8. Additional Resources

We take this opportunity to address the administrative and technical process, and place resource needs in perspective. As a result, for the reasons explained below, we authorize the Executive Director to hire and manage one or more contractors to perform certain tasks, with cost recovery from ratepayers through the large IOUs.

We recently adopted a schedule for the 2006 solicitation that granted PG&E, SCE and SDG&E more time, but reduced other time (compared to that in the ALJ's proposed order) for the Commission and its staff to perform its many jobs. We did this to assist IOUs reach program goals, while still seeking to maintain the process on an annual cycle completed by the end of the calendar year. We authorized the ED Director to modify the schedule, as needed, but our goal remains to complete the 2006 solicitation by the end of 2006, or no later than early 2007. (D.06-05-039, pp. 59-60; also OP 3.) Nonetheless, for good cause the ED Director has already extended the schedule. This puts further strain on the Commission and its staff.

We are implementing a program with the goal of maintaining and creating a resource base equal to 20% of retail sales within a very few years. If the underlying resource base for those sales is 40,000 megawatts (MW), for example, 20% is 8,000 MW. This is a very large quantity of resources, and our implementation and administration is an important task that often involves many significant technical details and Commission resources.

At the same time, we must be responsive to LSE needs to accomplish program goals in order to advance the public interest. We can do this best if LSEs supplement Commission resources. Therefore, we authorize the Executive Director to hire and manage a contractor, or contractors, to provide technical and other support to assist staff address some or all the following areas:

1. refining and calculating the market price referent

2. evaluating the impact of increasing California's RPS goals from 20% by 2010 to 33% by 2020 through further technical analysis (e.g., energy, economic and environmental modeling of renewable technologies; analyzing the impact of RPS generation on transmission planning, construction and operation; calculating the rate impact of the RPS Program)

3. others as necessary to promote RPS Program goals (e.g., integrating energy efficiency, renewables, demand response, distributed generation and climate change).

The Commission will send approved invoices to PG&E, SCE and SDG&E for payment of these costs on a proportional basis in relation to the annual retail sales used for the RPS Program, as reported in each March 1 report.  PG&E and SDG&E are authorized to establish a Renewables Portfolio Standard Costs Memorandum Account (RPSCMA).  SCE is authorized to modify its existing RPSCMA to add a line item to record third party costs associated with RPS technical contractor activities invoiced through the Commission.  The IOUs are authorized to record these RPS third party technical support costs into the RPSCMA until December 31, 2010.  These costs may be recorded when paid, for later recovery via generation rates. We shall limit the total amount (that will in turn be prorated to the three IOUs) to a cap of $400,000 annually.  Other LSEs are excused (since we do not regulate the rates of ESPs and CCAs, while small and other IOUs will have fewer sales compared to those of the three IOUs, making the complication of additional invoicing for a small amount of money more than the benefit of spreading the cost to all IOUs).²⁷

²⁷ An expense of $400,000 would in turn be charged approximately as follows: $180,000 for PG&E, $180,000 for SCE and $40,000 for SDG&E. If cost recovery was spread more widely, a small IOU or other entity with 10% of SDG&E's retail sales would be assessed about $4,000, or approximately $333 per month. The additional billing complexity for such a small recovery outweighs the benefit of spreading the cost to more customers.