The ratemaking provision underlying Pacific Gas & Electric?s bankruptcy plan should allow the utility to fund the Environmental Enhancement Corp. with distribution rates, not public-goods surcharges, PG&E argued this week. The nonprofit corporation is set to oversee the use of 140,000 acres of watershed lands and other lands associated with PG&E systems. A week ago, The Utility Reform Network took issue with PG&E?s interpretation of this account?s funding mechanism and whether another utility account should be knocked out (<i>Energy Circuit<\/i>, January 23, 2004). In a January 27 letter to the California Public Utilities Commission, the utility argues that funding for the environmental enhancement should come out of the ratepayer distribution pot of money because it was part of the bankruptcy settlement deal approved by the CPUC December 18 on a 3-2 vote. ?Therefore, PG&E believes these costs are more appropriately included in distribution rates rather than [ratepayer-funded public-goods programs], which have historically been limited to energy efficiency programs, renewables, research and low-income programs and rates,? according to PG&E. PG&E also argues that the Utility Retained Generation Income Tax Memorandum Account should be eliminated. It disputes TURN?s contention that that tax account should remain intact because it is ?associated with the transition period generation ratemaking? slated for elimination under the approved settlement. The tiff is not a big deal, and PG&E and TURN may resolve their differences, said Mike Florio, TURN senior attorney. ?It really is all about how $11 million per year in costs gets allocated among customer groups,? he said.