ALJ/AYK/amt Date of Issuance 4/17/2009

Decision 09-04-032 April 16, 2009

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Order Instituting Rulemaking to Promote Policy and Program Coordination and Integration in Electric Utility Resource Planning.	Rulemaking 04-04-003 (Filed April 1, 2004) (QF Issues)
Order Instituting Rulemaking to Promote Consistency in Methodology and Input Assumptions in Commission Applications of Short-Run And Long-Run Avoided Costs, Including Pricing for Qualifying Facilities.	Rulemaking 04-04-025 (Filed April 22, 2004) (QF Issues)

DECISION DENYING IN PART, AND GRANTING
IN PART, THE JOINT PETITION FOR MODIFICATION
OF DECISION 08-07-048 FILED BY QF PARTIES

1. Summary

This decision addresses a joint petition filed by the Independent Energy Producers Association (IEP), the Cogeneration Association of California (CAC), the Energy Producers and Users Coalition (EPUC) and the California Cogeneration Council (CCC) (collectively, QF Parties) to modify Decision (D.) 08-07-048. We deny QF Parties' request to suspend the November 2008 filings for retroactive application of the Market Index Formula (MIF). However, we agree that the procedures for setting an earlier implementation date for any newly-adopted short-run avoided cost (SRAC) formula should be clarified. Accordingly, this decision modifies D.08-07-048 and sets forth the rules for those rare instances when a newly-adopted short-run avoided cost pricing formula might be subject to an earlier effective date. In particular, we make clear that a previously adopted pricing formula is presumed to remain lawful until it is changed by a subsequent order of this Commission and that this presumption of lawfulness can be rebutted only by a showing, supported by substantial evidence, that the previously adopted formula is resulting in prices that persistently and systematically violate PURPA. Further, this decision establishes requirements in order for an earlier implementation date to be considered and limitations on this earlier date. These modifications provide the regulatory certainty QF Parties maintain is necessary to ensure continued operation of QFs in California.