. Paragraph 8 is included in each customer's FCA part as follows: (i) Part VIII for CPN, RID#1, and Shasta; (ii) Part VI for Redding; and (iii) Part V for NCPA. Exhibit 5 contains each customer's revised Paragraph 8. VI. Copies of the CPUC decisions mentioned herein are included as Exhibit 6. Enclosed for filing are six copies of the following documents: 1. Revised Part VI for CPN, RID#1, and Shasta and Part IV for Redding (Exhibit 1) ; 2. Explanation and workpapers supporting the 1985 calendar year lump-sum amount of $41,433, $387, $209 and $136,120 sowed CPN, RID#1, Shasta, and NCPA, respectively, by PGandE for a CPUCLordered reduction to 1985 Attrition (Exhibit 2); 3. Explanation, and calculation of proposed settlement rates, including present and proposed revenues (Exhibit 3); 4. Revised Parts II and III of the settlement agreements for CPN, RID#1, Shasta, NCPA, and Redding (Exhibit 4) ; 5. Changes in Fuel Cost Adjustment language as shown in revised Parts VIII of the settlement agreements for CPN, RI41, and Shasta; revised Part VI for Redding and revised Part V for NCPA (Exhibit 5); 6. Copies of CPUC decisions mentioned herein (Exhibit 6) ; 7. Federal Register notice pursuant to Section 35.8 of the Commission's Regulations; and 8. Letters of concurrence to this filing from NCPA, CPN, and RID#1. Request for Waiver PGandE, CPN, RID#1, and Shasta have agreed to an effective date of January 1 , 1986 for the above changes, Redding has agreed to anleffective date of June 1 , 1986 for the above changes. Such dates are necessary to properly implement the rate settlement agreements. PGandE therefore regcests, in accordance with Section 35.11 of the Commission's Regulations, waiver of the notice requirements in Section 35.3 of these regulations and acceptance for filing with an effective date as agreed by the parties. PGandE requests that the Commission, waive such requirements of Section 35. 13 of its Regulations as may be necessary to permit acceptance of this filing. No customer under any other rate schedules will be affected if such waiver is granted. • • `. Mr. Kenneth F. Plumb -6- October 17, 1986 Letters of concurrence in this filing from NCPA, CPN and RID#1 are enclosed. The letters state that NCPA, CPN, and RID#1 support 1) the proposed rate schedule changes; 2) the requested effective dates; and 3) waiver of the requirements of Section 35.13 of the Commission's Regulations to the extent necessary for acceptance of this filing. It is FGandE's understanding that the Redding Electric Department will recommend, at the November 3, 1986 Redding City Council meeting, that a letter 01 concurrence supporting this filing be sent to PGandE. A letter of concurrence has been requested from Shasta. These letters will be filed as soon as 'received. Enclosed is a check in the amount of $3,100.00 to cover the filing fees specified in Section 381.503 of the Commission's Regulatidns.� PGandE requests that all correspondence, pleadings and other communications concerning this filing be served upon the following: Douglas A. Oglesby, Esquire Louis E. Vincent, Esquire PACIFIC GAS AND ELECTRIC COMPANY Post Office Box 7442 San Francisco, California 94120 Telephone: (415) 972-2981 PGandE hereby submits an additional copy of the transmittal letter to the proposed filing and respectfully requests that the Commission acknowledge receipt of this document by returning a file-endorsed copy in the enclosed, stamped, _self-addressed envelope. As evidenced by the attached certificate of service, a copy of this filing has been served upon NCPA, CPN, RID#l, Redding, Shasta, and the California Public Utilities Commission. Copies of the rate schedule changes tendered for filing herewith are being made available for public inspection in a convenient form and place during ordinary business hours at PGandE's principal office in San Francisco and at its regional offices in Sacramento, Santa Rosa and San Francisco, California. Respectfully submitted, LOUIS E. VINCENT Attorney Attachment 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 (DC1) , the Parties hereby adopt a mechanism designed to provide PGandE cost recovery for DC1 from Redding, consistent with the CPUC's interim decision on DC1 (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 DC1 Costs in retail rates. The mechanism provides for developing and charging a Diablo Energy Adjustment Rate - DC1 to Redding based on the provisions of this Part IV. IV.2. In an interim decision concerning DC1 (No. 85-12-085) , the CPUC authorized PGandE to collect an annual revenue requirement of $388 million as of January 1, 1986 through the retail Diablo Canyon Adjustment Clause (DCAC) for DC1. IV.3. Commencing June 1, 1986, the Diablo Energy Adjustment Rate-DC1 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. 