Cost allocation proceedings for gas are referred to at the California PUC as Biennial Cost Allocation Proceedings (BCAP). BCAPs address the allocation of the costs of service across customers and the design of rates that customers pay. BCAPs also serve as proceedings to reflect in gas service rates the remaining balances in various balancing/tracking/memo accounts authorized by the Commission. Lastly, BCAPs also serve as a forum for various policy issues and other gas issues.
The number of issues in a typical BCAP could vary. These issues may include: (1) the throughput forecasts to be used to set rates, (2) the degree of balancing account protection, (3) the cost allocation approach such as marginal or embedded costs, (4) the appropriate core reservation for storage, (5) the level of risk for the unbundled noncore storage program, (6) issues relating to Hub revenues, (7) Public Purpose Programs, (8) other operating costs, (9) Self-Generation Incentive Program (SGIP), (10) allocation of non-base margin costs, (11) residential rate design issues, and (12) core commercial/industrial and noncore commercial/industrial rate issues.
Currently, PG&E’s gas distribution rates are based on the marginal cost allocation methodology while its gas transmission and storage rates are based on embedded costs per the Gas Accord. SoCalGas and SDG&E’s gas distribution, transmission, and storage rates are all based on the marginal cost allocation methodology. Any request for changes to these cost allocation methodologies would be addressed in BCAPs.
San Diego Gas & Electric Company/Southern California Gas Company