3. Parties' Positions

Cerritos argues that AB 80 should be interpreted as granting a complete exemption from the direct access suspension so that it may offer service to retail end-use customers within its jurisdiction on an opt-in basis and that the power to provide this service may come from generation sources other than MPP. It notes that the exemption granted in § 366.1(b) is "notwithstanding" the suspension direct access service ordered Water Code § 80110 and D.09-01-060.⁵ It further states that the term "community aggregator" is a term of art that was used to describe a form of direct access service.⁶ Cerritos additionally relies on the legislative history of AB 80 to support its conclusion that the Legislature intended to reinstate direct access service for Cerritos.⁷ Finally, Cerritos argues that AB 80 does not limit Cerritos' load to its entitlement share of output from MPP. As support, it refers to a Legislative Counsel opinion issued as part of the Legislature's consideration of AB 1169 (2003-2004 Legislative Session). That analysis concluded that since § 366.1 contained no express language limiting the quantity of customer load, Cerritos was not limited to serving its customers with output from MPP.⁸

Cerritos further contends that there are no substantive reasons why the ILL should remain in place since AB 80 is already self-limiting. It notes that AB 80 only authorizes Cerritos to serve retail end-use customers in its jurisdiction and provide service on an opt-in basis. Further, Cerritos states that any customer opting-in for service would need to meet its definition of public benefit customer. As such, Cerritos claims that the maximum additional load that it could serve if the ILL were removed would be 32 MW, which it believes would have a minimal impact on SCE.⁹ In contrast, Cerritos states that retaining the ILL has a significant negative impact on Cerritos. It claims that since the ILL is based on peak demand, it cannot use the entirety of its generation entitlement share to serve retail load and must sell its excess generation entitlement share in the wholesale market at lower prices. As a result, Cerritos contends that retaining the ILL prevents it from realizing the full economic benefit of its generation entitlement share.¹⁰ Further, Cerritos asserts that the ILL results in Cerritos being dependent on a single source of generation, making it vulnerable to fuel and operating risks.¹¹

SCE maintains that AB 80 is ambiguous and may be interpreted in one of two ways. It states that AB 80 may be interpreted as authorizing Cerritos to offer direct access service on an opt-in basis and to serve this load with its generation entitlement share from MPP.¹² Alternatively, it believes that AB 80 could be interpreted as a full exemption from the direct access suspension, but that all customers could take service under community aggregation on an opt-out basis. SCE asserts that Cerritos' interpretation is both contradictory to legislative intent and places MPP participants in a better position than other pre-suspension direct access arrangements.¹³

SCE further argues that AB 80 was enacted to ensure that there is a market for MPP's generation so that MPP would come on line.¹⁴ It asserts that to accomplish this purpose, the Legislature only needed to provide a limited exemption from the suspension of direct access service to allow for the sale of output from MPP. SCE contends if Cerritos' interpretation were adopted, then Cerritos would have more rights than other pre-existing direct access arrangements. SCE believes such an outcome would be unfair to other providers of direct access service, who were also impacted by the suspension of direct access service.¹⁵

⁵ Cerritos' Application at 14-15.

⁶ Cerritos' Opening Comments at 4.

⁷ Cerritos' Opening Comments at 10-13.

⁸ Cerritos' Opening Comments at 22-23; see also Cerritos' Opening Comments, Exh. H at 4-5.

⁹ Cerritos' Application at 24-25.

¹⁰ Cerritos also argues that sale of output from MPP to the wholesale market could potentially raise tax law issues, since Cerritos' share of MPP was financed using tax-exempt bonds. (Cerritos' Opening Comments at 20.) We find this argument speculative. Cerritos claims there is a potential violation but cites to no authority as to the likelihood of such a violation if sale of excess electricity were to continue.