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Methane Abatement Cost Recovery

Methane Abatement Cost Recovery. R.15-01-008 California Public Utilities Commission Belinda Gatti August 1, 2017. Agenda. Background Memorandum/Balancing Accounts Advice Letter filing. Background. Ordering Paragraph 10 of D.17-06-015:

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Methane Abatement Cost Recovery

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  1. Methane Abatement Cost Recovery R.15-01-008 California Public Utilities Commission Belinda Gatti August 1, 2017

  2. Agenda Background Memorandum/Balancing Accounts Advice Letter filing

  3. Background Ordering Paragraph 10 of D.17-06-015: On or prior to October 31, 2017, Pacific Gas and Electric Company, Southern California Gas Company, San Diego Gas & Electric Company, and Southwest Gas Corporation shall each file a Tier 3 Advice Letter to provide the following to establish 2018 and 2019 ratemaking forecasts and caps for the Natural Gas Leak Abatement Program: Identify the costs for incremental costs associated with each individual Best Practice, Pilot Projects and Research & Development (R&D), broken down by type of expenditure including capital, operations and maintenance, and administrative. Provide the justifications consistent with the criteria to evaluate Pilot Projects and R&D in Pub. Util. Code §  740.1. The proposed allocation methodology for amortization of the account and the corresponding Commission decision authorizing the allocation methodology.

  4. Memorandum Accounts A regulatory account authorized by the CPUC and established by a utility to track certain costs (expenses and/or capital related) and/or revenues associated with a specific activity. Costs/entries may be subject to reasonableness review and/or audit prior to recovery of the costs in rates.

  5. Balancing Accounts A regulatory account authorized by the CPUC and established by a utility to ensure the recovery of certain costs (expenses and/or capital related) authorized for recovery through rates by the CPUC associated with a specific activity. Accounts may be subject to regulatory review for purposes of determining whether the costs are reasonable. Typically, utilities will file an advice letter to amortize the account (allocate into rates) and/or make adjustments to the amortization of the account due to changes in the status of the various accounts (under-collection/over-collection).

  6. Advice Letter FilingsGeneral Order 96-B, Industry Rule 5 Tier 1 advice letters are usually simple, routine advice letters, and the change being made has already been authorized by the Commission. Typically, Tier 1 advice letters go into effect pending disposition, often on the same date as filed. Tier 2 advice letters usually involve minor proposals being made on a utility’s own initiative, or more complicated matters already authorized by the Commission. Tier 2 advice letters may become effective 30 days after filing. Tier 2 advice letters may be approved without a resolution where no protests have been filed. Tier 3 advice letters are usually more complicated - approval would not be simply a “ministerial” act, and a resolution is required.

  7. Methane Abatement Forecasts/Cap Advice Letter Filing Pursuant to D.17-06-015, Ordering Paragraphs 7, 8, and 9, the utilities may establish 3 separate accounts: A balancing account for incremental Natural Gas Leak Abatement Program expenditures (NERBA) A memorandum account for incremental administrative costs associated with the Natural Gas Leak Abatement expenditures (NGLAPMA) A balancing account for Pilot Projects and R&D activities associated with the Natural Gas Leak Abatement Program (NGLAPBA) Proposed information for inclusion in the utilities’ October filing:

  8. Questions? Thank you!

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