8. Assignment of Proceeding
Michael R. Peevey is the assigned Commissioner and Anne E. Simon and Burton W. Mattson are the assigned ALJs in this proceeding.
1. No motions for evidentiary hearings were filed.
2. Each electrical corporation proposes a tariff to comply with its obligations under § 399.20, and all but Sierra also propose an accompanying standard contract.
3. A "take it or leave it" tariff/standard contract (i.e., one that does not require substantial negotiation between buyer and seller) is consistent with the Commission's fundamental goal here of a simple and streamlined program.
4. Parties agree on a general methodology for allocation of proportionate shares of the 250 MW for this program, and CEC performed the necessary calculation.
5. The approach of performing capacity allocation updates as needed is consistent with the assumption that the capacity allocation will be reasonably stable, and provides cost savings while permitting updates as appropriate.
6. A relatively simple program includes one wherein nearly all important and relevant information may be found in one, or only a few, locations, including the capacity allocation and rates.
7. First-come-first-served applied in the order of when the buyer receives a seller-executed (signed) standard contract (or for Sierra the date of the customer's request for service under the tariff), rather than based on project on-line date, will promote an orderly process, including certainty that the output will be purchased when the project subsequently becomes operational.
8. Once the capacity allocation is met, periodic re-establishment of the queue will foreclose the possibility that sellers remain in the queue indefinitely.
9. Maintenance of the queue by individual project or proposal, without being assignable or tradable, will ensure that the rank within the queue does not itself have a market value.
10. An open-ended or "floating" capacity allocation would introduce confusion and uncertainty in tariff administration, and create risk of more generation being developed than needed or desirable at the MPR.
11. The MPR methodology does not include a provision for reducing the MPR for Scheduling Coordinator services or benefits provided to the seller, and it is not dependent upon the standard terms and conditions.
12. The proposed tariffs and standard contracts do not make clear whether the applicable rate (MPR) applies based on forecast or actual initial operation.
13. Each RPS bid solicitation accepted by the Commission and undertaken by the large investor-owned utilities over the last several years has included payments based on TOU factors, which is consistent with the Commission's intended application of the MPR methodology.
14. A very important aspect of the RPS Program is development, integration and operation of resources on an LCBF basis, and TOU factors do a better job than do annual average rates of promoting LCBF development, integration and operation.
15. An annual average rate would require ratepayers of PG&E and SCE to buy electricity during the off-peak period at a price above the TOU-based off-peak price, thereby incurring unreasonable remarketing costs and frustrating efficiency, equity and LCBF goals.
16. This program has elements which overlap with the SGIP and net metering programs.
17. Not all Commission-adopted STCs apply here (e.g., performance standards since this is a pay for performance program), others apply as adopted by the Commission (e.g., Green Attributes as corrected by D.07-05-057 to ensure buyer and sellers are trading the same item), and others may apply with simplified wording to accomplish the same objective (e.g., confidentiality).
18. Providing an opportunity for both full buy/sell and excess sales will permit gathering important information regarding the economics of, and market response to, the two approaches.
19. Sellers have reduced incentive to enter into contracts for the sale of their generation at a market rate if then required to buy back that same generation to serve their own on-site needs at a much higher retail rate.
20. The seller's decision on how small or large to make the generation facility may be influenced, if not driven, by the choice of full buy/sell or excess sales.
21. A fixed time period leading to potential termination of service under the tariff, or termination of the contract, presents an orderly process for both developer and utility in which to frame future events and plans, and it opens the queue to other projects if and when a project in the queue is subject to termination for not progressing reasonably toward completion or not continuing to operate reasonably.
22. Timely response to an interconnection request is important to prevent interconnection becoming a barrier to project completion, and FERC-approved SGIP and Commission-approved Rule 21 provide orderly and timely interconnection procedures and processes.
23. The model for standardization, efficiency, simplicity and transparency framed in § 399.20 is a useful model for other customers.
24. Other customer groups have expressed interest in a standardized tariff or contract.
25. The Commission has expressed interest in considering standard contracts for relatively small generators using renewable fuels, including bio-energy.
26. The CEC recommends further analysis of using feed-in tariffs to spur additional renewable resource development.
27. The water and wastewater tariff here is a form of feed-in tariff.
28. One application of standard terms and conditions under the RPS Program is reasonable use of tariffs/standard contracts in some situations.
29. California currently has a must purchase obligation for QFs up to 20 MW pursuant to PURPA, and one way to fulfill that duty for RPS generators is by a tariff/standard contract.
