9. Assignment of Proceeding

Michael R. Peevey is the assigned Commissioner, and Anne E. Simon and Burton W. Mattson are the assigned ALJs for this proceeding.

1. No motion for evidentiary hearing was filed.

2. A special Imperial Valley bidders conference will highlight the unique opportunities created by Sunrise, and is expected to increase both the number and viability of proposed projects.

3. Allowing each IOU to schedule the special Imperial Valley bidding conference at a time and place that it believes is most efficient will reasonably address certain concerns (e.g., developers not having business development staff in Imperial Valley).

4. Specific subjects must be included in the special bidders conference to highlight the special importance and unique expectations relative to Imperial Valley renewable resources and Sunrise.

5. Specific monitoring of Imperial Valley proposals and projects is consistent with Sunrise being a relatively important and costly project in California, and deserving reasonable attention to ensure that it is used efficiently, equitably, and wisely.

6. Monitoring of Imperial Valley proposals and projects will not cause unreasonable preference to be given in the LCBF selection process to Imperial Valley projects, and will not create undue pressure to select or approve bids otherwise contrary to LCBF evaluation.

7. It is premature to adopt remedial measures now for the 2010 RPS solicitation relative to Imperial Valley projects.

8. Current project viability assessment tools can be improved by adopting a requirement for a more transparent and uniform approach, with this improved approach also promoting an increase in the public's confidence that projects with demonstrated indicia of viability are given appropriate weight.

9. Certain solicitation-wide project viability data included in the public version of advice letters seeking Commission approval of an RPS contract will promote an increase in the transparency of an IOU's assessment of project viability.

10. Development security serves several purposes, and balances many competing interests, including its relationship to project viability, replacement cost and financial incentives to honor an agreement.

11. The project viability calculator needs further development and testing before adopting it as the tool to determine whether an RPS contract or amendment is eligible to be considered by the Commission.

12. Project viability score is not necessarily an exact predictor of an outcome, and linking project viability score with flexible compliance will increase the complexity of flexible compliance administration.

13. Utilities have substantial incentive to select viable projects given that flexible compliance applies only within a three year window; utilities must include a margin of safety in procurement plans as a buffer against contingencies; meeting RPS targets is measured by actual energy deliveries; utilities are expected to give reasonable consideration to building and owning RPS plant, if necessary, to meet RPS goals; and failure to meet targets exposes the utility to a penalty up to $25 million.

14. In 2004, the Commission determined that exclusivity for ongoing negotiations is a reasonable requirement, but did not establish a uniform date to trigger exclusivity.

15. A uniform exclusivity date averts premature shortlisting that might otherwise lead to undesirable bidding wars, which could allow bidders to extract concessions from an IOU in order to continue negotiations at an unnecessary cost increase to ratepayers.

16. It is premature to authorize use of TRECs for RPS compliance (even subject to conditions) until the Commission actually authorizes use of TRECs.

17. STC 5 (Contract Term) permits a bidder to propose a contract for any specifically stated number of years.

18. SCE's RFP does not permit proposals longer than 20 years, while SDG&E's RFO and PG&E's Protocol are not entirely clear that proposals over 20 years may be made.

19. Some project developers are interested in making proposals for contracts that are longer than 20 years, and the Commission has recently adopted MPRs in excess of 20 years.

20. No party convincingly argues against Commission acceptance of IOU-proposed changes to the IOU's LCBF methodology.

21. There is no evidence to order different TOU factors at this time.

22. The information in each IOU's Plan regarding its current consideration of whether or not to build its own renewable resources to reach 20% by 2010 is (as it was in previous plans) relatively short and generally inconclusive.

23. IOU Plans continue to be relative complex documents (including many attachments, different model contracts and multiple related forms), and continuing with incremental improvements toward standardization and more uniformity in form and format will advance the goals of increased simplicity, transparency, efficiency and competition.

24. In response to bidder feedback, PG&E proposes changes in its development security amounts and policy.

25. SCE does not necessarily seek approval of its RPS Standard Contract Program (for projects up to 20 MW), or the related standard contracts as part of its 2009 Plan.

26. PacifiCorp's comprehensive Supplement does not clearly show how it will achieve 20% by 2010.

1. With some exceptions, electric utilities are required to prepare a renewable energy procurement plan, and the Commission is required to review and accept, modify, or reject each plan.

2. Electric utilities should continue to have reasonable flexibility in the way each satisfies RPS program requirements, subject to Commission guidance, limited specific requirements, and certain specific dates (where applicable) for the 2009 solicitation cycle.

