ALJ/BWM/hkr/lil Date of Issuance 4/20/2011

Decision 11-04-030 April 14, 2011

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Order Instituting Rulemaking to Continue Implementation and Administration of California Renewables Portfolio Standard Program.

Rulemaking 08-08-009
(Filed August 21, 2008)

DECISION CONDITIONALLY ACCEPTING 2011
RENEWABLES PORTFOLIO STANDARD PROCUREMENT PLANS
AND INTEGRATED RESOURCE PLAN SUPPLEMENTS

DECISION CONDITIONALLY ACCEPTING 2011 RENEWABLES PORTFOLIO STANDARD PROCUREMENT PLANS AND INTEGRATED RESOURCE PLAN SUPPLEMENTS 2 2

1. Summary 2 2

2. Background 4 4

3. Overview of Plan Requirements and Commission Approach 8 8

3.1. Overview of Plan Requirements 8 8

3.2. Overview of Commission Approach 11 11

4. Issues Common to All Plans 13 13

4.1. Buyer-Directed Economic Curtailment 13 13

4.1.1. Pre-2011 Contract Interpretation 14 14

4.1.2. 2011 Pro Forma Contracts 16 16

4.1.3. Fully Deliverable 20 20

4.2. Integration Cost Adders 22 22

4.3. TRECs 24 24

4.4. Sunrise/Imperial Valley Remedial Measures 24 24

4.5. CAISO Standard Capacity Product 26 26

4.6. Pilot Program for Preapproval of Short-Term Contracts 28 28

4.7. Plan Organization and Standardization 33 33

4.8. Other Updates 35 35

4.9. MJU Supplemental Filing Date 36 36

4.10. Non-Disclosure Agreement 37 37

5. Limited Issues Specific to a Plan 39 39

5.1. PG&E 40 40

5.2. SCE 40 40

5.2.1. Modifications to Project Viability Calculator 40 40

5.2.2. Credit and Collateral Provisions 42 42

5.2.3. Shortlist Requirement (Interconnection Studies) 44 44

5.2.4. Other 46 46

5.3. SDG&E 46 46

5.3.1. TOD Factors 46 46

5.3.2. Other 47 47

5.4. PacifiCorp 48 48

5.5. Sierra (CalPeco) 49 49

6. Schedule for 2011 Solicitations and Organization of 2012 Plans 50 50

6.1. Schedule for 2011 Solicitation 50 50

6.2. Organization of 2012 Plans and IRPs 51 51

7. Additional Resources 53 53

8. Comments on Proposed Decision 55 55

9. Assignment of Proceeding 56 56

Findings of Fact 56 56

Conclusions of Law 59 59

ORDER 64 64

Appendix A: Summary of Key Items

Appendix B: Adopted Schedule for 2011 Solicitation

Appendix C: Links to Draft 2011 Procurement Plans
and Supplements to Integrated Resource Plans
for Renewables Portfolio Standard Program

Appendix D: Summary of Changes Proposed by IOUs in 2011 Plans

DECISION CONDITIONALLY ACCEPTING 2011
RENEWABLES PORTFOLIO STANDARD PROCUREMENT PLANS
AND INTEGRATED RESOURCE PLAN SUPPLEMENTS

1. Summary

The California Renewables Portfolio Standard (RPS) Program requires that each California electric utility procure, with limited exceptions, an annual minimum quantity of electricity generated from eligible facilities powered by renewable energy resources, with the quantity increasing at least 1% each year and reaching 20% by 2010. To fulfill this requirement, Southern California Edison Company (SCE), Pacific Gas and Electric Company (PG&E), and San Diego Gas & Electric Company (SDG&E) must each prepare an RPS procurement plan (Plan), and update that Plan when directed by the Commission. The Commission is required to review and accept, modify or reject each Plan before commencement of renewables procurement. California Pacific Electric Company, LLC (CalPeco, previously Sierra Pacific Power Company) and PacifiCorp must each file a biennial Integrated Resource Plan (IRP), along with limited supplemental information. In years in which an IRP is not filed, CalPeco and PacifiCorp must each file more comprehensive Supplements. The Commission reviews each IRP and Supplement.

In this decision, we conditionally accept the recent Plans filed by SCE, PG&E, and SDG&E. We also review the Supplements to IRPs filed by CalPeco and PacifiCorp. Important steps we take include:

1. Economic Curtailment: Direct that each utility include provisions for buyer-directed economic curtailment in its Final 2011 Plan.

2. Tradable Renewable Energy Credits: Require that each utility include its intended use of tradable renewable energy credits in its Final 2011 Plan.

3. Other Updates: Direct that each utility include use of recently adopted procurement tools in its Final 2011 Plan.

4. Modify Non-Disclosure Agreements: Require that each utility modify its non-disclosure agreement or confidentiality provisions to permit discussion by not only utilities but also bidders/sellers of the bidding and negotiating process with the Commission and certain others.

5. Schedule: Adopt a schedule for the 2011 solicitation, and a process for initiating the next solicitation.

SCE, PG&E, and SDG&E shall each, within 14 days of the date this order is mailed, file and serve a Final 2011 Plan, with a copy also filed on the Director of the Commission's Energy Division. Each utility shall proceed to use its Final Plan for its RPS program and current solicitation, unless the Final Plan is suspended by the Executive Director or Energy Division Director within 21 days of the date this order is mailed. CalPeco and PacifiCorp shall each continue to use its IRP and Supplement. A more comprehensive summary of requirements for the Final Plans and future Supplements is in Appendix A. The solicitation schedule is in Appendix B.

We continue to employ the presumption that each utility may apply its own reasonable business judgment in running its solicitation, within the parameters we establish and the guidance we provide. Utilities ultimately remain responsible for program implementation, administration and success, within application of flexible compliance criteria. We will later judge the extent of that success, including the degree to which each utility implements Commission orders, elects to take Commission guidance, demonstrates creativity and vigor in program administration and execution, and reaches program targets, goals and requirements. This proceeding remains open.