11. Non-Bypassable Charge
PG&E requests recovery of any stranded costs associated with the PV Program through a non-bypassable charge.79 PG&E believes it is allowed to recover the stranded cost associated with the PPAs over the entire term of the agreements. PG&E also believes it is allowed to recover the stranded costs associated with each UOG facility installed for a 10-year period following commercial operation of the facility.80
11.1. Parties' Positions
DACC/WPTF argues that the stranded cost recovery established in
D.04-12-048 applies only to UOG acquired as a result of the procurement process specified in that decision. DACC/WPTF argues that PG&E has failed to comply with that process, therefore, if the PV Program creates any stranded costs, those costs should be borne by PG&E's shareholders not its ratepayers. In comments, PG&E argues that in rejecting its request to recover stranded costs via a
non-bypassable charge (NBC) the APD as issued ignored Commission precedent. In its reply comments, DACC/WPTF reiterates its position that the Commission's policies regarding NBC's are inapplicable to this program and also argues that forcing DA customers bear stranded costs associated with this program is unfair to the extent that these customers already bear RPS costs given that Energy Service Providers (ESPs) have their own RPS compliance obligations, and furthermore, that customer migration to ESPs results in a reduced RPS compliance obligation for the IOUs.
11.2. Discussion
Based on comments and further reflection on this issue, we disagree with DACC/WPTF that the approach to stranded cost recovery established in
D.04-12-048 and further developed in D.08-09-012 is not applicable to PG&E's Solar program. DACC/WPTF assert that the phrase "acquired as a result of the procurement process" in Conclusion of Law 16 of D.04-12-04881 limits the applicability of the decision's findings regarding stranded cost recovery to circumstances where a competitive RFO was used to select the contracts or assets that may result in stranded costs. We disagree with this interpretation of Conclusion of Law 16. Had the Commission wanted to confine recovery of stranded costs associated with UOG facilities to those procured under the competitive process as DACC/WPTF suggests, it could have easily stated so in the decision. The phrase "as a result of the procurement process" is not synonymous with "as a result of a competitive solicitation or RFO."
Therefore, we find that the direction provided by the Commission in
D.04-12-048 is applicable to the stranded costs of the PV Program. D.08-09-012 further elaborated which customer groups would be subject to non-bypassable charges to recover stranded costs. Specifically, in that decision the Commission found that "the NBCs, which include any above market costs related to RPS contracts, will not apply to departed load that is excluded from the load forecasts used to the develop the IOUs' Long Term Procurement Plans. The excluded departing load includes municipal departing load, with the exception of large municipalizations, and CGDL. DA and CCA load are fully subject to the D.04-12-048 NBCs [italics added]."82 Ordering Paragraph 1 of this decision is equally clear: "Decision (D.) 04-12-048 and D.06-07-029 non-bypassable charges (NBCs) shall be imposed on direct access (DA) and community choice aggregation customers, as well as new Western Area Power Administration (WAPA) departing load and split wheeling departing load customers."
In light of the forgoing discussion, we agree with PG&E that it should be allowed to recover any stranded costs associated with its Solar PV program pursuant to D.08-09-012 and D.04-12-048, including recovery of these stranded costs via NBCs from DA customers. Furthermore, in making arguments that subjecting DA customers to stranded costs associated with these facilities is unfair given that ESPs face their own RPS compliance obligations, DACC/WPTF appears to be litigating issues here that are more appropriately considered in R.06-02-013 and/or through a petition to modify D.08-09-012.
79 Exhibit 1 at 6-7.
80 Exhibit 1 at 6-7.
81 COL 16, in full states, "The utilities should be allowed to recover stranded costs for their non-RPS resource commitments from departing load over either the life of the contract or 10 years, whichever is less. The ten-year recovery period should also apply to any utility-owned generation acquired as a result of the procurement process, commencing once the resource begins commercial operation. Stranded costs arising from RPS procurement activities should be collected from all customers, including departing load, over the life of the contract. The utilities should be allowed the opportunity to justify in their applications, on a case-by-case basis, the desirability of adopting a cost recovery period of longer than ten years for their non-RPS resource commitments. Cost recovery for that portion of a resource acquired by the utilities to meet local reliability needs should be recovered from all customers."
82 D.08-09-012 at 56.
