ALJ/HYS/avs Date of Issuance 3/16/2011
Decision 11-03-011 March 10, 2011
BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA
Application of Pacific Gas and Electric Company for Approval of Three Power Purchase Agreements With Existing Qualifying Facilities and Associated Cost Recovery. (U39E) |
Application 10-10-004 (Filed October 8, 2010) |
DECISION APPROVING THREE POWER PURCHASE AGREEMENTS
WITH EXISTING QUALIFYING FACILITIES
This decision approves three power purchase agreements between Pacific Gas and Electric Company (PG&E) and three existing qualifying facilities, and cost recovery associated with those agreements, contingent on the "Qualifying Facility and Contained Heat and Power Program Settlement Agreement" becoming effective. This proceeding is closed.
1. Background
By this application, Pacific Gas and Electric Company (PG&E) requests Commission approval of three power purchase agreements (PPAs) between PG&E and three existing 48 megawatt (MW) cogeneration qualifying facilities (QFs): Kern Front Limited, Double C Limited, and High Sierra Limited (sellers).1
Each of these QFs currently sells energy and 47 MW of firm capacity to PG&E under must-take, Standard Offer No. 2 firm capacity contracts that are currently set to expire on May 27, 2014, May 9, 2011, and March 26, 2011, respectively.
The Kern Front project was initially offered in response to PG&E's 2008 Long Term Request for Offers. Kern Front offered to convert its must-take contract into a utility-scheduled power purchase agreement. While PG&E, with its Procurement Review Group, was reviewing the offer, Double C and High Sierra similarly offered to convert their must-take contracts into utility-scheduled power purchase agreements.
During or shortly after this period, PG&E, together with the California Cogeneration Council, Independent Energy Producers Association, Cogeneration Association of California/Energy Producers and Users Coalition, The Utility Reform Network, Division of Ratepayer Advocates, Southern California Edison Company and San Diego Gas & Electric Company entered into negotiations to resolve numerous outstanding QF-related disputes. That effort culminated in a comprehensive "Qualifying Facility and Combined Heat and Power Program Settlement Agreement" (QF/CHP Settlement), which the Commission approved in Decision (D.) 10-12-035.
PG&E filed this application in anticipation of the Commission's approval of the QF/CHP Settlement, asserting that the power purchase contracts are just and reasonable, in large part, because they are consistent with the QF/CHP Settlement. Alliance for Retail Energy Markets (AReM) filed a protest opposing the application, including the proposed cost recovery provisions, as premature because the QF/CHP Settlement had not been adopted by the Commission. The California Independent System Operator (CAISO) filed a response supporting the application.
On December 3, 2010, the assigned commissioner issued a scoping memo and ruling which identified the issues to be determined and set a schedule for addressing those issues. In particular, the scoping memo determined that the matter should be submitted upon the filing of concurrent opening and reply briefs without the need for evidentiary hearing, set a schedule in anticipation that the Commission would issue a decision on the QF/CHP Settlement on December 16, 2010, and provided an opportunity for parties to file a motion for extension of time or other procedural relief upon a showing that the Commission decision approving the QF/CHP Settlement, if any, substantially deviated from the then-pending proposed decision. The Commission approved the QF/CHP Settlement in D.10-12-035 on December 16, 2010, whereupon no motions seeking an extension of time or other procedural relief were filed.
By unopposed motion filed January 10, 2011, and granted by informal ruling of the Administrative Law Judge (ALJ) on February 3, 2011, CAMS Juniper (California), LLC, Double C Limited, High Sierra Limited, and Kern Front Limited jointly moved for party status.
PG&E, AReM and, jointly, CAMS Juniper (California), LLC, Double C Limited, High Sierra Limited, and Kern Front Limited filed concurrent opening briefs on January 10, 2011, AReM filed its concurrent reply brief on January 20, 2011, and PG&E filed its concurrent reply brief on January 24, 2011, upon which the proceeding was submitted.
1 The corporate names of the selling parties to the existing QF contracts are Kern County Cogen, LLC, Double C-2 Cogen, LLC, and Sierra Cogen, LLC, respectively. The sellers have changed the corporate names and entities for purposes of the power purchase agreements that are the subject of this application.
