12. Comments on the Proposed Decision

The proposed decision (PD) of the ALJ in this matter was mailed to the parties in accordance with Pub. Util. Code Section 311 and comments were allowed under Rule 14.3 of the Commission's Rules of Practice and Procedure. Comments were filed by DRA, PE, PG&E, Reid, SDG&E, SCE, and TURN by December 6, 2010. Reply comments were filed by DRA, PG&E, Reid and SCE by December 13, 2010.

The PD has been revised in response to these comments, including a number of substantive revisions to clarify the intention of the PD. Such revisions include: clarifying the ratemaking implications of the costs of convergence bidding; clarifying that IOUs do not need to engage in any or all of these convergence bidding strategies; clarifying that Strategy 1 includes locations of load as well as generation resources; that Strategy 2 includes all intermittent resources; and clarifying that under Strategy 3 the information in reports will be used for evaluation of convergence bidding authority and that the Commission will not undertake post-hoc reasonableness reviews of defensive convergence bidding.

The IOUs and TURN requested that the stop loss limits be been increased . Because we are granting only interim authority to participate in an untested market, we decline to increase the stop loss limits at this time,

Both DRA and PE requested clarification regarding subsequent review of the interim authority contained herein. Such questions will be addressed in the normal course of the underlying proceeding.

DRA requested that the Commission clarify that expenses exceeding the stop loss limit would not be recovered from ratepayers. Such a clarification is unnecessary because exceeding the stop loss limit terminates authority to recover these costs. However, we have clarified that the annual stop loss limits apply to a 365 day average to avoid confusion. If an IOU exceeds the annual stop loss limit on a specific day, recovery of costs is suspended the following day, and not subsequent to the next monthly report. However, as PG&E requests in its reply comments, we clarify that bids made by an IOU prior to exceeding the stop loss limit were authorized and shall be recoverable as any other bid.

Minor changes have been made to the PD to resolve typographical, clarifying and other non-substantive matters.