ALJ/PVA/lil Date of Issuance 4/24/2012

Decision 12-04-046 April 19, 2012

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Order Instituting Rulemaking to Integrate and Refine Procurement Policies and Consider Long-Term Procurement Plans.

Rulemaking 10-05-006
(Filed May 6, 2010)

DECISION ON SYSTEM TRACK I AND RULES TRACK III
OF THE LONG-TERM PROCUREMENT PLAN PROCEEDING
AND APPROVING SETTLEMENT

DECISION ON SYSTEM TRACK I AND RULES TRACK III
OF THE LONG-TERM PROCUREMENT PLAN PROCEEDING
AND APPROVING SETTLEMENT 1 1

Summary 2 2

1. Background 2 2

2. System Track I 5 5

2.1. Proposed Settlement 5 5

2.2. SDG&E Local Reliability 13 13

2.3. Calpine 13 13

3. Rules Track III 17 17

3.1. Once-Through Cooling 17 17

3.2. SCE Generation Auction Proposal 27 27

3.3. UOG v. PPA 28 28

3.4. Utility RFO Timelines 39 39

3.5. Greenhouse Gas Product Procurement 40 40

3.6. IEP Motion 59 59

3.7. Rulebook 62 62

4. Comments on Proposed Decision 68 68

5. Assignment of Proceeding 69 69

Findings of Fact 69 69

Conclusions of Law 71 71

ORDER 72 72

APPENDIX 1

DECISION ON SYSTEM TRACK I AND RULES TRACK III
OF THE LONG-TERM PROCUREMENT PLAN PROCEEDING
AND APPROVING SETTLEMENT

Summary

This decision addresses issues in System Track I and Rules Track III of the Long Term Procurement Plan Rulemaking. Many potential issues in System Track I are resolved, or at least deferred, by a proposed settlement supported by most of the parties. We approve the proposed settlement, and address one other System Track I issue not resolved by the settlement: a proposal by Calpine Corporation for utility solicitations aimed at existing power plants operating without contracts. A second System Track I issue, relating to local reliability requirements in the San Diego Gas & Electric service territory, was moved to Application 11-05-023.

In addition, this decision addresses a number of Rules Track III issues, specifically: procurement rules relating to power plants using once-through cooling, a proposal from Southern California Edison for a new generation auction, refinements to evaluating bids where utility-owned generation and independent generation are competing, utility procurement of greenhouse gas related products, a request from the Independent Energy Producers relating to generator recovery of greenhouse gas compliance costs, and general procurement oversight rules.