XIII. Assignment of Proceeding

Dian M. Grueneich is the assigned Commissioner and Sarah R. Thomas is the assigned ALJ in this proceeding.

Findings of Fact

1. In the resource adequacy proceeding (R.05-12-013) it was determined in D.06-06-064 § 3.3.2 that the resource adequacy requirement should be rounded to the nearest MW, and LSEs with local resource adequacy requirements less than 1 MW are not required to make a showing. Therefore, a de minimis amount of energy would be less than 1 MW of capacity per year, and/or an equivalent of energy.

2. CMTA, including its Energy Committee, is not a market participant because a) its primary focus in proceedings at the Commission is not to advocate for persons/entities that sell or market energy or capacity; bid on, own, or purchase power plants; or bid on utility procurement solicitations, b) a majority of its members do not sell or market energy or capacity; bid on, own, or purchase power plants; or bid on utility procurement solicitations, and c) the Energy Committee excludes members who are market participants, and Energy Committee members will agree not to share market sensitive information with market participants.

3. CLECA is not a market participant because a) its primary focus in proceedings at the Commission is not to advocate for persons/entities that sell or market energy or capacity; bid on, own, or purchase power plants; or bid on utility procurement solicitations, and b) a majority of its members do not sell or market energy or capacity; bid on, own, or purchase power plants; or bid on utility procurement solicitations.

4. IEP is a market participant. It is a trade association representing both the interests of developers and operators of independent energy facilities and independent power marketers, whose primary goals are to safeguard the interests of operating independent energy projects. As such, a) its primary focus in proceedings at the Commission is to advocate for persons/entities that sell or market energy or capacity; bid on, own, or purchase power plants; or bid on utility procurement solicitations, and b) a majority of its members sell or market energy or capacity; bid on, own, or purchase power plants; or bid on utility procurement solicitations.

5. CAC is a market participant because a) it represents the power generation, power marketing and cogeneration operation interests, and b) a large number of cogenerators, or an organization representing them, has a far clearer potential to materially impact the market price of electricity that a cogenerator with a de minimis contribution to the market acting alone.

6. EPUC is a market participant because a) it represents the customer generation interests of Aera Energy LLC, BP America Inc. (including Atlantic Richfield Company), Chevron U.S.A. Inc., ConocoPhillips Company, ExxonMobil Power and Gas Services Inc, Shell Oil Products US, THUMS Long Beach Company, Occidental Elk Hills, Inc., and Valero Refining Company-California, b) a large number of generators, or an organization representing them, has a far clearer potential to materially impact the market price of electricity that a cogenerator with a de minimis contribution to the market acting alone, and c) EPUC regularly participates at the Commission jointly with CAC.

7. IOUs are market participants.

8. CAISO is not a market participant because it is a not-for-profit public benefit corporation that ensures the reliability of the electric grid in California. While it enters the market for out of market calls, it engages in these activities to ensure system reliability, not for its own economic gain. It operates the real-time market and is establishing a day-ahead market. In this capacity, it acts as neutral arbiter, not as a participant at all. Its incentive is to keep the lights on and the grid stable, not to drive up (or down) the price of electricity out of a desire to enhance profits for itself.

9. ESPs are market participants if they operate above the de minimis threshold.

10. AReM is a market participant because its principal purpose is to represent entities operating in the wholesale power market.

Conclusions of Law

1. SB 1488 requires that we interpret the term "market participant" narrowly, to only include those persons and entities who could use market sensitive information to cause harm to the market or gain an unfair market advantage.

2. "Market participants" do not include retail purchasers of electricity.

3. Cogenerators should not be universally prohibited from access to market sensitive data. If they do not have the potential to materially affect the price paid or received for electricity if in possession of such information, they are not market participants under § 454.5(g).

4. DA electricity customers are not market participants for purposes of § 454.5(g).

5. We should not bar attorneys or consultants working for a market participant from later working for a non-market participant. Simultaneous representation of market and non-market participants on procurement, resource adequacy, RPS, or the wholesale purchase, sale or marketing of energy or capacity, or the bidding on or purchasing of power plants, or bidding on utility procurement solicitations will act as a bar to access to market sensitive data.

6. Market participants may designate "Reviewing Representatives" to gain access to market sensitive information, if such representatives meet the four criteria in this decision.

7. In determining whether a trade association may have access to market sensitive information, we should examine whether

· The organization's primary focus in proceedings at the Commission is to advocate for persons/entities that purchase, sell or market energy or capacity at wholesale; bid on, own, or purchase power plants; or bid on utility procurement solicitations, and/or

· A majority of the organization's members purchase, sell or market energy or capacity at wholesale; bid on, own, or purchase power plants; or bid on utility procurement solicitations, and/or

· The organization was formed for the purpose of obtaining market sensitive information, and/or

· The organization is controlled or primarily funded by a person or entity whose primary purpose is to purchase, sell or market energy or capacity at wholesale; bid on, own, or purchase power plants; or bid on utility procurement solicitations.

