3. Elimination of the CAM Election Process
Under D.06-07-029, the utilities are the entities responsible for procuring new generation through long-term power purchase agreements (PPAs).3 Commission approval for such new system resource contracts typically included an order that the utilities "shall make an election at the time they seek contract approval...whether or not they intend that the [CAM] should apply to the contract."4
The language of SB 695 expressly requires that the Commission "shall ensure that," under certain conditions, the net capacity costs of the specified generation resources "are allocated on a fully nonbypassable basis" to bundled utility customers, direct access customers, and community choice aggregation customers.5 This language is mandatory, and does not provide for or allow for an election.
As TURN describes it, "SB 695 removes the right [for the utility] to elect or not elect CAM treatment for a resource that meets the condition of the statutes...,"6 and that "either the Commission finds that the statutory conditions have been met and the cost-and-benefit allocation applies, or it doesn't."7
In short, there is no longer an election or choice whether to apply the CAM. If the statutorily-specified conditions are met, then the CAM applies. Those conditions require that the Commission make a determination that the generation resources in question "are needed to meet system or local area reliability needs for the benefit of all customers in the electrical corporation's distribution service territory." The criteria that the Commission will use in making this determination will be developed later in this or a successor proceeding.
3 D.06-07-029 Conclusion of Law 7.
4 Id., Conclusion of Law 6.
5 Section 365.1(c)(2).
6 TURN October 1st 2010 Comments at 7.
7 TURN October 8th 2010 Comments at 2.
