III. Comments on Draft Decision

The draft decision of the assigned ALJ was mailed to the parties in this proceeding in accordance with Section 311(g)(1) and Rule 77.7 of the Rules of Practice and Procedure. Comments and/or reply comments were filed by PG&E, CalWEA, SDG&E, CEERT, and TURN. Two issues were raised in comments that merit attention here.

In their initial comments, CalWEA and TURN raise concerns regarding the draft decision's suggested method of allowing project developers to collaborate and potentially share the cost of gen-tie facilities needed to deliver their power. TURN is concerned that the proposed method of requiring the utilities to post the name, project location, and first point of interconnection of project on the web raises issues of confidentiality. Both parties are concerned that the subsequent opportunities for renegotiation of bids will unfairly advantage certain bidders over others, and risk harm to ratepayers. While we believe it would be feasible to design a system that would overcome these concerns, we note the urgency of establishing a clear method of bid evaluation in advance of the pending RPS solicitations.

TURN's alternative proposal is workable, and we adopt it. Under this approach, each bidder may at its option list its estimated gen-tie costs separately, and the utility will make iterative adjustments to its bid ranking to account for sharing of these costs among those bidders who are selected. While we recognize the extra analytic burden this requirement places on the utilities, they are directed to make their best efforts to find these cost-sharing opportunities, which, to the extent they can be captured, will result in lower costs to ratepayers. The utilities should present the results of this analysis to their Procurement Review Groups for review.

CalWEA also notes an inconsistency between the draft decision's discussion of network benefits and the language of D.03-06-071. D.03-06-071 stated the following (p.36):

It is conceivable that the addition of renewable generation to the grid may result in network benefits, and bidders are encouraged to describe any such potential benefits in their responses...The utilities should make it known in their annual plans that such benefits are sought, should apply transparent criteria in evaluating such claims, and should present the results of these evaluations to their PRGs for consideration."⁷

CalWEA notes that the word "should" has changed to "may" in the draft decision's discussion of how the utility will consider possible network benefits. While we recognize that the Commission has not yet developed a methodology for considering network benefits, we do not want to eliminate the possibility that such benefits could be made evident in the course of evaluating particular RPS bids. We do not want to miss clear-cut opportunities to benefit the network via the addition of particular renewable energy resources. Accordingly, we direct the utilities to develop consistent, logical approaches to assessing these potential benefits, to the level of detail that is feasible over the course of this year's RPS solicitation. This evaluation process should be transparent to the utility's Procurement Review Group and to the Commission. We modify the language in the draft decision and Appendix to reflect this change.