XIII. Public Interest and Benefit to Consumers

As we have discussed herein, Edison has established that it has a need for additional capacity. We agree that it is uncertain as to when Edison will need that entire 1,054 MW of capacity from Mountainview before approximately 2010. However, the project is available now, and we are asked to make a decision on the transaction now. We do not have the option of waiting until 2008 to authorize the construction of the facility so it can come on line in 2010.

Edison has established an immediate need for dispatchable peaking and intermediate capacity to mitigate forecasted near-term capacity shortfalls and ensure electric system reliability. What is not clear is how much of Mountainview's capacity Edison will need between 2006 and 2010. Edison has excess energy now, but many contracts with DWR and QFs will expire before 2010. This, along with Edison's projected load growth makes Mountainview an attractive option to fill Edison's resource needs for baseload capacity by 2010.

In addition, the record demonstrates that Mountainview is highly cost-effective. If the transaction is consummated before the expiration of the option agreement, February 29, 2004, the discounted purchase price of Mountainview makes it an appealing project. As has already been mentioned, Mountainview has a state-of-the-art low heat rate of 7,100 Btu/kWh, which is expected to make the facility a low cost and more environmentally beneficial option for the entire 30-year term of the PPA. When these factors are considered along with Mountainview's location in Edison's load center, the facility is an attractive, efficient, low-cost resource to meet Edison's projected needs. We make this determination without prejudicing Edison's choice to use other resources in its procurement portfolio to meet the full needs of its customers.