11. Renewable Portfolio Standards Contract Administration and Costs

SCE originates certain power purchase agreements pursuant to California's renewable portfolios standard (RPS) legislation, which became effective on January 1, 2003. Commission resolutions approving these contracts typically provide for the recovery of all payments made pursuant to those contracts, subject to the Commission's review of the reasonableness of SCE's contract administration. SCE entered into 32 new RPS contracts and executed 29 amendments with renewable energy counterparts (22 of which were submitted for review in this proceeding²⁸) during the Record Period. None of the contract amendments filed for review in this application resulted in a price increase. SCE also reported four RPS contract assignments, and no activity related to dispute resolution and litigation. Accordingly, SCE provided testimony to set forth its RPS contract-related expenses, describe its RPS contract development and administration activities during the Record Period, and demonstrate that such activities were reasonable and in accordance with all applicable standards.

As indicated above, DRA does not object to the Commission granting SCE's request that its Non-QF contract administration activities, which include those related to RPS contracts, be found reasonable. However, DRA recommends that SCE explain the contract administration processes for its renewable generation contracts in its next annual ERRA compliance filing, because SCE did not report the administrative processes for its RPS contracts in its testimony this year.

Based on the testimony of SCE and DRA, we conclude that SCE's administration and management of its RPS contracts during the Record Period was reasonable, and the associated RPS costs are recoverable. SCE should consult with DRA to determine how to assist DRA in understanding the contract administration processes for renewable generation contracts in SCE's next annual ERRA compliance filing.

²⁸ SCE either had filed or planned to file advice letters for the remaining contract amendments.