2. Background
On December 21, 2009, the Commission issued three of the four resolutions which are the subject of this application. On January 26, 2010, the Commission issued the fourth resolution.1 Each resolution approves without modification a power purchase agreement (PPA) between SCE and a seller of electricity pursuant to the renewables portfolio standard (RPS) program, and authorizes cost recovery by SCE.
On March 9, 2010, SCE applied for modification of the four resolutions. SCE asserts that the Commission has since 2005 repeatedly found payments made by SCE pursuant to RPS contracts to be fully recoverable in rates over the term of the contracts, subject to Commission review of SCE's contract administration. SCE states that the Commission now, without explanation in these four resolutions, limits SCE's cost recovery.
SCE claims the limitation presents two problems. First, by referring to a non-modifiable standard term and condition (STC) rather than the contract itself, SCE is concerned that it could be obligated to pay the seller pursuant to the contract but not be able to receive cost recovery for the payments. Second, by conditioning SCE's rate recovery on actions that SCE believes are in the sole control of the seller, SCE is concerned that the risk of contract breach by the seller is inappropriately placed on SCE. SCE concludes that these limitations jeopardize SCE's ability to proceed with the underlying contracts and, if the limitations are applied in future resolutions, will undermine SCE's ability to enter into new contracts. SCE proposes modified language in both dicta and findings of the four resolutions.
SCE asks for a quick decision, asserting that its rights to terminate three of the affected contracts will expire soon, and, in the case of one project, construction may be delayed if this issue is not resolved quickly. SCE moved for an order shortening time to respond or protest. The motion to shorten time was granted.
On March 29, 2010, responses in support of the application were filed by Independent Energy Producers Association (IEP) and San Diego Gas & Electric Company (SDG&E), and a protest in opposition was filed by the Division of Ratepayer Advocates (DRA). On April 5, 2010, replies in opposition to the protest of DRA were filed by SCE and Pacific Gas and Electric Company (PG&E).
On April 12, 2010, a prehearing conference (PHC) was held to obtain a more complete and better understanding of Applicant's and parties' positions. The Administrative Law Judge (ALJ) asked Applicant to identify the original language used by the Commission regarding cost recovery. On April 15, 2010, Applicant filed and served a document with the original language, the language it believes objectionable, and its proposed modifications.
1 The four resolutions are:
· Resolution E-4293 (issued December 21, 2009) approves a 20-year contract between Southern California Edison Company (SCE) and Echanis, LLC for 40 megawatts (MW) to 104 MW of wind energy from a project located in Harney County, Oregon.
· Resolution E-4263 (issued December 21, 2009) approves a 10-year contract between SCE and Ventura Regional Sanitation District for 1.57 MW to 5 MW of landfill gas energy from a project located in Ventura County, California.
· Resolution E-4300 (issued December 21, 2009) approves a two-year contract between SCE and Puget Sound Energy, Inc. for 50 MW to 223.6 MW of wind energy from a project located in Sherman County, Oregon.
· Resolution E-4295 (issued January 26, 2010) approves a one-year contract (through the end of June 2010) between SCE and Sierra SunTower, LLC for 5 MW of solar thermal energy from a project located in Lancaster, California.