30. The fixed capacity allocation of 228.4 MW for expansion of the program to other (non-water/wastewater) customers will, by containing the magnitude of the consequences, if any, mitigate problems should there be an excessive response.
31. Sustainable Conservation and RCM's request that the Commission clarify a finding regarding net greenhouse gas (GHG) emissions from biomass (made in Attachment 7 to D.07-01-039) is beyond the scope of this proceeding.
32. Avista has never provided electric service in California, Avista sold its gas distribution properties to Southwest Gas Corporation in 2005, and NWE cancelled its ESP registration in February 2006.
1. The cost of power procured by an electrical corporation through the tariffs/standard contracts authorized by this order is per se reasonable, in the public interest, and recoverable in rates over the life of the contract, subject to Commission review of contract administration by the electrical corporation.
2. All procurement pursuant to the tariffs/standard contracts authorized by this order is procurement from an eligible renewable energy resource from purposes of determining an electrical corporation's compliance with an obligation that it may have to procure eligible renewable resources pursuant to the California Renewables Portfolio Standard (Pub. Util. Code § 399.11 et seq.), Decision 03-06-071, or other applicable law.
3. Sierra's proposed use of only a tariff should be approved, and other respondents' proposed use of a tariff in concert with a standard contract should be approved.
4. Other than the seller selecting limited items within the contract (e.g., contract term, full buy/sell or excess sales), the standard contracts should be "take it or leave it" (i.e., not require seller to engage in substantial negotiation to complete the transaction).
5. The recommended allocation of shares of the 250 MW for this program should be adopted.
6. Capacity allocation should be updated only as needed and appropriate.
7. The capacity allocation should be stated in the tariff.
8. First-come-first-served should be applied on the basis of the date the buyer receives the standard contract executed (signed) by the seller (for Sierra, the date the customer requests service under the tariff) with a specific subsequent period of time allowed for the project to come on-line, subject to the buyer electing to terminate the contract (or terminate service under the tariff) if seller is not reasonably continuing project development.
9. The queue should periodically be re-established, as needed, after the initial capacity allocation is fully subscribed, and should be maintained in a manner such that ranking within the queue does not itself create a market value.
10. BVES should be permitted to flexibly employ its capacity allocation to encourage additional renewable resource additions, but this should not be permitted for other utilities.
11. Respondents should provide timely information on this program when required by the Commission.
12. PacifiCorp should be permitted to include rates in its tariff, Sierra should be required to include rates in its tariff (because it does not propose a standard contract), and other respondents should be required to include rates in their standard contracts.
13. Respondents should each use the uniform statewide MPR, unless and until a different MPR is found reasonable for SMJUs.
14. PG&E's tariff/standard contract should not contain the provision that the rate "shall be reduced by a ten (10) percent administrative fee."
15. The tariff/standard contract should specify that the applicable table of rates is determined by the date of contract execution, while the applicable rate (MPR) within the table is based on actual commercial operation, not the commercial operation date initially forecast or expected when the standard contract was signed.
16. The MPR-based rate should be time differentiated, not an annual average, except for Sierra, BVES and MU (if MU so chooses).
17. The tariff for SCE, PG&E and SDG&E should provide for service from projects with an effective capacity of not more than 1.5 MW, while the tariff for PacifiCorp, Sierra, BVES and MU may provide for similar service from projects of not more than 1.0 MW.
18. Authorized tariffs/standard contracts should make clear that participants may not simultaneously obtain benefits from both this tariff and the SGIP, net metering programs, California Solar Initiative, or other similar program.
19. Some STCs should be incorporated into the tariffs/standard contracts exactly as worded by the Commission, others may be simplified, and others need not be used, as explained in the body of this order.
20. The law as read by SCE and SDG&E regarding full buy/sell, or PG&E regarding excess sales, are each a reasonable interpretation of the statute.
21. The seller should have the option under the tariff/standard contract to select either full buy/sell or excess sales in the service areas of SCE, PG&E and SDG&E.
22. Each respondent should include a period of (a) 18 months in its tariff or standard contract during which the facility must achieve commercial operation or face the potential for termination of service under the tariff or the standard contract, and (b) no more than 12 consecutive months during which the project may not make any sales or face the potential of termination or service under the tariff or the standard contract.
23. The principles of orderly and timely interconnection procedures and processes in Rule 21 (for SCE, PG&E, SDG&E and BVES) should be required of PacifiCorp, Sierra, and MU (even if they are not required to file their own version of Rule 21, amend their current rules or file another interconnection protocol) and the Commission should enforce the requirement of timely review and disposition of an interconnection request if a complaint is brought to the Commission's attention.