ORDER

IT IS ORDERED that:

1. We adopt the following definition of "market participant" for purposes of access to "market sensitive" procurement data covered by Pub. Util. Code § 454.5(g) and/or Decision (D.) 06-06-066:

1) A person or entity, or an employee of an entity, that engages in the wholesale purchase, sale or marketing of energy or capacity, or the bidding on or purchasing of power plants, or bidding on utility procurement solicitations, or consulting on such matters, subject to the limitations in 3) below.

2) A trade association or similar organization, or an employee of such organization,

a) whose primary focus in proceedings at the Commission is to advocate for persons/entities that purchase, sell or market energy or capacity at wholesale; bid on, own, or purchase power plants; or bid on utility procurement solicitations; or

b) a majority of whose members purchase, sell or market energy or capacity at wholesale; bid on, own, or purchase power plants; or bid on utility procurement solicitations; or

c) formed for the purpose of obtaining market sensitive information; or

d) controlled or primarily funded by a person or entity whose primary purpose is to purchase, sell or market energy or capacity at wholesale; bid on, own, or purchase power plants; or bid on utility procurement solicitations.

3) A person or entity that meets the criteria of 1) above is nonetheless not a market participant for purpose of access to market sensitive data unless the person/entity seeking access to market sensitive information has the potential to materially affect the price paid or received for electricity if in possession of such information. An entity will be considered not to have such potential if:

a) the person or entity's participation in the California electricity market is de minimis in nature. In the resource adequacy proceeding (R.05-12-013) it was determined in D.06-06-064 § 3.3.2 that the resource adequacy requirement should be rounded to the nearest megawatt (MW), and load serving entities (LSEs) with local resource adequacy requirements less than 1 MW are not required to make a showing. Therefore, a de minimis amount of energy would be less than 1 MW of capacity per year, and/or an equivalent of energy; and/or

b) the person or entity has no ability to dictate the price of electricity it purchases or sells because such price is set by a process over which the person or entity has no control, i.e., where the prices for power put to the grid are completely overseen by the Commission, such as subject to a standard offer contract or tariff price. A person or entity that currently has no ability to dictate the price of electricity it purchases or sells under this section, but that will have such ability within one year because its contract is expiring or other circumstances are changing, does not meet this exception; and/or

c) the person or entity is a cogenerator that consumes all the power it generates in its own industrial and commercial processes, if it can establish a legitimate need for market sensitive information.

2. A market participant (as that term is defined in this decision) may be denied access to "market sensitive" procurement data covered by Pub. Util. Code § 454.5(g) and/or D.06-06-066.

3. We adopt the following definition of "non-market participant" for purposes of access to "market sensitive" procurement data covered by § 454.5(g) and/or D.06-06-066:

Persons or entities that do not meet the definition of market participant are non-market participants, and may have access to market sensitive information. It is proper to require such non-market participants to sign a nondisclosure agreement or to be bound by a protective order prohibiting the disclosure of information to market participants.

4. All persons or entities, except Commission staff, who receive market sensitive information, may be required to execute a non-disclosure agreement and/or be bound by a protective order against disclosure of such information.

5. Reviewing Representatives of market participants may have access to market sensitive data if they meet the following four criteria:

· Reviewing Representatives may not currently be engaged, directly or indirectly, in (a) the purchase, sale, or marketing of electrical energy or capacity or natural gas (or the direct supervision of any employee(s) whose duties include such activities), (b) the bidding on or purchasing of power plants (or the direct supervision of any employee(s) whose duties include such activities), or (c) consulting with or advising others in connection with any activity set forth in subdivisions (a) or (b) above (or the direct supervision of any employee(s) whose duties include such activities or consulting).

· Reviewing Representatives may not be employees of market participants.

· Reviewing Representatives shall use market sensitive data only for the purpose of participating in a formal Commission proceeding.

· Reviewing Representatives shall execute a non-disclosure agreement and be subject to a protective order which precludes the Representatives from disclosing market sensitive information to anyone who is a market participant or who is an employee or an agent of a market participant.

6. Attorneys or consultants that simultaneously represent market and non-market participants on procurement, resource adequacy, RPS, or the wholesale purchase, sale or marketing of energy or capacity, or the bidding on or purchasing of power plants, or bidding on utility procurement solicitations may not have access to market sensitive data.

This order is effective today.

Dated December 14, 2006, at San Francisco, California

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