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ALJ/BWM/LTC/jva Mailed 7/14/2004
Decision 04-07-028 July 8, 2004
BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA
Order Instituting Rulemaking to Promote Policy and Program Coordination and Integration in Electric Utility Resource Planning.
(Filed April 1, 2004)
INTERIM OPINION REGARDING
ELECTRICITY RELIABILITY ISSUES
Table of Contents
INTERIM OPINION REGARDING ELECTRICITY RELIABILITY ISSUES 2
1. Summary 2
2. Background 2
3. Discussion 5
3.1. CAISO and Utility Roles in Assuring Reliability 7
3.1.1. Incremental Improvement 8
3.1.2. Reliance on RMR Contracts 13
3.1.3. Modify Restriction on Use of Bilateral Negotiated Contracts 16
3.1.4. Spot Market Transactions Limitation Relaxed 18
3.2. Application to Southern California and Statewide 20
3.3. Monitoring Plan 22
3.4. Cost Recovery 23
4. California Environmental Quality Act 25
5. Need for Expedited Consideration 25
6. Comments on Draft Decision 26
7. Assignment of Proceeding 27
Findings of Fact 27
Conclusions of Law 29
INTERIM ORDER 31
ATTACHMENT A - Summary of Comments
ATTACHMENT B - Table of Acronyms
The California Independent System Operator (ISO or CAISO) recently brought important concerns to our attention. In particular, these concerns relate to the CAISO's increasing need to manage congestion and address reliability issues in Southern California, particularly in the area South of Path 15 (SP 15). This has resulted in operational difficulties for the CAISO, along with immediate and important reliability concerns for this summer.
In response, we clarify and modify prior orders because reliability is not only the CAISO's job. We make clear that it is also a utility responsibility to procure all the resources necessary to meet its load, not only service area wide but also locally. In doing so, a utility must take into account not only cost but also transmission congestion and reliability.
These clarifications and modifications specifically apply to the facts presented in Southern California, but the principles also apply statewide. We direct Energy Division to seek information from CAISO and utilities to monitor their responses to this order, and bring any concerns to our attention. This proceeding remains open.