ALJ/CMW/tcg Mailed 12/19/2002
Decision 02-12-074 December 19, 2002
BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA
Order Instituting Rulemaking to Establish Policies and Cost Recovery Mechanisms for Generation Procurement and Renewable Resource Development. |
Rulemaking 01-10-024 (Filed October 25, 2001)) |
INTERIM OPINION ............................................................................. 1
I. Summary 2
II. Procedural Background 2
III. Ensuring the Utilities Resume Full Procurement on January 1, 2003 3
IV. Approval of Updated Plans 4
V. Elements of the Procurement Plans 7
A. Effective Duration of the Short-Term Plans 7
B. Forecasts of Loads and Resources 9
C. Volume Limits on Procurement 12
D. Risk Management 14
1. Consumer Risk Tolerance Level 14
2. Using Value at Risk, Cash-Flow-at-Risk Models
and Other Tools to Measure Portfolio Risk 16
3. Use of the Black Model and Other Standardized Models 17
4. Trigger for Plan Updates 17
E. Renewable Procurement Issues 17
1. General Comments 17
2. Short-Term Plans and Advice Letter Filings 20
a) SDG&E 21
b) PG&E 24
c) Edison 26
d) CBEA 27
3. CPUC-CEC Collaborative Workplan 28
F. Qualifying Facilities Contracts 29
G. Demand Response Programs 30
H. Reserve Levels 31
TABLE OF CONTENTS
(Continued)
Title Page
I. Cost Recovery and Related Issues 32
1. The Trigger Mechanism and the ERRA Balancing Account 33
2. Starting Point for ERRA Costs and Revenues 36
3. Issues With Proposed Tariff Language 37
4. Cost Recovery of Certain Costs 38
a) Electric Energy Transaction Administration Costs 38
b) Above-Market Costs Related to Qualifying Facilities
and Purchase Power Agreements 39
5. Discussion 40
a) The Trigger Mechanism and the ERRA Balancing Account 40
b) Starting Point for ERRA Costs and Revenues 45
c) Issues With Proposed Tariff Language 45
d) Cost Recovery of Certain Costs 46
VI. Procedural Process 47
VII. PG&E's Petition to Modify D.02-10-062 49
A. Discussion 53
VIII. Waiver of Comments by the Commission on Draft Decision 60
IX. Assignment of Proceeding 62
Findings of Fact ....................................................................................62
Conclusions of Law ..............................................................................68
INTERIM ORDER .................................................................................72
APPENDICES A THRU C FILED UNDER SEPARATE SEAL
Confidential Appendix A - Pacific Gas and Electric Company Modified Short-Term Procurement Plan for 2003
Confidential Appendix B - Southern California Edison Modified Short-Term Procurement Plan for 2003
Confidential Appendix C - San Diego Gas & Electric Company Modified Short-Term Procurement Plan for 2003
I. Summary
In this decision, we approve the short-term procurement plans, as modified by the confidential appendices developed here, for Pacific Gas and Electric Company (PG&E), Southern California Edison Company (Edison), and San Diego Gas & Electric Company (SDG&E). We also modify and clarify the cost recovery mechanisms and standards of behavior we adopted in Decision (D.) 02-10-062 and provide further guidance on the long-term planning process we will undertake in the next phase of this proceeding.
