Peevey Attachment A
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COM/MP1/oma Date of Issuance 12/17/2010

Decision 10-12-055 December 16, 2010

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Order Instituting Rulemaking on the Commission's Own Motion into combined heat and power Pursuant to Assembly
Bill 1613.

Rulemaking 08-06-024

(Filed June 26, 2008)

DECISION GRANTING, IN PART, AND DENYING IN PART, JOINT PETITION OF PACIFIC GAS AND ELECTRIC COMPANY, SOUTHERN CALIFORNIA EDISON COMPANY, AND SAN DIEGO GAS & ELECTRIC COMPANY FOR MODIFICATION OF DECISION 09-12-042

1. Summary

This decision grants in part, and denies in part, a joint request by Pacific Gas and Electric Company, San Diego Gas & Electric Company, and Southern California Edison Company to modify Decision (D.) 09-12-042, which implemented Assembly Bill (AB) 1613 (Ch. 713, Stats. 2007). Among other things, this decision revises the methodology for setting the price to be offered by the electrical corporations to utilize pricing inputs from the most recent Market Price Referent. It corrects language in the adopted form contracts to clarify that the "Fixed Price Component" of the price is to be a constant value during the entire contract term and makes other modifications to the form contracts to clean up contractual language. The request to allow either party to procure the greenhouse gas allowance on behalf of the Seller is also approved with modifications. The request to reduce the price to be offered to reflect an
as-available price is denied. Furthermore, this Decision modifies D.09-12-042 in order to be consistent with two subsequently issued orders by the Federal Energy Regulatory Commission (FERC). The FERC orders clarified that under the Public Utility Regulatory Policies Act of 1978, 16 U.S.C. § 824a-3, the Commission could require California utilities to offer contracts at
Commission-determined wholesale rates to eligible combined heat and power (CHP) systems which participate in the AB 1613 (Ch. 713, Stats. 2007) program, provided that the rates did not exceed the purchasing utilities' avoided costs and that the CHP systems had obtained Qualifying Facility status under the FERC's regulations.1

1 See, California Public Utilities Commission, et al. (2010) 132 FERC 61,047 at 65, clarification granted and rehearing dismissed, 133 FERC 61,059 at 26-31. The Federal Energy Regulatory Commission (FERC) recognized that its ruling did not apply to public agency sellers that are exempt from FERC jurisdiction under Section 201(f) of the Federal Power Act, 16 U.S.C. § 824(f). See, California Public Utilities Commission, et al., 132 FERC 61,047 at 71.

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