3. Conditional approval of each 2009 RPS Plan (including Protocol, RFO, RFP, model contracts, other forms), and each 2009 comprehensive Supplement to the IRP, does not constitute endorsement or adoption of each element of each Plan or Supplement; rather, each utility remains responsible for overall program success, subject to rules for flexible compliance and tests of reasonableness (e.g., how each entity administers the program, including the extent to which each entity takes Commission guidance; demonstrates creativity and vigor in program execution; and successfully reaches program goals, targets and requirements).

4. The proposed 2009 RPS Procurement Plans of PG&E, SCE and SDG&E should each be conditionally accepted, subject to the guidance, necessary modifications, changes and clarifications stated in this order, including, but not necessarily limited to, each item summarized in Appendix A; and the 2009 comprehensive Supplements to IRPs of PacifiCorp and Sierra should each be accepted subject to the guidance stated in this order including, but not limited to, the relevant items summarized in Appendix A.

5. PG&E, SCE and SDG&E should each, within 14 days of the date this order is mailed, file an amended Plan with the Commission's Docket Office, serve it on the service list, and also file a copy with the Energy Division Director. Unless suspended by the Executive Director or Energy Division Director within 21 days of the date this order is mailed, each utility should use its amended Plan for its 2009 RPS solicitation.

6. PG&E, SCE and SDG&E should each hold a special Imperial Valley bidders conference (at a time and place it determines most efficient for the IOU and stakeholders), the conference should include presentation of certain information by the host (e.g., Commission approval and intentions; project information; estimates of renewable deliveries; SDG&E commitments), and 2010 RPS Procurement Plans should report on the 2009 special bidders conference.

7. Imperial Valley projects and proposals should be monitored, and the IOUs (PG&E, SCE, SDG&E) should provide specific information to Energy Division (when requested by Energy Division).

8. Remedial measure for the 2010 solicitation relative to Imperial Valley projects should not be adopted now, but parties should continue to consider remedial measures and make recommendations, as appropriate.

9. Each IOU should include an improved project viability methodology and calculator with its amended Plan, as specified by Energy Division.

10. The project viability calculator should be used as a screening tool, not to determine the exact merit of a project or contract.

11. Solicitation-wide project viability calculator information and results should be included with each advice letter seeking approval of an RPS contract in order to increase the transparency of project assessments, but project-specific project viability calculator information and results should not be made public to the extent it falls within guidelines adopted in our confidentiality orders (e.g., D.06-06-066).

12. Development security amounts and protocols should not be strictly linked to project viability calculator at this time.

13. The Commission should not at this time adopt a categorization of projects by project viability calculator score that limits the Commission's discretion to consider a range of projects, contracts and contract amendments.

14. Flexible compliance rules should not be linked to scores from the project viability calculator at this time.

15. Flexible compliance provisions do not excuse a utility from fulfilling its RPS Program targets with actual deliveries of energy by the end of the flexible compliance period.

16. Seller non-performance should not at this time be eliminated as a factor in the rules for flexible compliance.

17. A uniform date should be adopted before which an IOU may not require that a bidder execute an agreement requiring exclusive negotiations with the IOU.

18. Plans should not include use of TRECs to meet RPS Program targets (even subject to conditions) until the Commission has actually authorized the use of TRECs and clarified the conditions upon which TRECs may or may not be used.

19. STC 5 is modifiable and does not need further modification to permit a bidder to propose a contract with a term longer than 20 years, but each IOU Plan should exclude language which would otherwise foreclose or discourage proposals in excess of 20 years.

20. Each IOU's amended Plan should include discussion of upfront funding of transmission upgrades to the extent this funding is intended to be a component of its 2009 Plan to reach RPS goals.

21. IOU proposals to modify LCBF methods should be accepted.

22. SDG&E should include both energy-only and all-in TOU factors in its next TOU showing.

23. No provision should be adopted here to retroactively apply TOU factors later decided in the LTPP proceeding back to the 2009 Plans.

24. IOUs should undertake all reasonable actions to comply with RPS targets, including UOG when necessary and appropriate, and amended Plans should include additional description of UOG as needed to ensure IOUs meet RPS Program targets.

25. IOUs should continue to make incremental improvement toward adopting a common and streamlined form and format for RPS Plans, including the overall summary document and multiple attachments (e.g., Protocol, RFP, RFO, model contracts, multiple related forms).

26. IOU proposed changes (e.g., development security, streamlining and simplifying model contracts, reduced development security option, subordinated security interest, revised insurance provisions, one team for evaluations) should be accepted to the extent described herein, consistent with the IOU ultimately being responsible for its portion of RPS Program success, with limited exceptions noted herein.

