TURN raises the concern that imposing Sharing Mechanism II for subsequent transactions by NewCo Sub may chill investments by NewCo Sub who could be at a competitive disadvantage compared to third parties, who are not subject to an additional sharing mechanism. (TURN’s Comments to Assigned Commissioner Ruling at 4.) However, when SDG&E submits an application pursuant to Public Utility Code Section 851 for an IP transfer between SDG&E and a non-affiliate third party, the Commission intends to review such transfers, and any corresponding benefits to ratepayers, in a similar manner as it would for a transfer between NewCo Sub and SDG&E. 3.5. Standardized Information for Section 851 Filings Pursuant to Public Utility Code Section 851, SDG&E must submit all IP transactions between the utility and its future affiliate, NewCo Sub, to the Commission for approval. In an effort to simplify the Commission’s review of these prospective filings, SDG&E proposes to standardize the Section 851 filings, as follows: (1) retain an Independent Evaluator to review the evaluation, selection, and negotiation process for IP transactions involving NewCo Sub, (2) document whether SDG&E’s activities and decisions were fair, reasonable and performed with no preferential treatment, and (3) commit to the standardized sharing mechanism of 75 percent for ratepayers and 25 percent for shareholders. SDG&E further proposes that SDG&E ratepayers pay for the cost of the Independent Evaluator. All intervenors oppose the proposal that the Independent Evaluator be paid for by ratepayers, rather than SDG&E shareholders. Since SDG&E’s shareholders’ desire to establish NewCo Sub created the need for an Independent Evaluator in the first instance, the intervenors state that shareholders should be directed to pay the costs before revenue from any IP
TURN raises the concern that imposing Sharing Mechanism II for subsequent transactions by NewCo Sub may chill investments by NewCo Sub who could be at a competitive disadvantage compared to third parties, who are not subject to an additional sharing mechanism. (TURN’s Comments to Assigned Commissioner Ruling at 4.) However, when SDG&E submits an application pursuant to Public Utility Code Section 851 for an IP transfer between SDG&E and a non-affiliate third party, the Commission intends to review such transfers, and any corresponding benefits to ratepayers, in a similar manner as it would for a transfer between NewCo Sub and SDG&E. 3.5. Standardized Information for Section 851 Filings Pursuant to Public Utility Code Section 851, SDG&E must submit all IP transactions between the utility and its future affiliate, NewCo Sub, to the Commission for approval. In an effort to simplify the Commission’s review of these prospective filings, SDG&E proposes to standardize the Section 851 filings, as follows: (1) retain an Independent Evaluator to review the evaluation, selection, and negotiation process for IP transactions involving NewCo Sub, (2) document whether SDG&E’s activities and decisions were fair, reasonable and performed with no preferential treatment, and (3) commit to the standardized sharing mechanism of 75 percent for ratepayers and 25 percent for shareholders. SDG&E further proposes that SDG&E ratepayers pay for the cost of the Independent Evaluator. All intervenors oppose the proposal that the Independent Evaluator be paid for by ratepayers, rather than SDG&E shareholders. Since SDG&E’s shareholders’ desire to establish NewCo Sub created the need for an Independent Evaluator in the first instance, the intervenors state that shareholders should be directed to pay the costs before revenue from any IP