ALJ/TJS/tcg Date of Issuance 12/9/2009
Decision 09-12-014 December 3, 2009
BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA
DECISION APPROVING APPLICATION
DECISION APPROVING APPLICATION 1
1. Summary 2
2. Factual and Procedural Background 3
3. Legal Background 9
4. Issues before the Commission 11
5. Is it Reasonable to Permit SCE to Recover HECA Costs in Rates? 12
5.1. Is the HECA Project So Duplicative of Other Projects That Feasibility Studies Fail to Produce Benefits that Justify Costs? 12
5.2. Are SCE's Phase I Costs Reasonable? 19
5.3. Are SCE's Phase II Costs Reasonable 26
6. Does SCE's Public Disclosure Plan Comply with the Requirements
of Resolution E-4227A? 34
7. Does SCE's HECA Project Fit Into SCEs Overall Procurement
Strategy, as Required by Resolution E-4227A? 36
8. Has SCE Provided Notice to All Parties to D.06-05-016 and
D.07-12-052, as Required by Resolution E-4227A? 37
9. Has SCE Provided a Detailed Budget for the HECA Project in its Application, as Required by Resolution E-4227A? 38
10. Other Issues 42
10.1. Does the Federal decision to fund a portion of the costs of the HECA studies rely on ratepayer's participation in funding? 42
10.2. Warm-line and confidentiality issue? 43
11. Conclusion 46
12. Comments on Proposed Decision 46
13. Assignment of Proceeding 56
Findings of Fact 56
Conclusions of Law 60
ORDER 61
DECISION APPROVING APPLICATION
1. Summary
This decision approves the application of Southern California Edison Company (SCE) to recover up to $30 million in costs necessary to co-fund feasibility studies of a California integrated gasification combined cycle plant with carbon capture and storage.1 The decision finds that it is reasonable for SCE to commit up to $17 million to the Phase I feasibility studies associated with the facility known as the Hydrogen Energy California project. In addition, the decision finds it is reasonable for SCE to fund up to $13 million in Phase II studies that will further examine the permitting, engineering, and economics associated with this project, if the Phase I feasibility studies demonstrate that further studies are warranted.
This decision finds that the costs associated with the studies of this project are consistent with other projects of this type and amount to only 20 percent of the total forecast costs of the studies.
The project will provide SCE and its ratepayers with important, although unquantifiable, benefits. The project will provide SCE with a better understanding of this promising technology, which has the potential to reduce greenhouse gases and provide clean electricity. These benefits are especially beneficial to SCE ratepayers because California policy seeks to reduce greenhouse gases.2
For these reasons, it is reasonable to authorize SCE to recover up to $30 million in rates for participating in the studies associated with Phase I and Phase II of this project.
The decision approves SCE's plan to disclose the results of the studies to the public. The decision finds that SCE has met all the conditions set out in Resolution E-4227A pertaining to this application.
This proceeding is closed.
1 The HECA Study consists of multiple studies, which collectively determine the feasibility of this project. The words "study" and "studies" are used interchangeably throughout this decision.
2 See Pub. Util. Code § 743.1, § 748(a), § 2842, § 2843, § 8341, and Executive Orders S-7-04 and S-3-05. All references are to the Public Utilities Code unless otherwise stated.
