PG&E 2011 Annual Report Download - page 75

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NOTE 3: REGULATORY ASSETS, LIABILITIES, AND BALANCING ACCOUNTS (Continued)
The public purpose programs balancing accounts are primarily used to record and recover the authorized public
purpose program revenue requirements and incentive awards earned by the Utility for implementing customer energy
efficiency programs. The public purpose programs primarily consist of the energy efficiency programs; low-income
energy efficiency programs; research, development, and demonstration programs; and renewable energy programs.
The hazardous substance balancing accounts are used to track recoverable hazardous substance remediation
costs through the CPUC-approved ratemaking mechanism that authorizes the Utility to recover 90% of such costs
for certain sites. The current balance represents eligible remediation costs incurred by the Utility during 2010 that
are expected to be recovered during 2012. (See Note 15 below.)
The gas fixed cost balancing account is used to record and recover CPUC-authorized gas distribution revenue
requirements and certain other gas distribution-related costs. Similar to the utility generation and the distribution
revenue adjustment mechanism balancing accounts discussed above, the Utility’s recovery of these revenue
requirements is decoupled from the volume of sales. During the colder months of winter there is generally an
over-collection in this balancing account primarily due to higher natural gas sales. During the warmer months of
summer there is generally an under-collection primarily due to lower natural gas sales.
The Utility is generally authorized to recover 100% of its prudently incurred electric fuel and energy
procurement costs. The Utility tracks energy procurement costs in balancing accounts and files annual forecasts of
energy procurement costs that it expects to incur during the following year. The Utility’s electric rates are set to
recover such expected costs.
The balancing account for ERBs records the benefits and costs associated with bonds that are provided to, or
received from, customers. This account ensures that customers receive the benefits of the net amount of energy
supplier refunds, claim offsets, and other credits received by the Utility.
At December 31, 2011 and 2010, ‘‘other’’ primarily consisted of balancing accounts that track recovery of the
authorized revenue requirements and costs related to the SmartMeterTM advanced metering project. In addition, at
December 31, 2011, ‘‘other’’ included balancing accounts that were authorized by the 2011 GRC to track the
recovery of meter reading costs.
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