6. Additional Modifications to the CREST PPA

In response to comments and reply comments to the proposed decision, parties raised several issuing deserving clarification in today's decision. As a result, we clarify the following issues: (1) the execution date of the PPA, (2) curtailment under the PPA, and (3) collateral requirements.

6.1. Execution Date of the CREST PPA for Purposes of Determining Rate

In comments, Clean Coalition notes that clarification of the execution date of the CREST PPA is needed for proper application of the contract modifications adopted herein, such as the modifications to Section 2.8, Date of Initial Operation. SCE agreed.

We briefly addressed the term execution date in D.07-07-027. In that decision, we found that "Execution of the contract here means when signed by the customer, since this is a standard contract made available by the utility."17 Furthermore, in that decision, Conclusion of Law 15 states: "The tariff/standard contract should specify that the applicable table of rates is determined by the date of contract execution."18

We clarify today that, in the above statement, we use the term "execution" to mean the date the rate is determined, which currently is the MPR. The term "execution" does not have the same meaning as Effective Date.

In comments to the proposed decision, SCE notes that the CREST PPA, as modified herein, does not clearly provide for curtailment in the case of a system emergency. SCE does note, however, that its interconnection tariffs do provide for curtailment in the case of a system emergency. SCE suggests that now is the appropriate time to clarify this issue. Because this matter involves reliability of the electric system, we agree that now is the appropriate time to clarify this matter. In reply comments, Silverado Power LLC and SunEdison LLC agreed with the need for clarification regarding curtailment.

For curtailment during an emergency, a potential exists for disputes to arise without clear provisions governing the producer's obligation to curtail under the California Independent System Operator's (CAISO) or interconnecting utility's tariffs under which the producer has obtained its interconnection rights. The CREST PPA is not clear about how such emergency curtailment should work, under exactly what circumstances it is allowed, and who bears the economic costs when it occurs. By detailing as many of those issues from the outset, all parties are more likely to avoid such disputes. Below we adopt language that represents a simplified version of the language regarding curtailment adopted in D.11-04-030 (decision conditionally accepting 2011 RPS Procurement Plans).

Accordingly, within 10 days of the effective date of this decision, SCE shall file a Tier 1 advice letter, effective immediately, making the following changes to the CREST PPA regarding curtailment, with non-substantive changes as needed to align internal references.

CURTAILMENT

1. Producer shall promptly curtail the production of the Generating Facility: (i) upon Notice from SCE that SCE has been instructed by the CAISO or the Transmission Provider to curtail energy deliveries; (ii) upon Notice that Producer has been given a curtailment order or similar instruction in order to respond to an Emergency; (iii) if no Schedule was awarded in either the Day-Ahead Market or the Real-Time Market; or (iv) if SCE issues an OSGC Order.

2. For each day of the Term, if no Schedule is awarded for the Forecasted energy in both the Day-Ahead Market and Real-Time Market for such day, and the Generating Facility has not been curtailed pursuant to Section 1(i), (ii) or (iii), then, so long as Producer's actual availability establishes that the Generating Facility would have been able to deliver but for the fact a Schedule was not awarded, SCE shall pay Producer the Product Price, as adjusted by Exhibit G, for the amount of energy Producer would have been able to deliver but for the fact that Producer did not receive a Schedule. The amount of energy that could have been delivered will be determined in accordance with Section 4.

3. If SCE bids the energy from the Generating Facility into the Day-Ahead Market or Real-Time Market and the CAISO awards a Schedule as a result of that bid, SCE shall have the right, but not the obligation, to order Producer to curtail the delivery of energy (an "Over-Schedule Generation Curtailment Order" or "OSGC Order") in excess of a Schedule awarded pursuant to this Section 3 (the "Over-Schedule Generation Curtailment Quantity" or "OSGC Quantity"). SCE shall pay Producer the Product Price, as adjusted by Exhibit G, for the OSGC Quantity Producer would have been able to deliver but for the fact that SCE issued an OSGC Order. The amount of energy that could have been delivered will be determined in accordance with Section 4.

4. SCE shall estimate the amount of energy the Generating Facility would have been able to deliver under Sections 2 and 3. SCE shall apply accepted industry standards in making such an estimate and take into consideration the actual availability of the Photovoltaic Modules, past performance of the Generating Facility, meteorological data, solar irradiance data, and any other relevant information. Producer shall cooperate with SCE's requests for information associated with any estimate made hereunder. SCE's estimates under this Section 4 for the amount of energy that the Generating Facility would have been able to deliver under Sections 2 and 3 will be determined in SCE's sole discretion.

In comments to the proposed decision, SCE notes that now would be an appropriate time to include a project collateral requirement, which is designed to ensure the viability of contracted projects and to more adequately mitigate costs to customers in the event SCE's contracts fail to deliver. SunEdison agreed with this recommendation.

We agree that, given the possibility that new contracts may be entered into based on the contract modification made by this decision, that now is the appropriate time to consider including a project collateral requirement. A project collateral requirement performs the function of dissuading parties with non-viable projects from occupying a spot in the program that a more viable project could otherwise fill. Given the limited nature of this program, we do not seek to encourage otherwise non-viable project. The collateral requirement would function as a development security deposited with SCE until the project meets commercial operation. To achieve these goals, SCE suggestion a collateral requirement of $50/kW. SunEdison points out that we adopted a lower amount in D.10-12-048 (Decision Adopting Renewable Auction Mechanism) for projects less than 5 MW. We adopt a lower amount consistent with D.10-12-048 and the provision in the 2010 SPVP of $20/kW. The below noted language from the 2010 SPVP is adopted.

Accordingly, within 10 days of the effective date of this decision, SCE shall file a Tier 1 advice letter, effective immediately, making the following changes to the CREST PPA including a collateral requirement of $20/kW, with non-substantive changes as needed to align internal references.

4. DEVELOPMENT SECURITY

4.1. On or before the thirtieth (30th day following the Effective Date, Producer shall post and thereafter maintain a development fee (the "Development Security") equal to twenty dollars ($20) for each kilowatt of the Gross Power Rating. The Development Security will be held by SCE and must be in the form of either a cash deposit or the Letter of Credit. If Producer establishes the Development Security in the form of a cash deposit, SCE shall make monthly Simple Interest Payments to Producer in accordance with the terms of this Agreement.

4.2. If, on or before the Term Start Date, Producer:

4.2.1. Demonstrates to SCE's satisfaction that Producer has installed all of the equipment or devices necessary for the Generating Facility to satisfy the Gross Power Rating of such Generating Facility, SCE shall return the Development Security to Producer within thirty (30) days of the Term Start Date;

4.2.2. Has not installed any of the equipment or devices necessary for any Generating Facility to satisfy any of the Gross Power Rating, Producer shall forfeit, and SCE shall have the right to retain, the entire Development Security and terminate this Agreement; or

4.2.3. Has installed only a portion of the equipment or devices necessary for a Generating Facility to satisfy the Gross Power Rating of such Generating Facility, SCE shall return, within thirty (30) days of the Term Start Date, only the portion of the Development Security equal to the product of twenty dollars ($20) per kW DC of the portion of the Gross Power Rating available to deliver the Product to SCE at the Delivery Point. This Section 4.2 is subject to Producer's right to extend the Term Start Date as a result of a Force Majeure as to which Producer is the Claiming Party (subject to Section 9.4).

17 D.07-07-027 at 12.

18 D.07-07-027 at 59.

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