Special Facilities

Introduction

Some Pacific Gas and Electric Company's customers and power producers (applicants) request equipment that we do not provide under standard tariff provisions for services. For example, an applicant may request that certain Company service equipment be placed underground rather than above ground. Other applicants may request special electric protection equipment for generation facilities. If you are considering a project that may require special facilities, you will be interested in the following information.

What are Special Facilities?

That's our term for facilities that are in addition to, or in place of, the standard facilities that we would normally provide for delivery of service under existing tariff schedules, or a portion of existing facilities allocated solely for an applicant's use. (ref: PG&E's Gas and Electric Rule 2)

Examples may include: If PG&E agrees, the underground installation of electric equipment, such as a sub-surface transformer in place of a pad-mounted transformer. Electric protection equipment for cogeneration and small power production, such as "ground fault detection equipment." Voltage regulating equipment to mitigate interference with PG&E's system operation.

How Much Do Special Facilities Cost?

Special facilities usually cost more for Pacific Gas and Electric Company to install, own, operate and maintain than standard facilities. The California Public Utilities Commission has ruled that applicants requesting these facilities pay all the additional costs so that customers don't bear the ongoing cost burden.

The Advance Payment
This payment is the incremental cost difference between Pacific Gas and Electric Company's estimated installed cost of any special facilities and the estimated installed cost of the standard facilities that we would normally provide for delivery of gas or electric service.

The Income Tax Component of Contribution (ITCC)
The Income Tax Component of Contribution (ITCC) is a result of the 1986 Federal Tax Reform Act. It requires the payment of tax on the advance payment collected for special facilities. This tax is collected in accordance with the 1986 Federal Tax Reform Act and the guidelines established by the California Public Utilities Commission.

The Cost-of-Ownership Charge
This charge represents Pacific Gas and Electric Company's additional ongoing costs to own, operate and maintain the special facilities. It includes the same types of costs the Company incurs with its standard facilities, such as depreciation, maintenance, property taxes and cost of capital.

The cost-of-ownership charge is typically a one-time charge that establishes a fund to cover the costs of owning, operating and maintaining the special facility. Under certain circumstances, the Company may allow a monthly cost-of-ownership payment.

Ownership, Operation and Maintenance

Pacific Gas and Electric Company owns, operates and maintains the special facilities, and is reimbursed for that expense by the applicants paying the additional costs.

We'll Provide You with an Estimate

Pacific Gas and Electric Company will calculate the difference between the special facilities and the standard facilities (provided that we've first agreed to install the special facilities). This difference will determine the advance payment.

Some Examples

Let's look at some examples of cost calculations for special facilities. They are illustrations only and do not necessarily represent actual costs. The cost-of-ownership charges and Income Tax Component of Contribution (ITCC) taxes are based on rates effective at the time of this publication and are subject to change by the California Public Utilities Commission. The examples shown are based on electric facilities, which are more typical. Gas facilities my also be special facilities under certain circumstances.

Example 1:

For space or aesthetic reasons, an applicant constructing a commercial office building requests a sub-surface transformer rather than a standard pad-mounted unit. Pacific Gas and Electric Company agrees to this special facilities arrangement and determines the following charge:

Installed cost of sub-surface transformer $50,000
Installed cost of pad-mounted transformer -$40,000
Incremental difference or advance payment $10,000
ITCC +$3,400
One-time cost-of-ownership charge $10,278**

Total special facilities payment by the applicant $23,678

Example 2:

A manufacturing business is increasing its electric load and requests a second electric service at the same voltage as the existing service. The applicant does not qualify for two services but requests that Pacific Gas and Electric Company retain its existing service in place (providing local codes permit this arrangement). Our existing facilities are adequate to serve the increase in load, therefore the second service is classified as a special facility. The Utility agrees to the facility and determines the following charge:

Installed cost of the second service (advance) $7,000
ITCC $2,380
One-time cost-of-ownership charge +$7,195**
Total special facilities payment by the applicant $16,575

** Applied to the advance payment, not including the ITCC payment.