Other Modifications to the MCP

The other variables in determining avoided costs include: T&D avoided costs and environmental cost adders. For the T&D avoided costs, the utilities propose to use costs based on findings from prior filings. The proposal appears reasonable for use in PY 2001. With respect to environmental costs, the utilities propose an adder of 1 cent/kWh, which was derived from the 1998 CEC forecast, based on costs adopted for PY 1999 and PY 2000 programs, extended by the average growth rate of the forecast. The CEC notes that it does not have any analysis to back up a value of 1 cent or 0.5 cents. There is insufficient information upon which to rule on this issue at this time. The utilities should file as they propose and if other parties have issues with respect to the environmental adder, they should be prepared to present them expeditiously after the Applications are filed.

No party has objected to the utilities' methodology for developing avoided costs, which expand the MCP to 8760 hours. Nor has any party objected to the utilities' proposal to exclusively use the public purpose test (PPT) and total resource cost test (TRC) because the other tests require information that may not be available given the new cost forecast. These recommendations appear reasonable at this time.