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 12 of 34 IV.4 If the CPUC issues any decision modifying or replacing the interim rate mechanism authorized in CPUC Decision No. 85-12-085 for recovery of DC1 Costs until the CPUC issues a final D01 ratemaking and prudency decision, the Parties will adjust the form or level , as appropriate, of the Diablo Energy Adjustment Rate-DC1 to Redding, unless the Parties agree 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 DC1 to provide for recovery in resale rates of Redding's 1 proportionate share of DC1 Costs authorized by the CPUC. Any CPUC decision related to Diablo Canyon Unit 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 DC1 ratemaking and prudency decision , Redding's share of PGandE' s revenue requirement for DC1 shall be computed in accordance with Part V of this Agreement. 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 13 of 34 In order to track, for informational purposes only, Redding's share of PGandE's revenue requirement for DC1 as filed with the CPUC, PGandE will establish and employ a Diablo Canyon Adjustment Account for Redding (DCAACOR1) which will record an estimate of Redding's share of such revenue requirement for DC1. The purpose of making monthly entries to the DCAACOR1 is (1) to give PGandE and Redding an estimate of the balance Redding might owe PGandE on the effective date of the final DC1 ratemaking and prudency decision from the CPUC if PGandE's estimate of DC1'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 DC1 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 by Redding under the Diablo Energy Adjustment Rate-DC1 and all similar mechanisms. Starting June 1986, (i ) a debit entry of $12,373 shall be made to the DCAACOR1 each month based on Appendix II to this Part IV. If PGandE files a revised revenue requirement for DC1 with the CPUC in 1986, this revised revenue requirement shall be the basis for calculation of a new annual revenue requirement used to determine 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 the monthly debit entry to the DCAACOR1 from the month in which the revised revenue requirement is filed with the CPUC. Such new debit entry shall be calculated on the basis of the then-current FERC jurisdictional allocation and Redding's share thereof as computed in accordance with Appendix II. In addition, (ii) a credit entry shall be made to the DCAACOR1 each month equal to Redding's allocated portion of PGandE's actual fuel savings from DC1, or such succeeding basis as the CPUC may authorize for the interim recovery of DC1 Costs in retail rates , for that month. A monthly debit entry if the DCAACOR1 balance is a debit balance (credit entry if a credit balance) for interest calculated at an interest rate 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 (Interest Rate) , shall also be made to the DCAACOR1. The Interest Rate will be applied to the average of the balance in the DCAACOR1 account at the beginning of the month and the balance in the DCAACOR1 account after entires (i) and (ii) above. IV.6. Upon issuance of a final DCI ratemaking and prudency decision by the CPUC which authorizes a mechanism to adjust retail base rates, ECAC or other rates to recover DC1 Costs, PGandE will discontinue 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 • charging the Diablo Energy Adjustment Rate-DC1 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 DC1 Costs through Redding's base rates, FCA or another rate mechanism, in accordance with 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 DC1 from June 1, 1986 until the date the mechanism becomes effective, PGandE shall collect or refund the difference between Redding's proportionate share of money derived from the mechanism ultimately adopted for DC1 by the CPUC and any monies collected by the Diablo Energy Adjustment Rate-DC1 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 DC1 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 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 16 of 34 Power Act; provided that PGandE shall not seek to modify through any such filing Redding's obligations incurred as provided herein for recovery of Redding's share of DC1 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. Page 16A of 34 IV.8. In accordance with the intention of PGandE and Redding to establish a rate mechanism to recover Costs for Unit No. 2 of Diablo Canyon Nuclear Power Plant (DC2) , the Parties hereby adopt a mechanism designed to provide PGandE cost recovery for DC2 from Redding, consistent with the CPUC's initial decision on DC2 (No. 86-01-054) 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 DC2 Costs in retail rates. The mechanism provides for developing and charging a Diablo Energy Adjustment Rate-DC2 to Redding based on the provisions of this Part IV. IV.9. On January 23, 1986 the CPUC issued Decision No. 86-01-054 which authorized PGandE to collect, through the retail Energy Cost Adjustment Clause (ECAC) , PGandE's fuel savings from D02 effective on the commercial operation date of DC2. This initial rate mechanism will be in effect until the CPUC issues an anticipated future decision which authorizes a different, interim rate adjustment. 