ALJ/CAB/sid Date of Issuance 11/10/2008
Decision 08-11-008 November 6, 2008
BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA
Order Instituting Rulemaking to Integrate Procurement Policies and Consider Long-Term Procurement Plans. (U 39 E) |
Rulemaking 06-02-013 (Filed February 16, 2006) |
DECISION ON PETITIONS FOR MODIFICATION
OF DECISION 07-12-052
TABLE OF CONTENTS
Title Page
DECISION ON PETITIONS FOR MODIFICATION 2
OF DECISION 07-12-052 2
1. Summary 2
2. Petitions for Modification 3
3. Overview 3
4. Petitions for Modification of D.07-12-052 4
4.1. SCE and SDG&E's January 23, 2008 and PG&E's
January 28, 2008 Petitions for Modification 4
4.2. Independent Energy Producers Association's Petition for Modification 6
4.3. Competitive Market Advocates' Petition for Modification 7
4.4. Calpine Corporation's Petition for Modification 11
4.5. SDG&E's June 9th, 2008 Petition for Modification 12
4.6. PG&E and SDG&E's June 13th, 2008 Joint Petition
for Modification 13
5. Discussion 14
5.1. Debt Equivalence 14
5.1.1. The DE Adder as a Bid Evaluation Criterion 16
5.1.2. The DE Adder and Pub. Util. Code § 454.6 18
5.2. Head-to-Head Competition Between PPAs and UOG 18
5.3. Exceptions to RFO Solicitations 20
5.4. Code of Conduct 23
5.5. Solicitations and Existing Generation 24
5.6. SDG&E's Need Authorization 25
5.7. Independent Evaluator 26
5.8. Conclusions 29
5.9. Further Modifications to D.07-12-052 30
6. Comments on Proposed Decision 31
7. Assignment of Proceeding 34
Findings of Fact 34
Conclusions of Law 37
ORDER 38
DECISION ON PETITIONS FOR MODIFICATION
1. Summary
Following the Commission's issuance of Decision (D.) 07-12-052 on December 20, 2007, seven Petitions for Modification (PFM) were filed. This decision grants in part, and denies in part, the requested modifications and clarifies some inconsistencies.
D.07-12-052 reviewed, critiqued and adopted, with modifications, the long-term procurement plans (LTPPs) of Pacific Gas and Electric Company, Southern California Edison Company and San Diego Gas & Electric Company (SDG&E) for the 10-year period 2007-2016. More than 30 intervenors provided insight and dissection of the LTPPs and provided guidance for our evaluation. The decision covered the history and background of energy procurement and its integration into California's developing environmental policies, included forecasts, resources and need determinations for the utilities, developed guidelines for the procurement process, and discussed how each LTPP interfaced with state energy policies.
There were seven PFM for D.07-12-052 filed and the modifications granted are as follows:
1. We authorize the investor-owned utilities (IOU) to recognize the effects of debt equivalence when comparing power purchase agreements (PPA) against PPAs in their bid evaluations, but not when a utility-owned generation (UOG) project is being considered;
2. We delete the exception of allowing the IOUs to choose UOG projects outside of a competitive solicitation based solely on the synergies associated with expansion of existing facilities;
3. We clarify the circumstances under which engineering, procurement and construction bids may be considered;
4. We authorize SDG&E to procure up to the 530 megawatts (MW) of new local capacity that was conditionally authorized in D.07-12-052, clarifying that applications for this procurement should be supported by updates of the status and projected on-line date of the Sunrise Powerlink project; and
5. We modify the circumstances under which an IOU must retain the services of an independent evaluator (IE) for requests for offers (RFO) that seek products two years or greater in duration. However, we still require that an IE be utilized whenever an affiliate or utility bidder participates in the RFO, regardless of contract duration.
