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ALJ/PVA/tcg Mailed 6/14/2004
Decision 04-06-015 June 9, 2004
BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA
Order Instituting Rulemaking to Implement the California Renewables Portfolio Standard Program.
(Filed April 22, 2004)
MARKET PRICE REFERENT METHODOLOGY
California Senate Bill (SB) 10781 established the California Renewables Portfolio Standard (RPS) Program, as generally set forth in Pub. Util. Code §§ 399.11-399.16.2 The RPS Program requires each electrical corporation to procure at least 20% of its total retail electricity sales from eligible renewable energy resources by 2017. This target date was subsequently revised by the Energy Action Plan to 2010, in order to realize the benefits of renewable power more quickly.3 Pub. Util. Code § 399.15(c) requires the Commission to adopt a Market Price Referent (MPR) methodology to estimate the long-term market price of electricity for use in evaluating bid products received during RPS power solicitations. In addition, we must adopt an associated MPR disclosure process, as required by Pub. Util. Code § 399.14(a)(2)(A), regarding how and when actual MPRs will be made public.
MPRs will establish a benchmark at or below which approved contracts will be considered per se reasonable, and above which contracts are eligible to receive Supplemental Energy Payments (SEPs), to be subsequently determined by the California Energy Commission (CEC). In today's order we (1) adopt a cash-flow simulation methodology to calculate MPRs, and (2) determine that MPRs will be publicly disclosed to all parties simultaneously, after utilities' power solicitations have closed and negotiations are complete, but before advice letters requesting contract approval are filed.1 SB 1078 from the 2001-2002 Legislative session, www.leginfo.ca.gov/cgi-bin/postquery?bill_number=sb_1078&sess=PREV&house=B&author=sher. 2 An act to add Sections 387, 390.1, and 399.25 to, and to add Article 16 (Sections 399.11 - 399.16) to Chapter 2.3 of Part 1 of Division 1 of, the Public Utilities Code, relating to renewable energy. 3 http://www.cpuc.ca.gov/static/industry/electric/energy+action+plan/index.htm.