IV. Manner of ESP and CCA Participation in RPS Program
Now that we have established the issues on which we believe the ESPs, CCAs, and small and multi-jurisdictional utilities should be subject to the same terms and conditions as the large utilities, we turn to our task of determining the manner in which these entities should participate in the RPS program.
We approach this question as an issue of policy. ESPs and CCAs each are subject to separate and distinct legal and regulatory requirements. Although they are each subject to certain requirements of this Commission as assigned by the Legislature, neither is regulated as a "public utility" as defined by the Public Utilities Code, nor are they subject to Commission regulatory authority as a matter of course. Instead, the Commission is granted specific regulatory authority over these entities for particular issues, in this case, RPS. Because of this, each of these entities in existence or planned operates under a business model that is different from a regulated public utility.
For example, as AReM argues, this Commission does not set rates or rates of return for ESPs, or review their overall procurement plans, and ESPs are currently limited in their ability to sign up new customers. Likewise, there is merit to Los Angeles and Chula Vista's fundamental point that CCAs are more akin to local publicly-owned utilities than they are to the investor-owned utilities.7
This Commission has less overall control over how ESPs and CCAs operate than we do over how utilities operate. Also, to the extent we consider ESP and CCA operations, our concerns about their operations differ somewhat from our concerns about the operations of the investor-owned utilities. In the context of the RPS program, our primary concern is to ensure that ESPs and CCAs do in fact reach the goal of 20% renewable energy by 2010.8 We are, however, somewhat less concerned about the details of how they get there.
Therefore, we do not believe it is reasonable to require these entities to be subject to the exact same steps for RPS implementation purposes as the utilities we fully regulate. We also do not believe that it is necessarily reasonable to subject ESPs and CCAs to the same RPS process requirements as each other, simply because they are not utilities. A CCA, for example, will likely be answerable to the political authorities in the community in which it is operating, in addition to its customers. The business of an ESP, on the other hand, is much more highly sensitive to price pressures than a utility, which has captive customers, at least at this time. Thus, we are sensitive to the particular requirements and pressures of each type of entity and do not necessarily want to impose a "one size fits all" RPS regulatory scheme.
Similar reasoning exists for the small and multi-jurisdictional utilities. We understand that the small utilities have limited resources, and often have load profiles and equipment that differs from those of the larger utilities.
As pointed out by Pacificorp, multi-jurisdictional utilities present a different set of issues, rendering their participation in the RPS program somewhat more complex. UCS, ORA, and TURN note that small and multi-jurisdictional utilities are in fact different from the large utilities, and suggest alternative methods for the Commission to use in ensuring their participation in the RPS program. (See, UCS Opening Brief, pp. 5-6; ORA Opening Brief, p. 7; TURN Opening Brief, pp. 8-9.) Pacificorp believes that some of these suggestions may have merit. (Pacificorp Reply Brief, pp. 1, 2, 7, 9.) We believe that it would be reasonable to treat the small and multi-jurisdictional utilities similar to ESPs and CCAs.
With this guidance in mind, we will ask the Assigned Commissioner and Assigned ALJ to determine a process for deciding how ESPs, CCAs, and small and multi-jurisdictional utilities participate in and comply with the RPS. We expect that, at a minimum, this process will request that interested ESPs, CCAs (or potential CCAs), and small and multi-jurisdictional utilities, and any other interested parties, submit to us their proposals for the manner in which these entities should participate in the RPS program, keeping in mind the five fundamental requirements of 1) meeting the 20% requirement by 2010; 2) increasing their renewable sales by at least 1% per year; 3) reporting their progress to the Commission; 4) utilizing flexible compliance mechanisms; and 5) being subject to penalties and penalty processes.
For CCAs, we will also make a minimum requirement that the CCAs file an RPS procurement plan along with their "implementation plan" required to be submitted to this Commission by Section 366.2(c) (3) and (5), which state that "a community choice aggregator establishing electrical load aggregation pursuant to this section shall develop an implementation plan detailing the process and consequences of aggregation" and "the community choice aggregator shall file the implementation plan with the commission, and any other information requested by the commission that the commission determines is necessary to develop the cost-recovery mechanism in subdivisions (d), (e), and (f)."
For administrative simplicity, we suggest that CCAs include in their "implementation plans" required by Section 366.2 (c) information about their renewable procurement plans.
7 We note that the structure of the RPS program, with its calculation of a Market Price Referent, and contract prices above that level paid from Public Goods Charge funds, appears to have been designed specifically to deal with legal issues that are more applicable to utilities than to ESPs or CCAs.
8 The annual procurement targets are a means of ensuring that goal is reached in a relatively orderly fashion.
