4. Correction of Calculation Errors

4.1. Ratio of Firm-To-Installed Solar Photovoltaic

The first calculation error arises from the incorrect use in both D.08-12-058 and D.09-07-024 of 50%, rather than 39%, as the ratio of firm-to-installed solar photovoltaic (PV) capacity in the SDG&E service territory. This inadvertent error affects the value of the "sunk" solar PV costs deducted from the capital cost of the All-Source Generation Alternative, a deduction performed to avoid double-counting, since the sunk costs already had been accounted for under the California Solar Initiative (CSI). We describe the error in greater detail in the following paragraph.

Both decisions adopt SDG&E's assumption that the ratio of firm-to-installed solar PV capacity in the SDG&E service territory equals 39%. (D.08-12-058 at 40, fn. 92 citing SDG&E Exhibit SD-27 at 6; D.08-12-058 at 157, fn. 446 as modified by D.09-07-024 at 34 [Ordering Paragraph 6]; D.09-07-024 at 30.) However, the decisions also inadvertently apply a different ratio, 50%, which is the assumption that SDG&E had used initially, in Phase 1 of the proceeding. (D.08-12-058 at 156 (referencing 210 Megawatt (MW) solar PV (nameplate) and 105 MW solar PV (firm capacity) for the All-Source Generation Alternative); D.09-07-024 at 31, fn. 7; see also SDG&E Exhibit SD-6 at IV-14.)

Therefore, on our own motion we modify D.08-12-058 and D.09-07-024 to consistently use a 39% ratio of firm-to-installed solar PV capacity.

4.2. Solar PV Installations under the CSI

The second calculation error arises because D.08-12-058 and D.09-07-024 use different assumptions about the levels of solar PV installed under the CSI than the levels assumed in the Analytical Baseline. This error also affects D.09-07-024's calculation of the value of sunk solar PV costs that should be deducted from the capital cost of the All-Source Generation Alternative.

More particularly, the calculations of sunk solar PV costs in D.08-12-058 and D.09-07-024 assume that the CSI would result in installation of 3 MW (firm) of solar PV per year in SDG&E's service territory from 2006-2016. However, the Analytical Baseline adopted in D.08-12-058 attributes a different level of solar PV installation to the CSI -- between 3 MW and 4 MW per year - an assumption that is consistent with Commission findings in D.07-12-052, an earlier decision in a different docket. (See D.08-12-058 at 40; Exhibit Compliance 1.)

Therefore, on our own motion we modify the calculation of the sunk solar PV costs to accurately reflect the levels of installed solar PV the Analytical Baseline attributes to the CSI.

4.3. Conclusion

Consistent application of a 39% ratio and use of accurate levels of solar PV (those assumed in the Analytical Baseline) result in recalculation of the costs of sunk solar PV. The recalculated sum, $436 million, is the amount that must be subtracted from the assumed capital cost of the All-Source Generation Alternative. Therefore, we replace $368 million, the amount of sunk solar PV costs assumed in D.08-12-058 as modified by D.09-07-024, with the correct amount, $436 million.