3. Preliminary Scoping Memo

In this Preliminary Scoping Memo, we briefly describe the issues to be considered in this proceeding. The timetable is set forth in Section 5 of this order.

3.1. Local Capacity Requirements (LCRs)

D.06-06-064 determined that a study of local electric capacity requirements performed by the CAISO would form the basis for this Commission's RA Program. Establishing local procurement obligations for the first time, the Commission stated that the CAISO's LCR study:

. . . is the foundation for our establishment of local procurement obligations, the costs of which are borne by the [load-serving-entities (LSEs)] and their retail customers. Therefore, this Commission must be reasonably assured that the LCRs it uses to establish those procurement obligations are reasonable. This requires consideration of the LCR study process as well as the study outcomes." (D.06-06-064 at 13.)

As noted above, the Commission has found that there is a need for an annual proceeding to review the LCRs determined in the CAISO's study of local area needs. This proceeding is designated for this purpose, beginning with the LCR study for 2013. This proceeding is also designated as the Commission's forum for considering how the LCR study process, parameters, methods, and assumptions might be improved over time.

3.2. Local Procurement Obligations

Upon reviewing the annual LCR study, the Commission uses the approved LCRs to establish local procurement obligations that are to be met by Commission-jurisdictional LSEs for the applicable compliance period. In the past, this has involved such topics as whether local areas should be aggregated, the extent to which LSE procurement obligations should be adjusted or waived for local areas with CAISO-identified resource deficiencies, and the reliability criteria targeted through procurement obligations. These, and other issues whose resolution is necessary for establishing local procurement obligations, may be taken up in this proceeding.

3.3. Refinement of RA Program Elements

RA program refinement topics for 2013 and 2014 are preliminarily listed in Appendix A. These include the following, subject to final determination by the assigned Commissioner in the scoping memo:

· Issues that were referred to this rulemaking byD.11-10-003, regarding RA for demand response resources;

· _ssues deferred to this proceeding by D.11-06-022, the Commission's decision regarding 2012 LCRs and refining the RA program;

· Issues deferred to this proceeding by a September 7, 2011 Ruling in R.09-10-032;

· Any issue that is explicitly or implicitly referred to this proceeding by an order issued in another proceeding during the course of this proceeding;

· Issues proposed by our Energy Division and by parties in initial comments called for by this ruling that the assigned Commissioner deems appropriate for inclusion in this proceeding; and

· Related matters as determined by the assigned Commissioner's scoping memo.

While it is a straightforward matter to define the purpose of this proceeding, we do not attempt to draw a bright line separating refinements to the existing program from the fundamental program changes that are beyond the scope of the proceeding. Instead, the final determination of specific topics to be addressed will be left to the assigned Commissioner's discretion in the scoping memo.