D0401050 Final Dec on Procurement Interim Opinion

II. Procedural History

On October 29, 2001, the Commission opened this proceeding to establish the necessary operating procedures and ratemaking mechanisms for the utilities to resume full procurement responsibilities by January 1, 2003. In a series of decisions between August and December 2002, we allocated the existing DWR contracts to each utility, established requirements for the procurement of renewable resources, established cost recovery mechanisms, and adopted short-term procurement plans under which the utilities operate through December 31, 2003.⁴

This decision addresses the long-term procurement planning issues set for further hearing last year in Section X.B. of D.02-10-062.⁵ These issues were further delineated at the prehearing conferences (PHC) on February 18, 2003, March 7, 2003, and July 16, 2003. The evidentiary hearings were held from July 21, 2003 through August 18, 2003. Opening briefs were filed on September 15, 2003 and reply briefs were filed on September 22, 2003.⁶

Parties who participated actively in the review of the utilities' long-term plans and 2004 short-term plans are the respondent utilities, Alliance for Retail Energy Markets and the Western Power Trading Forum (ArM/WPTF), the California Cogeneration Council (CCC), California Consumer Power and Conservation Financing Authority (CPA), California Energy Commission (CEC), The California Independent System Operator (ISO), The Cogeneration Association of California and The Energy Producers and Users Coalition (CAC/EPUC), the City of Chula Vista, the City of San Diego, the Independent Energy Producers Association (IEP), The Joint Parties Interested in Distributed Generation/Distributed Energy Resources (Joint Parties), the Natural Resources Defense Council (NRDC), the Navajo Nation, the Office of Ratepayer Advocates (ORA), Save Southwest Riverside County (SSRC), and TURN.⁷

Implementation of Senate Bill (SB) 1078 and SB 1038 legislation on the Renewable Portfolio Standard (RPS) has occurred through a separate workshop process. D.03-06-071 addressed the RPS issues needing to be decided by June 30, 2003 and directed that a new docket be opened to continue with implementation requirements.

Other proceedings that address programs and policies for specific types of resources are: Rulemaking (R.) 01-08-028 for energy efficiency; R.02-06-001 for demand response; and R.99-10-025 and R.98-07-037 for distributed generation (DG). We anticipate shortly opening a rulemaking to streamline the transmission planning process for the utilities in a manner that upholds environmental standards, meets the Commission's statutory obligations under Pub. Util. Code § 1001, and ensures consumer benefits. An OIR to establish policies, procedures, and incentive mechanisms regarding DG and Distributed Energy Resources will be forthcoming.

The utilities' procurement plans bring together the policies developed in each of the above proceedings into an integrated resource planning framework.

⁴ The key decisions for allocation of DWR contracts are: D.02-09-053, allocation of existing contracts to each utility; D.02-12-069, adoption of Operating Order between DWR and each utility; and D.03-04-029, adoption of Operating Agreements between DWR and PG&E and SDG&E. Interim procurement authority was authorized for the utilities in D.02-08-071; in D.02-10-062 we adopted the regulatory framework under which the utilities would resume full procurement; and in D.02-12-074 we approved the short-term procurement plans for each utility and set a framework for addressing renewable resources procurement. ⁵ In D.03-12-062, the Commission addressed the hearing issues needing resolution prior to January 1, 2004. ⁶ Before the Commission in a separate application, A.03-07-032, is SCE's July 21, 2003 Application for Approval of a Purchase Power Agreement with the Mountainview Power Company, LLC. On October 7, 2003, SDG&E filed a motion in this proceeding for approval to enter into new contracts resulting from its Grid Reliability Capacity Request for Proposals; a separate schedule to consider this motion was set at the October 31, 2003 PHC. ⁷ The Navajo Nation's August 18, 2003 motion to intervene should be granted.