Discussion

At the core of this issue is the possibility of cost shifting between customers because of the dates specified in the April 2011 Petition as it relates to the CHP procurement contract length terms as a result of the QF/CHP Program adopted in D.10-12-035. The modifications to the QF/CHP Settlement, as requested in both the April 2011 and the July 2011 Petitions, is to establish limits for recovery of certain costs from MDL customers. In D.11-07-010, the Commission found that "[c]onsistent with D.08-09-012 and our overall guiding principles for resolving [non-bypassable charges (`NBCs`)] implementation issues, the proposed changes clarify that MDL Customers would not pay any NBCs related to new generation resources [associated with the QF/CHP Settlement] that were not procured on their behalf."¹⁸ Essentially, the modifications to D.10-12-035 sought by the April 2011 Petition and adopted in D.11-07-010 ensure that the NBCs associated with the initial program period would be better defined for MDL customers.

The Joint Petitioners seek modification of D.11-07-010 because, they assert, the two specified paragraphs and two Conclusions of Law contain factual and legal errors.¹⁹ Based on the additional context provided by July 2011 Petition, we agree that no cost-shifting will occur between customers as a result of the procurement conducted in the QF/CHP program by the inclusion of the dates as proposed in the April 2011 Petition and as adopted in D.11-07-010. We agree that the dates specified in D.11-07-010 with respect to cost allocation correspond to the dates of the term lengths of various procurement options adopted in D.10-12-035, and that the existence of dates does not create the opportunity for cost shifting beyond those specified times.

The Joint Respondents argue that if there is no possibility of cost shifting, then there should be no harm in denying the July 2011 Petition and not removing the language from D.11-07-010. However, we are convinced by the arguments made by the Joint Petitioners in their reply that removal of the language will provide additional certainty and clarity in future proceedings.

We are also persuaded by the argument that, if the language were to remain, uncertainty would remain about the future of the QF/CHP settlement as adopted in D.10-12-035. On balance, the contested language may or may not²⁰ cause direct harm, but it does create additional uncertainty and delay in the establishment of the QF/CHP Settlement. Based on the clarifications made by the Joint Petitioners about how the specified dates²¹ do not create the possibility of cost shifting, we find that removing the specified language provides additional regulatory certainty. The Joint Petitioners state in their opening comments on the proposed decision that in the event that these date limitations becomes unsynchronized with the dates of the program periods adopted in D.10-12-035, the Commission can at that time allocate costs consistent with the public utilities code and assure that costs are not shifted onto DA and CCA customers. We agree. Given these reasons, we find it reasonable to grant the Joint Petitioners request to remove the specified language referenced above from D.11-07-010.

The Joint Petitioners also seek deletion of the specified paragraphs because "CHP projects and developers are not lawfully subject to Commission jurisdiction on cost allocation"²² as determined in D.11-07-010. The Joint Respondents state that this need not be the case "if the settling parties agree amongst themselves"²³ to something different. Because we remove the language, the jurisdictional issue is also removed.

¹⁸ D.11-07-010 at 7.

¹⁹ Since assertions of legal error should be raised via applications for rehearing and not petitions for modification, we focus on the factual assertions made by the Joint Petitioners.

²⁰ In particular, we note that COL 3 from D.11-07-010 is a simple statement. Without the context of the rest of the contested language, COL 3 is most likely innocuous.

²¹ We acknowledge that any future changes to the QF/CHP Program, as adopted D.10-12-035 and modified by D.11-07-010, specifically the Settlement periods and/or the term length of the contracts, may also require a corresponding change to the cost-allocation portion of the program, in order to continue to ensure that no cost shifting occurs.

²² July 2011 Petition at 7.

²³ Response of Joint Respondents at 5.