6. Utility Applicability
ED proposes limiting RAM to the three largest IOUs. We agree.
In comments to the Proposed Decision, SCE and SDG&E argue that they should be able to separately design and offer their own procurement programs that target the same market sector, instead of using RAM. SCE also suggests that all megawatts procured through its RSC program should draw down on its RAM capacity requirement.
We agree in part. RAM is the Commission's preferred approach for pursuing projects in the 1 to 20 MW size range for all the reasons already stated. As Vote Solar notes, allowing the utilities unlimited discretion in designing their own, utility specific programs poses certain challenges to both independent power producers (IPPs) and the Commission.39 IPPs must contend with potentially substantial differences in eligibility requirements and contracting terms that were not developed through a transparent Commission proceeding, and the Commission then must evaluate the resulting contracts that have not been substantially vetted to ensure the contracts and underlying projects are sufficiently viable to merit approval. By adopting RAM, we create a program that provides greater consistency and embodies program rules and contracting terms that facilitate relatively quick review via a Tier 2 advice letter. Accordingly, in the interest of promoting competition and streamlining of the administrative process, the utilities should pursue this market segment specifically via RAM. In other words, while IOUs may use RAM, annual RPS solicitations, or other Commission-approved programs such as the solar photovoltaic programs to procure system-side DG projects up to 20 MW, they may no longer use bilateral negotiations or voluntary programs like SCE's RSC.40
Nonetheless, we recognize that SCE has recently executed contracts through its RSC program.41 In the interest of market continuity, SCE may count any of these contracts approved by the Commission towards its capacity cap.42 See Section 7.1 for details on how SCE can count contracts already executed through SCE's 2010 RSC to SCE's capacity cap. Furthermore, SCE may submit additional contracts resulting from the RSC solicitations that have been conducted to date, however other than those contracts executed as of the effective date of this decision, these contracts will not reduce SCE's obligations under RAM.
SCE, TURN, and Redwood Renewables also argue that the RAM program should apply to all CPUC-jurisdictional load-serving entities (LSEs). Additionally, § 365.1(c)(1) requires the Commission to ensure that "other providers" (which do not include community choice aggregators) are subject to the same requirements applicable to the three largest IOUs that are implemented pursuant to the Commission authority under the RPS program.
Notwithstanding the arguments that the RAM program should apply to all CPUC-jurisdictional LSEs, we will not apply RAM to CPUC jurisdictional LSEs beyond the IOUs. We apply fundamental RPS program basics to all LSEs (e.g., targets, reporting, penalties), including not only the largest IOUs, but also small and multi-jurisdictional utilities (SMJUs), community choice aggregators (CCAs), and electric service providers. We are considering expansion of these requirements to electric service providers (ESPs) pursuant to PU Code § 365.1(c)(1).43 In consideration of that expansion, we recognize that Commission requirements regarding specific RPS program elements necessarily vary among LSEs based on the Commission's regulatory authority, responsibilities, and duties with regard to each type of LSE.44
With these distinctions in mind, we limit RAM to the three largest IOUs. As CCAs are expressly exempted by § 365.1(c (1), and they have not had an opportunity to comment here, because no CCA was in operation at the time the record was open for comment. We therefore decline to apply any RAM requirements to CCAs at this time. It would also be inappropriate to apply the RAM to ESPs for different reasons. The Commission has no regulatory authority over ESP contracting processes. Such authority extends from the Commission's regulatory rate authority over IOUs, and serves no purpose with regard to ESP contracts since the Commission has no regulatory rate authority over ESPs. In addition, because the ESPs do not submit their contracts to us for approval, and a key benefit and objective of RAM as a procurement vehicle is to provide streamlined contract approval for projects that conform to the RAM eligibility requirements, it is not relevant to the ESPs.
We also do not impose the RAM requirement on SMJUs. SMJUs are not addressed in § 365.1. Further, application of the RAM to SMJUs is impractical given their size. PacifiCorp, the largest SMJU, has been allocated 0.405% (less than one-half of one percent) in the Existing FIT program.45 The total allocation to the four SMJUs combined is 0.599% (less than six-tenths of one percent).46 Allocation to PacifiCorp (the largest of the four SMJUs) of its share of the 1,000 MW RAM total program adopted here would be about 4 MW (and to all four of the SMJUs would be about 6 MW). PacifiCorp would be allocated about 1 MW (and all four SMJUs would be allocated about 1.5 MW) in each of the four auctions adopted above. We are not persuaded that, as a practical matter, it is rational to apply the RAM program (up to 20 MW per transaction) to each SMJU with allocated shares of 4 MW or less for the total program (and 1 MW or less per auction). We employed this same practical consideration in 2007 when we limited the required FIT offering by the SMJUs in the Existing FIT to 1 MW rather than 1.5 MW. (See D.07-07-027 at 26.) We do so again here.
39 Comments on Proposed Decision at 3.
40 We note that nothing in this decision alters the decisions and obligations related to the utilities' respective solar programs, the existing AB1969 FIT, purchases from QFs pursuant to PURPA, or other programs the Commission has authorized in prior decisions except as specifically identified in this decision.
41 SCE's press release (November 19, 2010) reports that it has executed 21 contracts for nearly 259 MW from its 2010 RSC program. See http://www.edison.com/pressroom/pr.asp?bu=&year=0&id=7502
42 We note that these projects are subject to a Tier 3 review process, and the Commission has the authority to approve or reject those projects based on their merits.
43 SB 695 (Kehoe), Stats. 2009, ch. 337. Section 365.1(c)(1) directs the Commission to "ensure that other providers are subject to the same requirements that are applicable to the state's three largest electrical corporations..." The provision was triggered upon issuance of D.10-03-022 on March 15, 2010. Pursuant to a Ruling dated March 25, 2010, parties have filed briefs and reply briefs, and a proposed decision was filed in R.08-08-009 on September 10, 2010.
44 See, for example, D.05-11-025, D.06-10-019, D.08-05-029.
45 1,013 kW divided by 250,000 kW is 0.405%. (See D.07-07-027 at 9.)
46 1,497 kW divided by 250,000 kW is 0.599%. (Id.)
