In a light preholiday agenda, the California Public Utilities Commission made it easier for San Diego Gas & Electric to finance in the short term for new infrastructure projects. At the May 26 meeting, regulators also debated intervenor compensation rules and granted agricultural rates for nut hulling and shelling. The CPUC authorized SDG&E to issue $400 million in short-term debt through 2010 and lifted an existing condition requiring SDG&E to reduce its outstanding short-term debt to 5 percent of its long-term capital every 12 months. SDG&E may borrow to temporarily pay for new utility infrastructure, balance its undercollections and fuel inventories, and retire and refund long-term debt and preferred stock. SDG&E asked the CPUC to remove the 5 percent restriction, arguing that it could prohibit the utility from obtaining adequate financing to fund new infrastructure projects. Lifting the 5 percent restriction would put SDG&E on an equal footing for short-term borrowing with Pacific Gas & Electric and Southern California Edison, CPUC president Mike Peevey maintained. Newly appointed commissioner John Bohn, a former banking executive, said lifting the restriction would provide utility managers with the flexibility they need to manage SDG&E?s finances. The CPUC prohibited SDG&E from using its short-term financing authority to pay dividends, finance intercorporate borrowing, or pay management fees to its parent company Sempra Energy or other affiliates. In other action, the commissioners debated at what point in a proceeding intervenors that have made a substantial contribution and meet all other legal requirements should receive compensation for their input. The commissioners disagreed over how much remuneration The Utility Reform Network should receive for its role as an intervenor in the commission?s rulemaking proceeding last year to ensure that the state has access to reliable long-term supplies of natural gas. By a 3-2 vote, the CPUC granted TURN $35,200 in intervenor compensation. Commissioner Susan Kennedy argued that the CPUC should limit TURN?s compensation to $31,000 because intervenors should be compensated only for their input after a CPUC proceeding has been opened and not for any preparatory work. ?The issue is when does the clock start ticking on when an intervenor should be awarded compensation,? Kennedy said. ?This is not about one case. This commission has to be able to decide compensation for all intervenors,? she said. Commissioner Dian Grueneich argued that the commission should evaluate its intervenor compensation rules in a formal rulemaking procedure rather than setting policies piecemeal in individual cases such as TURN?s. She noted that the CPUC staff is compiling information for a rulemaking on intervenor compensation and warned the commission against sending a signal that could interfere with the staff?s efforts. The CPUC?s standard for intervenor compensation should be whether an intervenor has made a substantial contribution to a proceeding, Grueneich said, adding that the TURN case merits full compensation. Turning to ratesetting, the commission ruled that almond hulling and shelling operations qualify for PG&E?s discounted electric rates for agricultural customers because they are fundamentally a part of agricultural production. Central Valley almond growers and processors had petitioned the CPUC for the discount rates. Peevey?s alternate decision, which the commission adopted by a 4-1 vote with commissioner Geoffrey Brown dissenting, granted the petitioners the agricultural tariff and ordered PG&E to refund to those customers the difference between the rates they paid and the utility?s agricultural tariff. The commission also approved a process for electric utilities to pass through rate changes for electric transmission costs that have been approved by the Federal Energy Regulatory Commission but have not yet been approved by the CPUC. The process will expedite CPUC approval through advice letters rather than public hearings before the commission, thus narrowing the time lag between federal and state approvals of utility transmission rates. Grueneich supported the new policy because it delegates processing routine matters to the CPUC?s energy staff, freeing the commissioners to focus on important issues. She stressed, however, that the commission should continue to provide public access to advice letters as well as formal decisions through its Web site.