2. Background
In Decision (D.) 07-09-040, we adopted specific policies and pricing mechanisms applicable to the purchase of energy and capacity from qualifying facilities (QFs) by Pacific Gas and Electric Company (PG&E), Southern California Edison Company (SCE) and San Diego Gas & Electric Company (SDG&E) (collectively, the utilities or IOUs). Among other things, D.07-09-040 revised the methodology for calculating SRAC prices. This revised formula, the MIF, replaced the Transition Formula adopted in D.96-12-028, as modified by D.01-03-067.1 The MIF was to be applied prospectively "to ensure that SRAC prices continue to reflect utility avoided cost in the changing electricity markets in California." (D.07-09-040, at p. 9.)
Applications for rehearing of D.07-09-040 were filed by various parties, including a joint application for rehearing filed by PG&E, SCE, SDG&E, The Utility Reform Network and the Division of Ratepayer Advocates (collectively, Joint Parties). Among other challenges, Joint Parties asserted that D.07-09-040 erred by failing to order retroactive application of the MIF. All of the applications for rehearing were addressed in D.08-07-048, which modified
D.07-09-040 and denied rehearing of D.07-09-040, as modified. In response to Joint Parties' assertions concerning retroactive application of the MIF,
D.07-09-040 was modified to permit the IOUs to seek retroactive application of the MIF. Any requests, however, were to be filed by November 4, 2008.
D.08-07-048 also included provisions to permit the IOUs to file an application for retroactive adjustment of SRAC prices on a going forward basis. Such an application would be limited to two years from the beginning of any alleged period of overpayment. (D.08-07-048, at p. 19 [Ordering Paragraph (OP) 1.(f)].)
On October 3, 2008, the QF Parties filed a joint petition (Petition) to modify D.08-07-048.2 QF Parties request that the Commission eliminate the process adopted in D.08-07-048 that would permit the IOUs to file an application for retroactive review of payments made to the QFs. Responses opposing the Petition were filed by SCE, PG&E and SDG&E.
1 D.01-03-067 revised SCE's Transition Formula by replacing the fixed factor with a dynamic factor. It also replaced the Topock gas index used in the Transition Formula for all three utilities with a gas index based on Malin, plus intrastate gas transportation. SCE's revised Transition Formula is more commonly referred to as the Modified Formula.
2 On September 3, 2008, CAC and EPUC filed a joint application for rehearing of D.08-07-048. On January 29, 2009, this joint application for rehearing was denied in D.09-01-039.
