ALJ/BWM/sid Mailed 2/15/2007
Decision 07-02-011 February 15, 2007
BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA
Order Instituting Rulemaking to Continue Implementation and Administration of California Renewables Portfolio Standard Program. |
Rulemaking 06-05-027 (Filed May 25, 2006) |
OPINION CONDITIONALLY ACCEPTING
PROCUREMENT PLANS FOR 2007 RPS SOLICITATIONS
TABLE OF CONTENTS
Title Page
OPINION CONDITIONALLY ACCEPTING
PROCUREMENT PLANS FOR 2007 RPS SOLICITATIONS 2
1. Summary 2
2. Procedural Background 4
3. Overview of RPS Program and 2007 Plans 6
4. Issues Common to All Plans 14
4.1. Credit Requirements and Collateral Pool 16
4.1.1. Background 16
4.1.2. PG&E Proposal 17
4.1.3. SCE Proposal 18
4.1.4. SDG&E 19
4.1.5. Observations 19
4.1.6. Collateral Pool 21
4.2. Utility-Owned Projects 23
4.3. Financial Disclosures, Rate Adjustments, and Change in Law 27
4.3.1. Disclosures Pursuant to FIN 46(R) 27
4.3.2. Project-Specific Information 28
4.3.3. Rate Adjustments 30
4.3.4. Change in Law 32
4.4. Waivers and Disclaimers 33
4.5. Scheduling Coordinator 34
4.6. Evaluation Criteria 35
4.7. Changes Pursuant to SB 107 38
4.7.1. RECs 38
4.7.1.1 Add Definition of REC and Conveyance to IOU 39
4.7.1.2. AB 32 Concepts 39
4.7.1.3 Include REC in Environmental Attributes 40
4.7.1.4. Green Attributes 40
4.7.2. Agreement Information 43
4.7.3. Access to Bid Information 44
4.7.4. Other 45
4.7.5. Timing 46
4.8. Commission Review Process 47
4.8.1. General Review of Contracts 47
4.8.2. Continue with Current Process 48
4.8.3. Defense of Noncompliance Penalty 50
4.9. Other Changes to Model Contracts 50
4.10. RPS Data 52
5. Issues Specific to an IOU Plan 53
6. Schedule and Organization for 2007 Solicitation and 2008 Plans 59
7. Comments on Proposed Decision 63
8. Assignment of Proceeding 64
Findings of Fact 64
Conclusions of Law 67
ORDER............................................................................................. 70
APPENDIX A - Review of and Changes to 2007 Plans
APPENDIX B - Renewables Portfolio Standard Solicitation Timeline
APPENDIX C - Change in Law
OPINION CONDITIONALLY ACCEPTING
PROCUREMENT PLANS FOR 2007 RPS SOLICITATIONS
1. Summary
As part of the California Renewables Portfolio Standard (RPS) Program, each California electrical corporation or retail seller, with limited exception, is required each year to procure a minimum quantity of electricity from eligible renewable energy resources. The amount must increase by at least 1% each year, and reach 20% of total retail sales no later than 2010. As part of fulfilling this requirement, each electrical corporation must prepare a renewable energy procurement plan (Plan). The Commission is required to review and accept, modify or reject each Plan.
In this order, we conditionally accept the proposed Plans filed by Pacific Gas and Electric Company (PG&E), Southern California Edison Company (SCE), and San Diego Gas & Electric Company (SDG&E). In doing so, the important steps we take include:
1. Specific Proposals: Accept or reject several specific proposals (see Appendix A for a more complete list), such as:
a. Accept PG&E's proposals to reduce a portion of its Project Development Security, and include solicitation of "sites for development."
b. Accept SCE's proposal to offer Scheduling Coordinator (SC) services within an established bandwidth of the generator's operation, but decline to order other investor-owned utilities (IOUs) to offer this service.
c. Adopt proposals for all three IOUs to: (i) require certain financial disclosures only after a project is on an IOU's shortlist; (ii) implement certain changes relative to Senate Bill (SB) 107; and (iii) direct each IOU to continue to improve its Plan, including its statement of evaluation criteria and selection process.
d. Reject a proposal to permit consideration of cost recovery of debt equivalence and other costs through an advice letter.
2. General Direction: Encourage, or repeat our encouragement, of IOUs to consider or reconsider:
a. All deposit and collateral policies and amounts to reach an efficient and equitable balance.
b. The extent of required project-specific financial information.
c. Inclusion of a "change in law" clause in the model contracts.
d. The tone and nature of waiver and disclosure requirements.
e. The building of RPS facilities, to the extent necessary or desirable, to permit reaching RPS Program goals within existing Commission-approved long term procurement processes and guidelines, including the possibility of soliciting development sites, as does PG&E.
f. Continuing improvements to each Plan, including the form and format.
3. Commission Process: Continue existing Commission practice for review of proposed RPS contracts by advice letter, and point out Energy Division's existing and ongoing role to reject or reclassify some advice letters, as appropriate.
4. Schedule: Adopt a (i) schedule for completing the 2007 solicitation cycle (see Appendix B), and (ii) process for initiating the 2008 solicitation cycle.
PG&E, SCE and SDG&E shall each submit an amended Plan. The amended Plan shall be submitted to the Director of the Energy Division within 15 days of the date this order is mailed. Unless suspended by the Energy Division Director within 22 days of the date this order is mailed, each utility shall proceed to use its amended Plan for its 2007 RPS program and solicitation.
We continue to employ the presumption that utilities are able to use their business judgment in running their solicitations, with the guidance we provide and within the parameters we establish. Utilities ultimately remain responsible for program implementation, administration and success, within application of flexible compliance criteria. We will later judge the extent of that success, including the degree to which each IOU implements the orders adopted herein, elects to take the guidance provided herein, demonstrates creativity and vigor in program administration and execution, and reaches program targets and requirements.
This proceeding remains open to address specific additional matters. These include policy issues identified in the August 21, 2006 Scoping Memo; compliance reports which have been, or will be, filed in 2007; enforcement matters which may arise; and other issues, to the extent either identified in the initial Scoping Memo or a later amended Scoping Memo.
