1. Background and Procedural History
On July 20, 2006, the Commission issued Decision (D.) 06-07-029, which directed Southern California Edison Company (SCE) to issue a Request for Offers (RFO) seeking up to 1,500 megawatts (MW) of long-term contracts for new generation resources.4 The decision also established a cost allocation mechanism designed to encourage the development of new generation resources by designating the investor-owned utilities (IOUs) as the procurers of new generation for the benefit of their entire service territories. The cost allocation mechanism allocates the benefits and costs of new generation resource procurement to all benefiting customers in an IOU's service territory, including bundled service customers, direct access customers, and community choice aggregation customers.5
On August 14, 2006, SCE issued an RFO soliciting up to 1,500 MW of power purchase agreements lasting up to 10 years from new generation facilities (New Gen RFO). Included were Standard Track projects that could be available on or before August 1, 2013.6
SCE filed an Application, on April 4, 2008, for approval of the four power purchase agreements (Contracts) selected in the New Gen RFO, including a Contract with El Segundo Energy Center LLC (El Segundo), a wholly owned subsidiary of NRG Energy, Inc. On March 5, 2008, SCE and El Segundo executed a ten-year power purchase tolling agreement (El Segundo Contract) for up to 550 MW of expected contract capacity and associated energy from the El Segundo Energy Center Facility (Facility). The Facility will be located in El Segundo, California and will consist of two One-on-One Siemens SGT6-5000F combined-cycle gas turbines featuring dry cooling technology.
In its Application, SCE also asked the Commission to authorize allocation of the benefits and costs of all four Contracts to all benefiting customers in accordance with D.06-07-029. SCE further stated that the California Independent System Operator (CAISO) had conducted the 2007 Q3 Generation Deliverability Study to assess the deliverability of all existing and proposed generation projects in the CAISO queue and that all four projects described in the Application were deliverable under the study's conditions.7
The Division of Ratepayer Advocates (DRA) filed a timely protest to preserve its right to voice any concerns it might have after completing discovery. DRA wanted to confirm the cost effectiveness of the selected contracts and to verify that they were chosen after SCE had exhausted its preferred resources and complied with the state's Energy Action Plan and the Commission's loading order. After its review, DRA concluded it did not protest or oppose approval of the four Contracts, the need for them, or the cost recovery and allocation of benefits and costs pursuant to D.06-07-029. However, DRA amended its protest to seek correction of SCE's understatement of its resource outlook for 2011-2013 based on a large number of variables.8
On September 18, 2008, the Commission issued D.08-09-041 which approved SCE's Application for authorization to sign four Contracts for up to 1350.30 MW and approved the allocation of benefits and costs of the four Contracts to all benefitting customers in accordance with D.06-07-029 and D.07-09-044. A small number of typographical errors in the decision were corrected in D.09-01-004.
On August 25, 2010, SCE filed a Petition for Modification (PFM) of D.08-09-041 seeking Commission approval of an amended and restated El Segundo Contract (Amended El Segundo Contract) on an expedited basis, in order for El Segundo to meet its revised on-line date.9 No protests or responses were filed to SCE's PFM.
Filed concurrently with the PFM were motions to shorten time to respond to the PFM and to file portions of the PFM and its attachments under seal. On October 12, 2010, SCE filed an amended PFM and Motion in Order to reduce the amount of information it sought to keep confidential in conformance with D.06-06-066. The motions were resolved in separate rulings by the assigned Administrative Law Judge (ALJ) Melanie M. Darling.10
4 Id. at 47, 62-63 (OP 7).
5 D.06-07-029 at 26.
6 SCE's Application for Approval of Results of Standard Track of its New Generation Request For Offers (Application) at 2.
7 D.08-09-041 at 3-4.
8 Variables include forecast and procurement uncertainties arising from expiring contracts, the deadline for renewable portfolio standards program (RPS), possible completion of new transmission lines, and a substantial number of aging power plants will either be retired or continue to run.
9 On February 3, 2010 and July 22, 2010, SCE consulted with its Cost Allocation Mechanism (CAM) Group about the amendments, as required by D.07-12-052.
10 On September 13, 2010, the ALJ shortened the time to file responses to the PFM from 30 to 23 days. On October 15, 2010, the ALJ granted the Amended Motion to allow portions of the Amended PFM to be filed under seal pursuant to D.06-06-066.