24. A limited expansion of the basic tariff/standard contract program framed in § 399.20 should be adopted for customers other than water/wastewater agencies in the service areas of SCE and PG&E.
25. The program as expanded to other than water/wastewater customers should be limited to 228.4 MW and should use the same essential features as adopted for the § 399.20 tariffs/standard contracts, such as but not limited to: (a) projects no larger than 1.5 MW, (b) tariff rate is the MPR, (c) maximum capacity allocated to SCE and PG&E as in the § 399.20 program (i.e., SCE allocated 123.8 MW, PG&E allocated 104.6 MW), (d) participants not eligible for SGIP or net metering, (e) seller has option for full buy/sell or excess sales, and (f) buyer may terminate agreement if commercial operation not commenced within 18 months or fails to operate for a period of 12 consecutive months.
26. Each respondent should, upon the new tariff/standard contract becoming effective, notify its water, wastewater and, to the extent reasonable, other potentially interested or affected customers of the availability of this new opportunity, and maintains current information about this opportunity on its web page.
27. Avista and NWE should be dismissed as respondents in this proceeding.
28. This order should be effective today so that tariffs/standard contracts may be filed and become effective without delay, thereby helping California meet its goal of having 20% of its electricity generated by RPS-eligible facilities by 2010.
IT IS ORDERED that:
1. Within seven days of the date this order is mailed, each electrical corporation named below shall file and serve an advice letter. The electrical corporations are: Southern California Edison Company (SCE), Pacific Gas and Electric Company (PG&E), San Diego Gas & Electric Company, PacifiCorp, Sierra Pacific Power Company (Sierra), Bear Valley Electric Service Division of Golden State Water Company, and Mountain Utilities. The advice letter shall transmit a tariff and (except for Sierra) a standard contract to implement the provisions of Pub. Util. Code § 399.20 (RPS Tariff for Water/Wastewater Customers). The tariff and standard contract shall be consistent with the proposal each electrical corporation filed in this proceeding, but shall be revised and amended consistent with the discussion in the body of this order, findings of fact and conclusions of law. The revisions and amendments are summarized in Attachment A. The advice letter, tariff and standard contract shall be in compliance with General Order 96-B. The advice letter may be filed pursuant to the provisions of either Tier 1 or Tier 2.
2. Within seven days of the date this order is mailed, SCE and PG&E shall each file an advice letter. The advice letter shall transmit a tariff and standard contract for a limited expansion of the program adopted in Ordering Paragraph 1 above pursuant to Pub. Util. Code § 399.20. The expansion shall be to customers other than water/wastewater customers (RPS Tariff for Customers Other Than Water/Wastewater). The tariff and standard contract shall be consistent with the proposal each electrical corporation filed in this proceeding, but shall be revised and amended consistent with the discussion in the body of this order, findings of fact and conclusions of law. The revisions and amendments are summarized in Attachment A. The advice letter, tariff and standard contract shall be separate and distinct from the advice letter, tariff and standard contract filed pursuant to Ordering Paragraph 1. The advice letter, tariff and standard contract shall be in compliance with General Order 96-B. The advice letter may be filed pursuant to the provisions of either Tier 1 or Tier 2.
3. Each electrical corporation named above shall provide information on these tariffs, standard contracts and programs as and when required by the Commission. This shall include, but is not limited to, data on service under the tariffs, sellers, projects, capacity allocations and project queue. Electrical corporations shall work with Commission staff to develop a reasonable method of periodic reporting of this routine information, if and as determined necessary by Commission staff.
4. Each electrical corporation named in Ordering Paragraph 1 shall, upon the new tariff/standard contract becoming effective, notify its water, wastewater and, to the extent reasonable, other potentially interested or affected customers of the availability of this new opportunity, and maintain current information about this opportunity on its web page. Each electrical corporation shall provide the Commission's Public Advisor and the Energy Division Director an opportunity to comment on the specifics of the notice and web page. Respondents shall modify the notice and web page to the extent directed by the Public Advisor and/or Energy Division Director.
5. Avista Utilities and New West Energy are dismissed as respondents in this proceeding.
6. Rulemaking 06-05-027 remains open.
This order is effective today.
Dated July 26, 2007, at San Francisco, California.
