VII. Comments on Alternate Draft Decision

The draft decision of President Peevey in this matter was mailed to the parties in accordance with Pub. Util. Code Section 311(e) and Rule 77.6 of the Rules of Practice and Procedure. Comments were filed on September 29, 2005 by IEP, CalWEA, AReM, UCS, ORA, Mountain Utilities, GPI, CCSF, SCE, TURN, 3 Phases Energy Services, PG&E, and CEERT. Reply comments were filed on October 3, 2005 by SCE, AReM, PG&E, CCSF, and TURN. Most comments and reply comments simply reargue parties' previous positions on issues in this decision. No changes were made in response to reargumentation. However, several clarifications were made to respond to specific targeted comments of some parties, as reflected in the text of the decision above.

VIII. Findings of Fact

1. D.03-06-071 initiated the implementation of the RPS program for the three large investor-owned utilities.

2. The investor-owned utilities are electrical corporations for purposes of the RPS statute.

3. The Energy Action Plan requires electrical corporations to reach 20% renewable generation by 2010.

4. The RPS statute states that, for purposes of the RPS program, ESPs and CCAs are subject to the same terms and conditions applicable to an electrical corporation.

5. The RPS Statute also states that the Commission shall institute a rulemaking to determine the manner in which electric service providers and community choice aggregators will participate in the RPS program.

6. Small and multi-jurisdictional utilities are electrical corporations for purposes of the RPS statute.

7. Procurement entities or other third party intermediaries may facilitate the procurement of renewable generation contracts by ESPs, CCAs, and small and multi-jurisdictional utilities, provided that those individual entities remain responsible and accountable for RPS compliance.

8. AB 200, adding Section 399.17 to the Public Utilities Code, effective in 2005, affects RPS compliance requirements for an electrical corporation with 60,000 or fewer customer accounts in California that serves retail end-use customers outside of California.

9. The Commission lacks accurate information about the amount of renewable generation being procured by ESPs, CCAs, and small and multi-jurisdictional utilities.

IX. Conclusions of Law

10. All entities subject to the RPS program, including utilities (electrical corporations), small and multi-jurisdictional utilities, energy service providers and community choice aggregators, should be subject to the following requirements under the same terms and conditions:

11. The Commission has policy discretion to determine the manner of ESP and CCA participation in the RPS program.

12. ESPs, CCAs, and small and multi-jurisdictional utilities should not be treated identically to the investor-owned utilities for purposes of the manner in which they meet RPS program requirements listed in Conclusion of Law 1.

13. The manner in which ESPs, CCAs, and small and multi-jurisdictional utilities should comply with RPS requirements should be further explored.

14. Electrical corporations with 60,000 or fewer customer accounts in California that serve retail end-use customers outside California should comply with the terms of Public Utilities Code Section 399.17 and file a letter with the Commission stating that they are subject to this provision.

15. The Commission should undertake further investigation into the circumstances relevant to those utilities subject to Section 399.17 as well as other small and multi-jurisdictional utilities.

16. CCAs should include information about their renewable procurement plans in their CCA implementation plans required by Public Utilities Code Section 366.2(c).

17. The use of procurement entities or other third party intermediaries should be explored further to see if they can facilitate the procurement of renewable generation by ESPs, CCAs, and small and multi-jurisdictional utilities.

18. The Commission should further explore authorizing the use of unbundled and/or tradeable renewable energy credits (RECs) for compliance with the RPS requirements.

19. The Commission should have more information about the amount of renewable generation being procured by ESPs, CCAs, and small and multi-jurisdictional utilities.

ORDER

IT IS ORDERED that:

20. For purposes of the Renewables Portfolio Standards (RPS) program, Energy Service Providers (ESPs), Community Choice Aggregators (CCAs), and small and multi-jurisdictional utilities are to be treated identically to the large investor-owned utilities for the following purposes:

· The requirement that 20% of retail sales come from renewable sources by 2010, as required by the Energy Action Plan

· The requirement that they increase their renewable retail electricity sales by at l% per year through 2010

· The requirement to report their progress toward meeting RPS program requirements to the Commission

· The ability to utilize the same flexible compliance mechanisms

· The requirement that they be subject to the same penalties and penalty processes.

21. Electrical corporations subject to Public Utilities Code Section 399.17 should file a letter with this Commission so stating within 30 days of the date of this decision.

22. The Assigned ALJ, in consultation with the Assigned Commissioner, shall set a process and schedule for further exploration of the manner in which ESPs, CCAs, and small and multi-jurisdictional utilities should participate in the RPS program. This process shall include, at a minimum, an opportunity for ESPs, CCAs (or potential CCAs), small and multi-jurisdictional utilities, and any other interested parties, to submit detailed proposals for the manner in which these entities should participate in the RPS program.

23. Entities who believe they are subject to Public Utilities Code Section 399.17 shall file a letter so stating in this proceeding. We will further explore the implications of Section 399.17 for those entities in this proceeding.

24. We will further explore the potential use of procurement entities or other third party intermediaries to facilitate the procurement of renewable generation by ESPs, CCAs, and small and multi-jurisdictional utilities.

25. We will further explore in this proceeding or successor proceedings the potential for authorizing unbundled and tradeable renewable energy credits, in a manner and schedule to be determined by the Assigned Administrative Law Judge in consultation with the Assigned Commissioner.

26. We will further explore the use of short-term contracting (less than ten years) to fulfill RPS requirements for CCAs, ESPs, and small and multi-jurisdictional utilities.

27. Energy Division staff and the assigned ALJ shall develop a format and process for obtaining information from the ESPs, CCAs, and small and multi-jurisdictional utilities about their current and projected future renewable resources.

28. The ESPs, CCAs, and small and multi-jurisdictional utilities shall provide information about the current contents of their renewable portfolio and their projected renewable portfolio for 2006 through 2010.

29. The Assigned Commissioner and/or Administrative Law Judges may make such rulings as necessary to manage this proceeding consistent with this decision.

This order is effective today.

Dated November 18, 2005, at San Francisco, California.

Commissioner Grueneich recused
herself from this agenda and was
not part of the quorum in its
consideration.

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