ALJ/AES/jt2 Date of Issuance 5/30/2008

Decision 08-05-029 May 29, 2008

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Order Instituting Rulemaking to Develop Additional Methods to Implement the California Renewables Portfolio Standard Program.

Rulemaking 06-02-012
(Filed February 16, 2006)

DECISION ON PARTICIPATION OF SMALL AND MULTI-JURISDICTIONAL UTILITIES IN THE RENEWABLES PORTFOLIO STANDARD PROGRAM

Table of Contents

Title Page

DECISION ON PARTICIPATION OF SMALL AND
MULTI-JURISDICTIONAL UTILITIES IN THE
RENEWABLES PORTFOLIO STANDARD PROGRAM 2 2

1. Summary 2 2

2. Procedural Background 3 3

3. Discussion 5 5

3.1. The SMJUs 5 5

3.1.1. Small Utilities 5 5

3.1.2. Multi-Jurisdictional Utilities 6 6

3.2. Procurement Obligations 6 6

3.2.1. Procurement Elements 8 8

3.2.1.1. Initial Baseline Procurement Amount 8 8

3.2.1.2. Annual Procurement Targets 9 9

3.2.2. Timing of Annual Procurement Obligations 10 10

3.2.3. Creditworthiness 12 12

3.2.3.1. Not Creditworthy 13 13

3.2.3.2. Not Able to Procure on Reasonable Terms 13 13

3.2.3.2.1. Mountain Utilities 13 13

3.2.3.2.2. Sierra 14 14

3.2.3.3. Deferral of RPS Procurement Performance 15 15

3.3. Procurement Plans 17 17

3.3.1. Small Utilities 17 17

3.3.2. Multi-Jurisdictional Utilities 17 17

3.4. IRPs 18 18

3.4.1. IRP Procedural Issues 19 19

3.4.2. IRP Evaluation 21 21

3.4.2.1. PacifiCorp 21 21

3.4.2.1.1. Consistency With RPS Procurement Plan Requirements 22 22

3.4.2.1.2. Plan for Using Flexible Compliance 22 22

3.4.2.1.3. Bid Solicitation Materials 23 23

3.4.2.2. Sierra 23 23

3.4.2.2.1. Consistency With RPS Procurement Plan Requirements 24 24

3.4.2.2.2. Plan for Using Flexible Compliance 25 25

3.4.2.2.3. Bid Solicitation Materials 25 25

3.4.2.3. Additional Information Required for Supplements 26 26

3.4.2.3.1. Information Supplements in Years IRP is Filed 26 26

3.4.2.3.2. Information for Supplements for Later Years 27 27

3.4.2.4. Supplements for 2008 and 2009 28 28

3.4.2.5. Varying the Requirements for Supplements 28 28

3.5. Other RPS Procurement Issues 28 28

3.5.1. BVES 28 28

3.5.2. MU 30 30

3.5.3. Sierra 31 31

3.6. Reporting, Compliance and Enforcement 32 32

3.6.1. Reporting 32 32

3.6.2. Compliance 33 33

3.6.2.1. Use of Short-Term Contracts 33 33

3.6.2.2. Verification of RPS Reporting 35 35

3.6.3. Enforcement 35 35

3.6.3.1. General Principles 35 35

3.6.3.2. Excuses for Shortfalls 36 36

3.6.3.3. Maximum Penalty Amount 36 36

4. Respondents 37 37

5. Comments on Proposed Decision 38 38

6. Assignment of Proceeding 42 42

Findings of Fact 42 42

Conclusions of Law 46 46

ORDER 49 49

Appendix A - Schedule for IRPs and Supplements

DECISION ON PARTICIPATION OF SMALL AND MULTI-JURISDICTIONAL UTILITIES IN THE RENEWABLES PORTFOLIO STANDARD PROGRAM

1. Summary

In this decision, we complete the specification of the obligations of small utilities and multi-jurisdictional utilities under the renewables portfolio standard (RPS) program. We clarify how the technical rules, processes, and procedures already in place for the RPS program apply to these utilities. We find that the RPS annual procurement requirements, reporting requirements, and flexible compliance rules apply to the small and multi-jurisdictional utilities in the same way as to other load-serving entities in the RPS program. We apply the special rules for multi-jurisdictional utilities set by the Legislature to calculating their RPS procurement targets and reviewing their planning procedures, acknowledging the special situation of the multi-jurisdictional utilities while supporting the uniform administration of the RPS program. Recognizing the complexities of participation in the RPS program for the small and multi-jurisdictional utilities, we also allow them to extend the period of time during which they may defer their annual procurement obligations.

With this decision, the rules of the RPS program now include all of the investor-owned utilities serving California customers. This will allow all of these utilities to participate in meeting the RPS goal of providing 20% of their retail sales of electricity from eligible renewable resources by 2010.