MICHAEL R. PEEVEY
President
DIAN M. GRUENEICH
JOHN A. BOHN
RACHELLE B. CHONG
TIMOTHY ALAN SIMON
Commissioners
ATTACHMENT A
SUMMARY OF MAJOR CHANGES TO
PROPOSED TARIFFS AND STANDARD CONTRACTS
The Commission approves each respondent's proposed tariff and standard contract subject to the specific clarifications, modifications and amendments stated in the order. These items are summarized, but not necessarily limited to, the following. Any conflicts with the order itself are resolved in favor of the order, findings of fact, conclusions of law and ordering paragraphs.
1. Allocated Capacity Share: Each respondent's allocated share of capacity will be stated in its tariff to a level of accuracy of one kilowatt.
2. Rates: The rate is the market price as determined by the Commission.
a. Each respondent will include the applicable rate in (i) its tariff (Sierra and PacifiCorp) or (ii) the standard contract portion of its combined tariff/standard contract.
b. Respondents will use the uniform statewide MPR unless and until a different result is reached for SMJUs in R.06-02-012.
c. The rate will not be reduced for administrative or other fees.
3. Actual Commercial Operation: The tariff/standard contract will specify that the applicable MPR table is the one in effect on the date the contract is signed, and the applicable MPR rate within the table is based on the date of actual commercial operation.
4. TOU or Annual Average MPR: SCE, PG&E, SDG&E and PacifiCorp will use time of use (TOU) factors in tariffs/standards contracts for calculating compensation; Sierra, BVES and MU may use an annual average rate.
5. MW Capacity:
a. SCE, PG&E and SDG&E will offer their tariff/standard contract to projects with an effective capacity of not more than 1.5 MW.
b. PacifiCorp, Sierra, BVES and MU may offer their tariff/standard contract to projects with an effective capacity of not more than 1.0 MW.
6. SGIP and Net Metering: Participants may not simultaneously obtain benefits from both the § 399.20 tariffs/standard contracts and the SGIP, the net metering programs, California Solar Initiative, or other similar programs.
7. Standard Terms and Conditions:
a. Green Attributes: The Commission's exact language shall be used, as stated in D.07-02-011 and corrected in D.07-05-057.
b. Eligibility: The language of PG&E and other utilities is adopted on the basis that it is materially the same as the Commission's STC; the proposal of SCE and SDG&E is adopted for their Appendix C, but they must bring Appendix D into conformance with the Commission's requirement that the output qualifies under the California RPS Program.
c. Assignment: Proposed language is adopted on the basis that it is materially the same (or more restrictive) than the Commission's STC; Sierra need not have this term since its service is provided by tariff.
d. Applicable Law: The proposed language of PG&E, SCE, SDG&E, PacifiCorp and BVES is adopted for the first sentence; the proposed language of PG&E is adopted for the second sentence, and will also be used by SCE, SDG&E, PacifiCorp and BVES; the proposal of Sierra that there be no similar first sentence is adopted, but Sierra must include the second sentence as proposed by PG&E.
e. Confidentiality: All proposals are adopted; in addition, all utilities shall include the term proposed by SCE, SDG&E and BVES regarding release of certain information to CEC and the Commission.
f. Contract Term: The proposals are each adopted, and respondents are encouraged (not required) to be open to opportunities for other contract durations.
g. Non-Performance: The proposals are adopted; in addition, each respondent shall include the term proposed by PG&E that buyer is entitled (not required) to terminate the agreement if seller has not sold or delivered energy to buyer for a period of 12 consecutive months.
h. Contract Modification: Proposals are adopted.
8. Full Buy/Sell or Excess Sales: SCE, PG&E and SDG&E shall offer the customer the choice of either full buy/sell or excess sales, to be selected by the customer. Other utilities shall offer full buy/sell, and may offer an excess sales option to be selected by the customer.
9. Initial Operation: Each respondent's tariff/standard contract will grant buyer the right to terminate the service if seller has not achieved commercial operation in 18 months from execution date. The seller shall be given reasonable notice and opportunity to address concerns before termination is effective.
10. Interconnection: Respondents shall follow their FERC-approved SGIP, or Commission-approved Rule 21, as appropriate and applicable for each particular situation regarding an interconnection agreement; in all cases, respondents shall respond to an interconnection request on a timely basis and without unreasonable delay; PacifiCorp, Sierra and MU will employ similar principles of timely review and disposition of interconnection requests as in Rule 21 of other utilities.
11. Expanded Availability: SCE and PG&E shall file advice letters with tariffs/standard contracts for the purchase of electricity generated by renewable resources from customers other than water and wastewater, using the same basic terms and conditions as adopted for water/wastewater customers.
(END OF ATTACHMENT A)
