8. Assignment of Proceeding

Mark J. Ferron is the assigned Commissioner and Jean Vieth is the assigned ALJ in this proceeding.

1. Though the active parties filed their settlement some four months after hearings, they remained in regular contact with the ALJ, sought timely modifications of the established schedule, and diligently pursued negotiations on the complex issues this application raises.

2. The four active parties - SDG&E, Rim Rock, DRA and TURN - all sponsor the settlement. While the two other parties, WPTF and IEP, are not settlement signatories, they have not opposed the settlement and in fact, have participated only minimally after obtaining party status.

3. SDG&E and Rim Rock represent, respectively, the purchasing utility and RPS developer interests in the current PPA and in the amendments to the PPA which the settlement proposes. DRA and TURN represent the interests of utility consumers and ratepayers and both are well-situated to assess the myriad policy ramifications of the settlement on those interests.

4. The settlement expeditiously resolves issues that were litigated vigorously at hearing and which most assuredly would have been litigated further.

5. Each party was represented by experienced counsel and the settlement is the product of arms-length negotiations.

6. There is no evidence that the settlement process was not conducted in full compliance with Article 12 of the Rules.

7. The settlement is comprehensive; it includes specific provisions designed to address DRA's and TURN's well-developed objections, while authorizing SDG&E and Rim Rock to proceed with a less expansive, less expensive (and less risky) plan for a tax equity investment in the project. In particular, the settlement ensures oversight at a critical implementation stage by establishing a process that enables DRA and TURN to review the Base Case Model, including the material inputs used to calculate the final green attributes price.

8. Two parallel provisions, Appendix 1, §2 (g)(ii) and (iii), appear to delegate to the parties the ability to negotiate an increase in SDG&E's rate of return without setting any criteria for such a change and without requiring Commission review or approval of the change. Whether or not this is legal, it is not good public policy.

9. Approval of the settlement should be conditioned upon the following: should all parties agree to an increase in SDG&E's rate of return under Appendix 1, § 2(g)(ii) and (iii), they must file a petition to modify today's decision that meets the requirements of Rule 16.4. As so conditioned, the settlement is reasonable.

10. TURN no longer seeks admission in evidence of the document identified as Exhibit 151-CCC.

1. The active parties having established good cause, Rule 12.1(a) should be waived. Accordingly, the settlement has been properly filed.

2. The settlement is an uncontested, all-party settlement.

3. The four active parties fairly represent the affected interests.

4. If the settlement is conditioned to require Commission approval in accordance with Rule 16.4 of any increase in SDG&E's rate of return under Appendix 1, § 2(g)(ii) and (iii), our legal concerns about these provisions is mitigated. With this condition, the settlement should be approved.

5. The parties should be afforded an opportunity to make an election to accept the Commission's conditioned approval of the settlement, pursuant to Rule 12.4(c).

6. SDG&E and Rim Rock have met the burden or proof to show that the information redacted from the settlement, as well as all of the revised transaction documents in Attachment A to the settlement, meet the confidentiality requirements for protection under the IOU Matrix. The joint motion of SDG&E and Rim Rock to file that information and those documents under seal should be approved.

7. TURN's motion to receive in evidence the document identified as Exhibit 151-CCC is moot. The ALJ should destroy the copy tendered at hearing and should not lodge it in the formal file.

8. In order to provide certainty and to avoid impairing the valid business interests of the parties, this decision should be effective today.

ORDER

IT IS ORDERED that:

1. Subject to the following condition, The Joint Motion of San Diego Gas & Electric Company (SDG&E), Naturener Rim Rock Wind Energy, LLC, Division of Ratepayer Advocates, and the Utility Reform Network for Approval of Settlement Agreement (settlement), filed April 8, 2011, is granted and the settlement, the public version of which is attached to this decision as Appendix 1, is approved: if all parties agree to an increase in SDG&E's rate of return as provided in § 2 (g)(ii) and (iii) of the settlement, they then must file a petition to modify this decision that meets the requirements of Rule 16.4 of the Commission's Rules of Practice and Procedure and the rate of return increase shall not become effective except upon the Commission's approval of the petition for modification.

2. The April 8, 2011, Joint Motion of San Diego Gas & Electric Company (SDG&E) and NaturEner Rim Rock Wind Energy, LLC (Rim Rock), For Leave to File Confidential Materials Under Seal is granted and the information redacted from the settlement and from Exhibit A to the settlement is filed under seal .

(a) The confidential information placed under seal pursuant to this ruling shall remain sealed for the period provided by the Investor-Owned Utility (IOU) Matrix and shall not be made accessible or be disclosed to anyone other than Commission staff except upon the further order or ruling of the Commission, the assigned Commissioner, the assigned Administrative Law Judge (ALJ), or the ALJ then designated as Law and Motion Judge, which order shall be entered only after notice to SDG&E and Rim Rock (or its successor), and an opportunity to be heard.

(b) If SDG&E or Rim Rock, as applicable, believes that the confidential information placed under seal pursuant to this ruling should be granted protection beyond the period provided by the IOU Matrix, SDG&E or Rim Rock (or its successor) may file a motion stating the justification for further withholding the material from public inspection or for such other relief as the Commission Rules may then provide. The motion shall be filed no later than 45 days before the expiration of the relevant time period.

3. The Utility Reform Network's oral motion to receive in evidence the document identified at hearing as Exhibit 151-CCC is moot. The assigned Administrative Law Judge shall destroy the copy of Exhibit 151-CCC tendered at hearing and shall not lodge it in the formal file.

4. Application 10-07-017 is closed.

This order is effective today.

Dated July 14, 2011, at San Francisco, California.

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