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 16B of 34 IV.10. Commencing June 1, 1986, the Diablo Energy Adjustment Rate-DC2 to be charged by PGandE and paid by Redding shall be 3.91 mills per kWh as calculated on Appendix III to this Part IV. IV.11 Upon acceptance for filing of this revised Part IV by the FERC, PGandE will establish a memorandum account for the City of Redding Diablo No. 2 Balancing Account (CORDBA2). The CORDBA2 will track: 1) the amounts collected by PGandE through the Diablo Energy Adjustment Rate-DC2; 2) Redding's allocated portion of PGandE's fuel savings from DC2; and 3) interest associated with any under- or overcollection on the balance of the CORDBA2 after July 1, 1986. The following entries shall be made to the CORDBA2: a) Starting July 1, 1986, a debit entry at the end of each month equal to the product of Redding's kilowatt-hour energy purchases from PGandE for the previous month and the Diablo Energy Adjustment Rate-DC2. 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 16C of 34 b) Starting June 30, 1986, a credit entry effective at the end of each month equal to Redding's allocated portion of PGandE's fuel savings from DC2 included in the current month's entry to PGandE's FERC jurisdictional Fuel Cost Adjustment (FCA) mechanism for Redding. c) Starting July 1, 1986, an entry each month equal to interest on the average of the account balance at the beginning of the prior month and the account balance at the end of the prior month at the Interest Rate. This interest entry shall be a credit entry if the month's average account balance is positive and shall be a debit entry if the month's average account balance is negative. A credit account balance shall be positive as the credit balance represents fuel savings revenues still to be collected from Redding for DC2. A debit account balance shall be negative as the debit balance represents revenue collections by PGandE from the Diablo Energy Adjustment Rate-DC2 which exceed fuel savings for Redding from DC2. At December 31, 1986, the CORDBA2 balance will be transferred to a separate account to be refunded by PGandE or paid by Redding within a 12-month period starting from the month the balance is taken out of the CORDBA2 account. Such transferred balance will 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 16D of 34 accrue interest monthly at the Interest Rate as calculated using the average of the account balance at the beginning of the month and the account balance at the end of the month from the start of the 12-month period until the month in which the account balance is zero. IV.12 If the CPUC issues any decision modifying or replacing the initial rate mechanism authorized in CPUC Decision No. 86-01-54 for recovery of DC2 Costs until the CPUC issues a final DC2 ratemaking and prudency decision, the Parties will adjust the form or level , as appropriate, of the Diablo Energy Adjustment Rate-DC2 ';to Redding, unless the Parties agree to a different treatment of such CPUC decision in accordance with Part V of this Agreement 1r through another rate mechanism. Such adjustment shall be consistent with the intent of this Temporary Rate Implementation Procedure for DC2 to provide for recovery in resale rates of Redding's proportionate share of DC2 Costs authorized by the CPUC. Any CPUC decision related to DC2 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. 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 16E of 34 IV.13. Upon issuance by the CPUC of a final DC2 ratemaking and prudency decision, Redding's share of PGandE's revenue requirement for DC2 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 DC2 as filed with the CPUC, PGandE will establish and employ a Diablo Canyon Adjustment Account for Redding (DCAACOR2) which will record an estimate of Redding's share of such revenue requirement for DC2. The purpose of making monthly entries to the DCAACOR2 is (1) to give PGandE and Redding an estimate of the balance Redding might owe PGandE on the effective date of the final DC2 ratemaking and prudency decision from the CPUC if PGandE's estimate of DC2'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 DC2 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 by Redding under the Diablo Energy Adjustment Rate-DC2 and all similar mechanisms. 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 16F of 34 Starting June 1986, (i) a debit entry of $12,690 shall be made to the DCAACOR2 each month based on Appendix IV to this Part IV. If PGandE files a revised revenue requirement for DC2 with the CPUC in 1986, this revised revenue requirement shall be the basis for calculation of a new annual revenue requirement used to determine the monthly debit entry to the DCAACOR2 from the month in which the revised revenue requirement is filed with the CPUC. Such new debit entry shall be calculated on the basis of the then-current FERC jurisdictional allocation and Redding's share thereof as computed in accordance with Appendix IV. In addition, (ii) a credit entry shall be made to the DCAACOR2 each month equal to Redding's allocated portion of PGandE's actual fuel savings from DC2, or such succeeding basis as the CPUC may authorize for the interim recovery of DC2 Costs in retail rates, for that month. A monthly debit entry if the DCAACOR2 balance is a debit balance (credit entry if a credit balance) for interest calculated at the Interest Rate shall also be made to the DCAACOR2. The Interest Rate will be applied to the average of the balance in the DCAACOR2 account at thebeginning of the month and the balance in the DCAACOR2 account after entries (i ) and (ii) above. 