27. SCE's RPS Standard Contract Program (1.5 MW to 20 MW per project, for a total of 250 MW) should be accepted as part of SCE's 2009 RPS Procurement Plan.

28. SDG&E's proposal for an Imperial Valley-specific solicitation should be accepted.

29. PG&E's proposal for a "Pilot Program for Pre-Approvals," and SCE proposal for "Pre-Approvals for Short-Term Contracts" should not be adopted in this order, but should be considered in another order.

30. PacifiCorp should make clear in its next IRP or Supplement how it intends to achieve 20% by 2010.

31. The 2009 RPS solicitation schedule in Appendix B should be adopted.

32. The same approach for Commission review and acceptance, rejection or modification of the 2010 RPS Procurement Plans should be used as employed for prior Plans, with the assigned Commissioner setting the specific schedule and addressing TRCRs.

33. Evidentiary hearings are not necessary.

34. This proceeding should remain open.

35. This order should be effective today so that the 2009 RPS solicitation may proceed without delay.

ORDER

IT IS ORDERED that:

1. Each utility-proposed renewable energy procurement plan, as part of the California Renewables Portfolio Standards Program, is conditionally accepted for the next Renewables Portfolio Standards Program solicitation cycle. Each Plan includes, but is not limited to, Protocols, Request for Proposals, Request for Offers, model contracts and/or Power Purchase Agreements. The Plans are in the following documents:

a. The Pacific Gas and Electric Company "2009 Renewable Energy Procurement Plan" filed September 15, 2008, including 2009 Solicitation Protocol, and as further addressed in February 27, 2009 Sunrise Comments, and March 6, 2009 Sunrise Reply Comments.

b. The Southern California Edison Company "2009 RPS Procurement Plan" filed September 15, 2008, including the 2009 Request for Proposals, and as further addressed in February 27, 2009 Sunrise Comments, and March 6, 2009 Sunrise Reply Comments.

c. The San Diego Gas & Electric Company "2009 Renewables Procurement Plan" filed September 15, 2008, including the 2009 Request for Offers, and as further addressed in February 27, 2009 Sunrise Comments, and March 6, 2009 Sunrise Reply Comments.

2. Each document referenced above is adopted on the condition that:

b. Unless suspended by the Executive Director or Energy Division Director within 21 days of the date this order is mailed, each utility shall use its amended Renewables Portfolio Standard Procurement Plan for its 2009 solicitation.

3. The 2009 Renewables Portfolio Standard procurement cycle shall be as stated in Appendix B. The schedule may be modified by the Executive Director or Energy Division Director as reasonable and necessary for efficient administration of this solicitation. Parties may seek schedule modification by letter to the Executive Director (pursuant to Commission Rules of Practice and Procedure).

4. The PacifiCorp "Supplement to its 2007 Integrated Resource Plan (2009 Supplement)" filed September 15, 2008, and the Sierra Pacific Power Company "Renewable Portfolio Standard 2009 Supplemental Filing" filed September 15, 2008, are each accepted.

5. Consistent with all prior and current Commission orders and directions, each utility ultimately remains responsible for reasonable Renewables Portfolio Standard program outcomes, within application of flexible compliance criteria. The Commission shall later review the results of renewable resource solicitations submitted for Commission approval, and accept or reject proposed contracts based on consistency with each approved Renewables Portfolio Standard Procurement Plan. The Commission shall also judge contract results, program results, and non-compliance pleadings by (but not limited to) considering the degree to which each utility implements Commission orders; reasonably elects to take or reject the guidance provided herein; reasonably demonstrates creativity, innovation and vigor in program execution; reaches program targets and requirements; and shows it took all reasonable actions to achieve compliance, including but not limited to the factors identified in this and prior orders.

6. The assigned Commissioner or Administrative Law Judge in this, or a successor, proceeding shall set a schedule for the filing and service of proposed Renewables Portfolio Standard Procurement Plans for the 2010 solicitation, including the filing of Integrated Resource Plans and Supplements, as necessary. The assigned Commissioner or Administrative Law Judge shall set a schedule for matters related to Transmission Ranking Cost Reports to be used in the ranking of bids in a Renewables Portfolio Standard solicitation. The assigned Commissioner shall assess the adequacy of each Transmission Ranking Cost Report based on filed comments and reply comments, and shall determine whether each Transmission Ranking Cost Report shall be accepted, modified, or other steps taken before a Transmission Ranking Cost Report is used in ranking bids in a Renewables Portfolio Standard solicitation.

7. Rulemaking 08-08-009 remains open.

This order is effective today.

Dated June 4, 2009, at San Francisco, California.

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