R0802007 Appendices A-C
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ALJ/CAB/jt2 Date of Issuance 2/20/2008

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Order Instituting Rulemaking to Integrate and Refine Procurement Policies Underlying Long-Term Procurement Plans.

FILED

PUBLIC UTILITIES COMMISSION

FEBRUARY 14, 2008

SAN FRANCISCO, CALIFORNIA

RULEMAKING 08-02-007

ORDER INSTITUTING RULEMAKING

1. Summary

We open this rulemaking to continue our efforts to ensure a reliable and cost-effective electricity supply in California through integration and refinement of a comprehensive set of procurement policies, practices and procedures underlying long-term procurement plans (LTPPs). This LTPP proceeding is the successor to Rulemaking (R.) 06-02-013,1 R.04-04-003,2 and R.01-10-024,3 and it will be the forum in which we consider, in an integrated fashion, the Commission's electric resource procurement policies and programs.

In this Order Instituting Rulemaking (OIR), we intend to consider standardized resource planning practices, assumptions and analytic techniques applied to LTPPs; interim standards and practices to evaluate the uncertain costs of future greenhouse gas (GHG) regulations; a methodology to quantify energy efficiency (EE) in the California Energy Commission's (CEC) forecast; methodologies to estimate firm capacity from demand-side resources; system versus bundled resource need; refinements to the bid evaluation process; and other LTPP implementation issues as identified, including the impact of the implementation of the market redesign and technology update (MRTU) on procurement. All resource planning is to be done in the context of the Energy Action Plan II (EAP II).4

1 Order Instituting Rulemaking to Integrate Procurement Policies and Consider Long-Term Procurement Plans, dated February 16, 2006.

2 Order Instituting Rulemaking to Promote Policy and Program Coordination and Integration in Electric Utility Resource Planning, dated April 1, 2004.

3 Order Instituting Rulemaking to Establish Policies and Cost Recovery Mechanisms for Generation Procurement and Renewable Resource Development, dated October 29, 2001.

4 EAP I was issued jointly on May 8, 2003, by the Commission, the CEC and the California Consumer Power and Conservation Financing Authority. EAP I was updated with the adoption of EAP II, as a joint policy plan of the CPUC and the CEC, in October 2005. See www.energy.ca.gov/energy_action_plan/2005-09-21_EAP2_FINAL.PDF.

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