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 16G of 34 IV.14. Upon issuance of a final DC2 ratemaking and prudency decision by the CPUC which authorizes a mechanism to adjust retail base rates, ECAC or other rates to recover DC2 Costs, PGandE will discontinue charging the Diablo Energy Adjustment Rate-DC2 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 DC2 Costs through Redding's base rtes, FCA or another rate mechanism, in accordance with 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 DC2 from June i1, 1986 until the date the mechanism becomes effective, PGandE shall collect or refund the difference between Redding' s proportionate share of money derived from the mechanism ultimately adopted for DC2 by the CPUC and any monies collected by the Diablo Energy Adjustment Rate-DC2 described herein including interest at the Interest Rate on such difference, provided the CPUC decision authorizes interest as part of implementing the mechanism. 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 16H of 34 I — IV.15. In accordance with Paragraph VII.5 of Part VII of this Agreement, PGandE may pursue such other methods of cost recovery for DC2 as it deems appropriate, including the filing of rates which include the Costs of DC2 with the FERC pursuant to Section 205 of the Federal Power Act; provided that PGandE shall not seek to modify through any such filing Redding's obligations incurred as provided herein for recovery of Redding's share of DC2 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 DC1 Total estimated 1986 PGandE DCAC Revenues from CPUC Decision 85-12-085 Issued December 18, 1985 $388,000,000 • DCAC Energy Rate $388,000,000 (line 1)/ 64,088,000,000 kWh (Advice Letter No. 1097-E, Table 2) 6.05 mills/kWh Iii 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 II DEVELOPMENT OF REDDING'S PORTION OF PGandE'S REVENUE REQUIREMENT FOR DC1 AS FILED WITH THE CPUC The monthly revenue requirement of $12,373 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) ($11,876,000/$705,600,000) $ 964,981 Times Redding's sharp)of the FERC jurisdictional portion (1.2822%) $ 12,373 (a)Based on ratio of FERC jurisdictional revenue requirement to total revenue requirement from CPUC Application No. 85-08-025. II (b)Based on ratio of energy sales in kilowatt-hours to Redding to total FERC jurisdictional energy sales in kilowatt-hours for the most recent 12 months of available recorded data (12 months ended August 31, 1986) . 1 This ratio will be revised annually on a calendar-year basis as soon as the kilowatt-hour sales data become available. 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 III DEVELOPMENT OF REDDING'S PORTION OF PGandE'S TOTAL ESTIMATED 1986 FUEL SAVINGS REVENUES FROM DC2 Total estimated 1986 PGandE Fuel Saving Revenues for CPUC Jurisdictional Customer ($22,434,000/9 percent) $ 249,267,000 1986 CPUC Jurisdictional Sales(a) 63,714,000,000 kWh Fuel Savings Rate (line 1/line 4) $ !00391/kWh (a)From CPUC Decision No. 86-01-054 issued January 23, 1986, Appendix A, page 21; $22,434,000 of Fuel Savings is divided by nine percent to arrive at total Fuel Savings, as Decision No. 86-01-054 only deals with a change to the CPUC jurisdictional Annual Energy Rate which is only nine percent of the total fuel-related cost. 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 IV DEVELOPMENT OF REDDING'S PORTION OF PGandE'S REVENUE REQUIREMENT FOR DC2 AS FILED WITH THE CPUC The monthly revenue requirement of $12,690 for Redding is calculated as follows: Yearly revenue requirement (filed on August 12, 1985 as part of CPUC Application No. 85-08-025) $705,600,000 Monthly amount ($705,600,000/12) $ 58,800,000 Times FERC jurisdictional portion(a) ($11,876,000/$705,600,000) $ 989,667 Times Redding's shas)of the FERC jurisdictional portion (1.2822%)' $ 12,690 (a)Based on ratio of FERC jurisdictional revenue requirement to total revenue requirement from CPUC Application No. 85-08-025. (b)Based on ratio of energy sales in kilowatt-hours to Redding to total FERC jurisdictional energy sales in kilowatt-hours for the most recent 12 months of available recorded data (12 months ended August 31, 1986) . This ratio will be revised annually on a calendar-year basis as soon as the kilowatt-hour sales data become available. Issued by: S. P. Reynolds, Vice President-Rates Issued on: Effective: January 2, 1986