ALJ/AES/sid Mailed 5/4/2007

Decision 07-05-028 May 3, 2007

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)

(See Appendix B for a list of appearances.)

INTERIM OPINION ON IMPLEMENTATION OF

PUBLIC UTILITIES CODE SECTION 399.14(b)

Title Page

INTERIM OPINION ON IMPLEMENTATION OF PUBLIC UTILITIES CODE SECTION 399.14(b) 11

1. Summary 11

2. Procedural Background 11

3. Discussion 44

3.1. Background on RPS Procurement Contracts 44

3.2. SB 107 66

3.3. What is being Measured by the Minimum Quantity? 88

3.4. What is the Metric for the Minimum Quantity? 99

4. What Should the Minimum Quantity be? 1212

4.1. Can the Minimum Quantity be Zero? 1212

4.2. What Level Other than Zero Should the Minimum
Quantity be? 1414

5. Duration 2121

6. Enforcement 2121

7. Should There be a "Small LSEs" Exception? 2222

8. Summary of § 399.14(b)(2) Compliance Process 2323

9. Comments on Proposed Decision 2424

10. Assignment of Proceeding 2929

Findings of Fact 2929

Conclusions of Law 3131

INTERIM ORDER 3333

APPENDIX A - Example of § 399.14(b) Compliance

APPENDIX B - List of Appearances

INTERIM OPINION ON IMPLEMENTATION OF
PUBLIC UTILITIES CODE SECTION 399.14(b)

1. Summary

In this decision, we implement the requirements of new Pub. Util. Code § 399.14(b), regarding the use of contracts of less than 10 years' duration for the procurement of electricity from eligible renewable resources under the renewables portfolio standard (RPS) program. We determine that, beginning in 2007, RPS-obligated load-serving entities (LSEs) may use energy deliveries from contracts of less than 10 years' duration with eligible renewable energy resources that commenced commercial operation prior to January 1, 2005 for RPS compliance, on one condition. That condition is that each year they also sign contracts of at least 10 years' duration and/or contracts with RPS-eligible generation facilities that commenced commercial operation on or after January 1, 2005, for energy deliveries equivalent to at least 0.25% of their prior year's retail sales.