IV. Disclosing the MPR

SB 1078 set forth specific procedural requirements regarding how and when actual MPRs will be calculated and disclosed. Pub. Util. Code § 399.14(a)(2)(A) states:

"A process for determining market prices pursuant to subdivision (c) of Section 399.15. The commission shall make specific determinations of market prices after the closing date of a competitive solicitation conducted by an electrical corporation for eligible renewable energy resources. In order to ensure that the market price established by the commission pursuant to subdivision (c) of Section 399.15 does not influence the amount of a bid submitted through the competitive solicitation in a manner that would increase the amount ratepayers are obligated to pay for renewable energy, and in order to ensure that the bid price does not influence the establishment of the market price, the electrical corporation shall not transmit or share the results of any competitive solicitation for eligible renewable energy resources until the commission has established market prices pursuant to subdivision (c) of Section 399.15."

Under these requirements, the Commission must calculate actual MPRs after the closing date of a competitive solicitation, but before the utilities transmit or share the results of any competitive solicitation with the Commission.

1. When Actual MPRs are Disclosed

In order to implement these requirements, the Commission must clearly define the term "closing date of a competitive solicitation." A strict interpretation of this closing date would clearly be the date and time at which all bids are due. A more pragmatic interpretation might allow for some negotiation time subsequent to the bid close date. CalWEA/CBEA, CEERT, SCE, SDG&E, and TURN have indicated that the utilities and the short-listed bidders should have some time to negotiate deals after bidding closes. In contrast, PG&E suggested that the Commission disclose MPRs the day after the bid close date.

The Commission must also specify exactly what it means for utilities to "transmit or share the results of any competitive solicitation with the Commission." During the second day of MPR workshops, parties discussed whether actual MPRs should be disclosed publicly to everyone at the same time, or if MPRs should be simultaneously disclosed only to the utilities, their short-listed bidders, and to their Procurement Review Groups (PRGs). In their April 30, 2004 comments, CalWEA/CBEA, CEERT, SCE, SDG&E, and TURN recommended that MPRs should be publicly disclosed to everyone at some point between (1) the close of bidding (allowing for some subsequent negotiation time) and (2) the filing of a utility advice letter requesting contract approval.

The "closing date of a competitive solicitation" will be the date set forth in a utility's bid solicitation protocol. To ensure the availability of Commission staff to evaluate the results of a renewable solicitation, we intend to calculate and disclose the MPR by Joint Assigned Commissioner and ALJ Ruling before the utility tenders its tentative short list of prospective sellers to the PRG for review. We interpret the "transmit or share" requirement to mean that the utilities cannot formally or informally (through applications, advice letters, or discussions with the PRG, etc.) disclose to or otherwise inform the Commission of the results of any competitive solicitation for eligible renewable energy resources prior to the Commission disclosing actual MPRs.

Therefore, we conclude that the MPRs should be publicly and simultaneously disclosed to all parties after bidding has closed, but before completion of the utility's final short list. The MPR will be available to parties before negotiations are complete, to allow additions to the tentative short list, and the informed negotiation of payment streams. In order to implement this approach, each utility must notify the Commission via letter to the Executive Director that bidding has concluded, and that the utility expects to complete its tentative short list by a specified date. The Commission will coordinate the public and simultaneous disclosure of the MPR to all parties with this information in mind. After the parties have negotiated and finalized their bids based on subsequent release of the MPR, each utility will submit its final short list of bidders to the Commission staff and its PRG.

2. How Actual MPRs are Calculated and Disclosed

Once the Commission adopts an MPR methodology, actual MPRs must be calculated at the appropriate time for each RPS solicitation, as described above. To provide clarity to all parties and to Energy Division staff, we outline the process for calculating and disclosing actual MPRs. After the closing date of a competitive solicitation, Energy Division staff shall be prepared to run a model capable of calculating actual MPRs that is compliant with the MPR methodology adopted in this decision. During the course of these calculations, staff shall not disclose draft calculations to the public, any outside parties, or to any of the utility PRGs. Energy Division staff may obtain any necessary input data from outside sources. In order to ensure the best available data, Energy Division staff may also, at its discretion, retain any necessary consulting services (as its budget may allow) to determine appropriate modeling input values. Energy Division staff shall not disclose its entire working data set to any outside consultant.

CEERT, SDG&E, and TURN recommend that MPRs be disclosed via ALJ Ruling. SCE recommends that the Commission issue a formal decision approving actual MPRs. PG&E does not define a precise vehicle and simply states that the "CPUC advises the procuring utility of the MPR."

In order to provide a timely response and allow the solicitation process to move forward, we order that actual MPRs will be disclosed by Ruling, but we will make it a Joint Assigned Commissioner and ALJ Ruling.²¹ Final approval of contracts, incorporating the underlying MPR, will be by Commission Decision.