I. INTRODUCTION
In Decision (D.) 04-12-048, we adopted a long-term procurement plan for Pacific Gas and Electric Company ("PG&E"), among other utilities, which provided direction on PG&E's procurement of resources over a 10-year horizon through 2014.1 In D.06-11-048, we approved PG&E's results of its 2004 long-term request for offer ("2004 LTRFO"). This decision also approved PG&E's resulting projects, including the original Power Purchase Agreement. ("Original PPA") with Russell City Energy Company, LLC ("RCEC").2 We also determined in D.06-11-048 that the projects were needed and cost-effective. (Id. at pp. 6-7, 38 [Finding of Fact No. 3], 42 [Conclusion of Law No. 1], &
p. 45 [Ordering Paragraph No. 1] (slip op.).)
On November 8, 2007, RCEC notified PG&E of permitting delays and cost increases (e.g. in equipment, materials and labor), and requested modifications to the original PPA. The modifications included a delay of the on-line date of the RCEC project by two years to June 2012, revision of the contract price, and other amendments.
On June 6, 2008, RCEC and PG&E signed a letter agreement that provided the parties could negotiate modifications to the Original PPA. The results of the negotiation were embodied in the First Amended PPA ("1st APPA), which was submitted for Commission approval in Application (A.) 08-09-007. The Division of Ratepayer Advocates ("DRA") and The Utility Reform Network ("TURN") filed protests to this application.
PG&E, RCEC, Division of Ratepayer Advocates ("DRA"), The Utility Reform Network ("TURN"), and California Unions for Reliable Energy ("CURE") (collectively, "Joint Parties") reached settlement on the issues raised in this application,3 and submitted the Second Amended and Restated Power Purchase Agreement
("2nd APPA"),4 stating that the 2nd APPA was a settlement among the Joint Parties. California Pilots Association, Skywest Townhouse Homeowners ("Skywest"), and Hayward Area Planning Association ("HAPA") (collectively, "Group Petitioners") and Californians for Renewable Energy, Inc. ("CARE") and Rob Simpson (collectively, "CARE/Simpson") opposed the settlement. In D.09-04-010, the Commission approved the Joint Parties' settlement agreement, and thus, approved the 2nd APPA. In determining whether the settlement was reasonable in light of the whole record, we considered comparisons made by PG&E and DRA and TURN, including those that lead us to conclude that the
2nd APPA was competitive with PG&E's 2008 LTRFO. (See D.09-04-010, pp. 15-18.)
Group Petitioners timely filed a joint application for rehearing. A rehearing application was also timely filed by CARE/Simpson. Joint Parties filed a response, stating its opposition to both applications for rehearing.
In their joint rehearing application, the Group Petitioners allege the following legal errors: (1) The Decision is inconsistent with D.04-12-048 and
D.06-11-048, which allegedly preclude new bilateral contracts that shift greenhouse gas ("GHG") costs and risks from the developer to the customers; (2) Group Petitioners were denied due process when the rehearing applicants were not allowed to present evidence that the amended power purchase agreement constituted an unlawful novation and was subject to competitive bidding; (3) the Decision denied the Group Petitioners due process and equal protection by finding that they were not customers eligible to request intervenor compensation, since they were not permitted any opportunity or leave to supplement their request. The rehearing application also asks for oral argument under Rule 16.3 of the Commission Rules of Practice and Procedure.
In their rehearing application, CARE/Simpson support the Group Petitioners' application for rehearing. In addition, CARE/Simpson argue that section 10.4 of the 2nd APPA deprives the ratepayers of the right of notice and review should the Russell City Energy Center be sold or transferred to another owner or operator, and the parties were denied review of the calculations showing compliance with Environmental Performance Standards ("EPS"). CARE/Simpson also request oral argument.
We have reviewed each of the allegations raised in both rehearing application, and are of the opinion that legal error has not been demonstrated. However, we will modify the Decision to clarify a statement which lead Group Petitioners to believe that we had relied on a calculation outside the record. Rehearing of D.09-04-010, as modified, is denied.
1 Opinion Adopting Pacific Gas and Electric Company, Southern California Edison Company and San Diego Gas & Electric Company's Long-Term Procurement Plans ("Utilities' LTPP Decision") [D.04-12-048] (2004) ) ____ Cal.P.U.C.3d ___.
2 Opinion Approving Results of Long-Term Request for Offers ("Order Approving LTRFO Results") [D.06-11-048, pp. 6-7 (slip op.)] (2006) ___ Cal.P.U.C.3d ___. The RCEC Project is the 601 MW combined-cycle listed as "Calpine Hayward." (See id. at p. 6 (slip op.).) RCEC is an affiliate of Calpine Corporation. (See Exhibit PG&E-1, p. 1-1, fn. 1 [Public Version].) The Original PPA involved a 10 year contract to provide PG&E with energy capacity and energy from this facility in Hayward, California. (Application of PG&E for Expedited Approval of the Amended Power Agreement for the Russell City Energy Company Project ("PG&E Application"), A.08-09-007, filed September 10, 2008, p. 10 [Public Version]; see also, Order Approving LTRFO Results [D.06-11-048], supra, at p. 6 (slip op.).)
3 For a list of the specific issues, see Assigned Commissioner's Scoping, dated
November 17, 2008 (" Scoping Memo"), pp. 2-3.)
4 A copy of the 2nd APPA can be found as Exhibit A in Joint Motion of Pacific Gas and Electric Company, Russell City Energy Company, LLC, Division of Ratepayer Advocates, California Unions for Reliable Energy, and The Utility Reform Network for Approval of Second Amended and Restated Power Purchase Agreement ("Joint Parties' Motion for Approval of 2nd APPA"), dated December 23, 2008 [Confidential (Under Seal].
