Background
In April 2004, the Commission issued two rulemakings, R.04-04-003 to review the IOUs' long-term procurement plans (LTPP) and R.04-04-025 to address pricing terms for QF contracts. QFs have been a resource for electricity in the three IOUs procurement portfolios for over 20 years and many of the long-term contracts the IOUs had entered into with QFs are set to expire in the 2005 to 2006 timeframe. The Commission recognizes that there is a tension between the federal and state policies encouraging and supporting QF resources and the IOUs' concern over the pricing structure for the QF contracts. R.04-04-025 was initiated to establish a pricing mechanism going forward for QF contracts, and as part of the LTPP proceeding, R.04-04-003, the Commission planned to revisit the state's interest in continuing to promote and support QF power.
The two dockets have been combined only for the economies and efficiencies that one round of evidentiary hearings (EHs) can provide to the parties and the Commission.1 Because R.04-04-025 concerns pricing issues, complex issues have arisen between the parties and the IOUs over data requests, confidentiality, market-sensitive materials, and non-disclosure agreements. While it was anticipated that EHs would have taken place in early 2005, the complexity of the data issues has delayed the preparation of testimony and the EHs are now scheduled for January 2006.
The QF policy and pricing issues have been of concern to the Commission and the stakeholders for quite some time, and while preparing for a final Commission decision on these issues in the combined dockets, R.04-04-003 and R.04-04-025, the Commission has issued a few interim decisions to address QF contracts that were expiring in this time frame between decisions. The most recent interim decision was D.04-01-050, issued in January 2004 that continued the treatment of expiring QF contracts established in earlier interim decisions, D.02-08-071 and D.03-12-062. D.04-01-050 provided relief for QF contracts expiring through the end of 2005.
On August 9, 2005, Administrative Law Judges (ALJs) Halligan and Brown directed parties to file comments on recommendations to the Commission for QF contracts expiring after January 1, 2006, and before the Commission issues a final decision in the combined dockets, R.04-04-003 and R.04-04-025.
Cogeneration Association of California (CAC) and the Energy Producers and Users Coalition (EPUC), the California Cogeneration Council (CCC): Modesto Irrigation District (MID), Pacific Gas and Electric Company (PG&E), Southern California Edison Company (SCE) and San Diego Gas & Electric Company (SDG&E) filed comments. CAC and EPUC, CCC, MID, the Office of Ratepayer Advocates (ORA), PG&E and SCE filed replies.
1 The proceedings are not consolidated.
