6. Assignment of Proceeding

Michael R. Peevey is the assigned Commissioner and Angela K. Minkin is the assigned ALJ in this proceeding.

1. PG&E, DRA, TURN, CARE, and CURE filed an all-party Settlement Agreement that resolves all disputes regarding the reasonableness of the Mariposa PPA and PG&E's cost recovery proposal.

2. PG&E conducted an open, competitive and fair solicitation and contract selection process.

3. The Mariposa PPA is a 10-year fuel conversion agreement for dispatchable energy and capacity from four combustion turbines.

4. The Mariposa PPA will be delivered to PG&E's Kelso 230 kV substation and has a capacity of 184 MWs under peak July conditions.

5. The 184 MWs represented by the Mariposa PPA reasonably contributes toward the range of need previously authorized in D.07-12-052.

6. The Mariposa Energy Project is a dispatchable peaking power plant with quick start and spinning reserve capabilities and therefore provides operational flexibility to provide "firming" for intermittent renewable resources.

7. We concur that PG&E's remaining need is 1,328 MWs under peak July conditions.

8. Because viability is an important consideration to ensure that projects provide the necessary energy and capacity, it is important for PG&E to work closely and proactively with Mariposa and other generators on the public outreach effort.

9. Parties have had the opportunity to fully review PG&E's prepared testimony and DRA and TURN have participated in the PRG process.

10. PG&E anticipates that upgrades of its transmission system will be required and that Mariposa Energy and other generators in the group evaluated by the CAISO will share these costs.

1. As described in its testimony, PG&E's LTRFO complies with the requirements of D.07-12-052, in that the LTRFO was open to new renewable resources, existing QF, distributed generation, and repowered and new conventional fossil fired generation.

2. The Independent Evaluator was involved in all phases of the solicitation and review process, as required by D.07-12-052 as modified by D.08-11-008.

3. The Mariposa PPA is consistent with the requirements of D.07-12-052, including the preferred loading order, and the need for disptachable ramping resources.

4. PG&E's has elected not to place the Mariposa PPA in an energy auction; this approach is consistent with the settlement agreement approved in D.07-09-044 and is therefore reasonable.

5. We concur with PG&E's determination that the GHG EPS adopted in D.07-01-039 does not apply to the Mariposa PPA because the capacity factor is less than 60 percent.

6. It is reasonable that PG&E file one application for approval of additional agreements resulting from its 2008 LTRFO, so that parties can more fully evaluate the cost-effectiveness of such agreements.

7. The cost recovery approach described in the proposed Settlement Agreement is consistent with prior Commission decisions, including recovery of costs through the ERRA, as established in D.02-12-074, and any stranded costs associated with the Mariposa PPA from departing load through a non-bypassable charge, as set forth in D.04-12-048 and D.08-09-012.

8. To the extent that transmission upgrades are required, PG&E should comply with the requirements of General Order 131-D.

9. PG&E may require reimbursement from Mariposa Energy, LLC for any intervenor compensation awarded for proceedings regarding the reasonableness of amendments to the Mariposa PPA, as outlined in the proposed Settlement Agreement, but we find that any such reimbursed awards cannot be recovered from ratepayers.

10. The all-party Settlement Agreement complies with Article 12 of the Commission's Rules of Practice and Procedure, and is reasonable in light of the whole record, consistent with the law, and is in the public interest.

11. Approval of the PPA is consistent with the Commission's goals in terms of PG&E's supply portfolio and assisting PG&E in dispatachability and management of its renewable resources.

12. The provisions of the Settlement Agreement (Attachment A) are reasonable and should be approved.

13. The Mariposa PPA should be approved as reasonable.

14. The designation of this proceeding should be changed so that hearings are no longer necessary.

15. An order in this proceeding should be effective immediately.

16. Application 09-04-001 should be closed.

ORDER

IT IS ORDERED that:

1. The September 3, 2009 Joint Motion of Pacific Gas and Electric Company, the Division of Ratepayer Advocates, The Utility Reform Network, CAlifornians for Renewable Energy, and California Unions for Reliable Energy for Approval of Settlement Agreement (attached to this decision as Attachment A) is approved without modification and includes the following key provisions:

a. The total need to be procured from the 2008 Long-Term Request for Offers will be limited to 1,512 megawatts under peak July conditions, inclusive of the 184megawatt included in the Mariposa Power Purchase Agreement.

b. The balance of Pacific Gas and Electric Company's need authorization (1,328 megawatts) will be met, but not exceeded, by one application for approval of additional agreements resulting from Pacific Gas and Electric Company's 2008 Long-Term Request for Offers.

c. Pacific Gas and Electric Company will meet and confer with the parties in the event that Mariposa Energy requests a power purchase agreement amendment that seeks to increase the prices of the Mariposa Power Purchase Agreement for capacity, fixed operations and maintenance rate, and variable operations and maintenance costs rate, as set forth in Pacific Gas and Electric Company's confidential testimony. In the event of such an amendment, the prices will not exceed those delineated in the testimony unless the parties concur with the amendment to these prices or Pacific Gas and Electric Company has conducted a Request for Offers, evaluated market alternatives, and found the new prices proposed for the amendment to be competitive with the results of its Request for Offers. The parties reserve the right to oppose any such amendment. Pacific Gas and Electric Company will require as a condition for any amendment that Mariposa Energy reimburse Pacific Gas and Electric Company for any Commission-awarded intervenor compensation, to the extent that there is intervenor participation in a Commission proceeding regarding the reasonableness of any amendment.

d. Pacific Gas and Electric Company shall recover the costs of all payments made pursuant to the Mariposa Power Purchase Agreement through the Energy Resources Recovery Account. Pacific Gas and Electric Company shall recover any stranded costs associated with the Mariposa Power Purchase Agreement from departing load throughout the term of the Power Purchase Agreement as non-bypassable charges consistent with Decision (D.) 04-12-048 and D.08-09-012.

2. Pacific Gas and Electric Company's power purchase agreement with Mariposa Energy, LLC is approved as reasonable.

3. To the extent that Pacific Gas and Electric Company requires reimbursement from Mariposa Energy, LLC for any intervenor compensation awarded for proceedings regarding the reasonableness of amendments to the Mariposa Power Purchase Agreement, outlined in Ordering Paragraph 1.c., any such reimbursed awards shall not be recovered from ratepayers.

4. Application 09-04-001 is closed.

This order is effective today.

Dated October 15, 2009, at San Francisco, California.

Previous PageTop Of PageGo To First Page